While this seems true and I hope these companies get a large fine and some regulatory action takes place to wipe out these third party apps, I'm kind of surprised at the corporate learned helplessness here.<p>Back in the day McDonald's or one of their fast food competitors would have built their own frozen potato pipeline, made a massive marketing gimmick about cheapest fries and shattered this cartel quickly. It sounds like the companies are taking a high margin and the farmers would love to sell to anyone else. But it feels like the current managers at these fast food companies have gotten so used to outsourcing every part of production they lack the knowledge/remit to even try to set up a competing supply line.<p>It feels like only it's only efficient to focus core competencies if the people in charge of those stay smaller. Given how big companies can squeeze suppliers I see how they would end up consolidated. But if everyone is doing one thing and consolidating horizontally to negotiate better it becomes kind of red queen race.<p>Maybe when you have a multi-billion dollar supply chain and complex contract structure you can't just learn to do something new to solve a problem anymore.<p>The small players can't do much. As mentioned in the article, either potatoes and DIYing are cheaper or they aren't, but medium to large firms presumably could/should do something.
It's been a bad time for Lamb Weston. The stock is down over 41% since a year ago. I know this because it's been part of the most unsuccessful algorithmic trading strategy I've ever run. That company has a CEO who's been using the private jet to party all over the place; had to throw out [edit: $120M] of raw potatoes they overbought; and sent $80M of flawed french fries to a major customer (probably McDonald's) which they had to eat back in the last year. I think something fairly major is going to happen soon to change that company's leadership.<p>Cartels may work for luxury items like diamonds and cocaine, but they're inefficient. A lot more people notice flaws in their fries than in their diamonds and blow.<p><a href="https://www.businesswire.com/news/home/20241216832356/en/JANA-Partners-Sends-Letter-Board-Directors-Lamb" rel="nofollow">https://www.businesswire.com/news/home/20241216832356/en/JAN...</a>
I really don't like how they repeatedly try to merge the numbers of Lamb Weston with McCain here. Especially as McCain is a private family-run business, and Lamb Weston is a publicly traded company. They are not remotely the same entity.<p>"Lamb Weston and McCain alone control 70 percent of the market" hides that McCain holds about 30% of the US market.<p>McCain treat Simplot as their main rival in most jurisdictions, and have been involved in multiple legal fights with them - one of which is a patent issue that started in 2002 (no. 6,821,540), and is still ongoing. (Currently favouring Simplot).<p>There's a lot here that feels like... Bad statistics. Not to say that there's no truth in the accusations - but they don't seem to be acting in good faith, and that will wreck them when it comes to the court.
I think the most interesting part of this article is that this "collusion" is enabled via 3rd party data provider. This is a massive issue, that enables this sort of "uncoordinated" price fixing exercises, via 3rd parties, similar to what happening on the rental market in the U.S.<p>I'm very surprised that there is not more work in Econ literature studying this. This is essentially breaking the efficient market hypothesis at scale, and is generalizable to every industry.
I have zero difficulty believing this based on my experiences with frozen hash browns for home in the past few years. What I used to get for ~$2.50-3 a bag (occasionally on sale down to $1.67) is now routinely $4 or higher.<p>When I looked a couple years ago it seemed like there was some news about a year or two of crop issues, but plain potato prices haven't seen the same level of sustained rise in my experience (occasional purchaser, and haven't <i>quite</i> made the jump to just shredding my own).<p>Contrary to another comment, I'm not convinced that eggs are quite as bad - prices have gone up a lot, but they're much more cyclical and still regularly down where they've traditionally been. I'd absolutely believe that most of the price variation there has been due to flock destruction due to avian flu.
> Lamb Weston and McCain alone control 70 percent of the market; J. R. Simplot controls another 20 percent, and Cavendish Farms accounts for 7 percent, according to court documents<p>Ok, Cavendish is the 4th player, but the article couldn’t even mention their owners: <a href="https://en.m.wikipedia.org/wiki/Irving_family_(New_Brunswick)" rel="nofollow">https://en.m.wikipedia.org/wiki/Irving_family_(New_Brunswick...</a><p>Even the Wikipedia article doesn’t do them justice, but they basically own a province in Canada.
Like the article says, this is happening throughout the food industry. Eggs are a notable example, if you haven't noticed. In December 2023, a jury ordered the largest egg companies to pay $17.7 million in damages, which could triple to approximately $53 million. They've used various methods to limit egg production and it seems the issue is still ongoing...
I'm not completely sure the author is making the case they intend... growing up, my uncle spent decades in the fry business - if you ate a french fry in a QSR anywhere west of the Mississippi anywhere from the mid-1980s through the early 2000s, there's a strong likelihood he was responsible for growing the potatoes. There was far more technology, competition, and corporate espionage than one might expect for such a seemingly dull product. And, historically there was market segmentation too - QSR vs consumer, fries vs hash browns vs tots, things like sweet potato fries were an altogether different deal. Has there been consolidation in agriculture? Of course - but that's been going on for decades, and there's a reason one of the biggest players is named Con[solidated]Agra[culture]. Industry (QSRs, for example) expect consistency and timeliness, where the companies that could grow and consolidate the fastest beat out the regional players - decades ago. So while the author makes many factual observations, it's not clear why this article is timely for today rather than a couple decades ago when the war was actually being fought.
On the trivial point of view, I've never get why don't people just buy cheap potatoes, peals them, slice them, and finally fry them. If you're not clever enough to do that be not surprised to be abused by a cartel.
This is the Store of Value model. All centralized data platforms (like PotatoTrac mentioned here) enable it.<p>In an ideal world they should enable Flow of Value models.<p>If you are building data platforms, think about features that enable Flow. eg ONDC
It is impossible for me to take this seriously as a social justice issue, but I do want to point out that according to this article, Lamb Weston (the main character in this Jacobin piece) makes some of the best <i>possible</i> fries, and that even high-end places just order them ("you can't make them better yourself"). Which makes some sense, given Dave Arnold and Kenji Lopez-Alt's investigations into optimal fries (the best fries are frozen).<p>Also: you can buy them yourself. You just fry them straight from frozen. I haven't tried; I don't need to know for sure that I can make perfect fries in my house with zero effort.<p><a href="https://www.foodandwine.com/chefs-favorite-frozen-french-fries-6827034" rel="nofollow">https://www.foodandwine.com/chefs-favorite-frozen-french-fri...</a>
Not the most important takeaway from the article but I’m personally a bit surprised that frozen potatoes are distributed by just 4 companies. Given the vast difference in French fries taste and quality across establishments I would’ve guessed that there were dozens of various vendors
I air-fry frozen Ore-Ida fries a lot. All of them have added sugar EXCEPT for curly fries (for some unknown reason). So I only buy curly fries because they have 18.5% fewer calories.
The article suggests the Trump government will continue with regulation and lawsuits for price fixing. Hasn't Trump promised deregulation? Why then would they think the current trajectory of regulation would continue? Won't they just pay Trump to allow the price-fixing, and maybe get some more advertising for fries in the oval office?