Potato growers, groups maintain innocence in antitrust cases - The Packer

Potato growers, groups maintain innocence in antitrust cases

04/25/2013 01:45:00 PM
Coral Beach

For additional details on the lawsuit filed by Associated Wholesale Grocers, please see "UPDATED: AWG files antitrust case against potato groups"

Associated Wholesale Grocers recently joined the antitrust price-fixing fray in federal court that pits potato purchasers against potato companies and cooperatives.

In a lawsuit filed in mid-April in federal court in Kansas, Associated Wholesale Grocers, Kansas City, Kan., claims the United Potato Growers of America, United Potato state groups and many potato grower-shippers, have been illegally setting potato prices since 2004.

The AWG suit claims the potato groups are not protected by the Capper-Volstead Act of 1922, which allows agricultural producers to form cooperatives to stabilize markets and prices.

“Defendants suggested that they should ‘study’ the OPEC model and their organization was referred to as the ‘OPEC of Potatoes,’ ” the AWG complaint states.

“As a direct and proximate result of defendants’ conduct, plaintiff directly purchased potatoes at prices higher than it would have paid and on terms that are less favorable than would have been available in a competitive market,” according to the AWG lawsuit.

Almost identical claims were made in federal cases against the potato groups and companies in 2010. Those plaintiffs and AWG don’t state specific dollar amounts. They merely state that they want triple the amount that they allegedly overpaid.

AWG supplies more than 2,000 retailers, according to the complaint, which contends the defendants violated the federal Sherman Act (antitrust) and the Kansas Restraint of Trade Act.

Officers from United Potato Growers of America, Salt Lake City, maintain the group was set up within the law and operates legally.

“We have always acted openly and within the bounds of the law. We are confident in our legal position and look forward to a favorable outcome in court,” said Jerry Wright, president and chief executive officer of UPGA.

Judge partially denied Capper-Volstead defense

Capper-Volstead provisions are key to the 2010 cases. Those cases, filed in California, Wisconsin and Idaho, are now consolidated. The potato defendants requested antitrust claims in the cases be dismissed because they contend their activities are protected under Capper-Volstead.


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