Associated Wholesale Grocers Settles Lawsuit Against Potato Farming Associations for 25 Million Dollars
BOISE, ID - The five-year-long lawsuit between the Associated Wholesale Grocers (AWG) and the United Potato Growers (UPG) has come to a close.
According to a report from the Southeast Missourian, AWG and UPG have come to a settlement agreement in the amount of $25 million, to which U.S. District Judge B. Lynn Winmill in Idaho gave his preliminary approval late last week.
As we’ve previously reported, AWG filed an antitrust lawsuit against UPG in 2010, claiming that the group acts as a potato "cartel," controlling 80 percent of the potato market. According to the Courthouse News Service, the lawsuit also claimed the group used both physical and non-physical intimidation to compel independent growers to join, as well as conspiring to raise prices by limiting production with methods like restricting the number of acres planted.
The Southeast Misourian reports that the defendants continue to deny the claims, stating that they focused on helping their members navigate the fluctuating potato market while running an effective cooperative, and settlement negotiations have continuously tried and failed throughout the years that the case has carried on. With the estimated value of potato sales for the year of 2012 being about $3.7 billion and pages of documents from the defendant's side alone adding to more than 3.5 million pages (105 of which AWG gained access to in March), the closing of the case is no small feat.
Under the agreed settlement, anyone who purchased fresh potatoes without intentions for resale in a 10-year timespan from stores in the following states will be eligible for part of a $5.5 million reprimand:
- Arizona
- California
- Florida
- Iowa
- Kansas
- Massachusetts
- Michigan
- Minnesota
- Nevada
- New York
- North Carolina
- Tennessee
- Vermont
- Wisconsin
Anyone in the U.S. who purchased potatoes from the growing groups directly, or their members and subsidiaries, will soon be eligible for part of a $19.5 million reprimand.
In addition, the growers groups are barred from restricting acreage or taking other actions to reduce potato crops grown by members for seven years.
