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Grocers Claim Potato Growers Fix Prices

Ingram Publishing/Thinkstock(NEW YORK) -- Associated Wholesale Grocers, which according to its website represents 1,900 retail stores, claims that America's potato producers have conspired to fix spud prices in the $25 billion a year industry.

Their complaint, filed in Kansas' U.S. District Court, demands unspecified treble damages for what they claim are violations of the Sherman Act and the Kansas Restraint of Trade Act.

The grocers allege that potato growers in 12 states, controlling 80 percent of total U.S. potato acreage, have engaged in a conspiracy to fix prices -- using OPEC as their model.  That makes everyone's French fries, hash browns and mash more expensive, driving up the prices on many more potato-associated products.

"Defendants analogized their potato cartel to the Organization of Petroleum Exporting Countries ("OPEC") -- the notorious petroleum supply-reduction and price-fixing cartel composed of various foreign nations," the complaint reads.

A request by ABC News for comment from the grocers' attorneys got no response.

United Potato Growers of America (UPGA) give this statement to ABC News: "United Potato Grower's goal has been to help growers provide quality potatoes at reasonable prices to American consumers.  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."

The grocers allege that growers and shippers used both pre-harvest and post-harvest methods to control and reduce the supply of taters to raise and stabilize prices.  Their methods included a deliberate reduction of potato acreage, destruction of potato inventory, and a limitation of the number of potatoes available for sale, the result being a "dramatic increase in the prices of potatoes."

The suit recounts what it describes as the formation and operation, starting in 2003, of the defendants' "potato cartel."  First, it alleges, growers in Idaho formed a cooperative to fix prices; then, growers in other states did likewise in a coordinated campaign.

Copyright 2013 ABC News Radio

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