Minnesota lawsuit alleges price fixing by ice companies
MINNEAPOLIS — A Wisconsin convenience store is claiming that three packaged ice producers created an international conspiracy to freeze in high prices and divide up the market so they wouldn’t have to compete with each other.
In a lawsuit in U.S. District Court in Minneapolis, Ridge Plaza Inc. of Milwaukee claims the packaged ice producers violated federal antitrust laws and harmed others by inflating the price of cubed, crushed, block and dry ice sold in the U.S. and Canada. The lawsuit seeks class action status.
The lawsuit was filed last week, days after one of the companies acknowledged the Antitrust Division of the U.S. Department of Justice searched its offices as part of a separate investigation.
Justice spokeswoman Gina Talamona said the Antitrust Division is "investigating the possibility of anticompetitive practices in the packaged ice industry," but she wouldn’t divulge details of the ongoing probe.
The defendants include Reddy Ice Holdings Inc., based in Dallas; West St. Paul, Minn.-based Arctic Glacier International Inc., and its corporate parents in Canada; and Home City Ice Co., a privately held company in Cincinnati, Ohio.
Ridge Plaza claims in the lawsuit that from Jan. 1, 2002, to the present, Ridge Plaza and other people or companies "purchased Packaged Ice at artificially maintained, noncompetitive prices established by the actions of the Defendants and their unnamed co-conspirators ..."
Ridge Plaza is seeking damages that have not yet been determined, as well as attorneys fees and other costs.
Spokespersons for all three companies did not comment on the lawsuit but acknowledged the investigation.
According to the lawsuit, the plaintiffs are the largest manufacturers of packaged ice in the U.S. and Canada. Sales of packaged ice are about $1.8 billion annually, split in half by third-party manufacturers and in-house ice machines. The three defendants make up about 70 percent of the manufacturer sales, the lawsuit says.
Among the allegations, Ridge Plaza claims the companies divided up the packaged ice market so they wouldn’t compete with each other. The lawsuit claims Reddy Ice sells its products in the sunbelt states from Florida to Arizona and in the northwestern U.S.; Arctic Glacier works in the central and northeastern states and California; and Home City dominates markets in the Midwest states of Illinois, Ohio and Indiana.
"There is virtually no overlap between the geographic markets in which each Defendant operates," the lawsuit claims. "Defendants agreed not to compete head to head in any of the markets in which one of them was dominant."
The scheme reduced or eliminated price competition throughout the U.S. or Canada, the lawsuit says.
While they wouldn’t talk of the lawsuit, all three ice packaging companies acknowledged they have been contacted in the Justice Department investigation.
Reddy Ice said on its Web site that officials with the Antitrust Division searched the company’s corporate office in Dallas on March 5. Reddy Ice said it would conduct an internal investigation.
In a telephone interview, Courtney Birck, a spokeswoman for Reddy Ice, said investigators took documents and information.
A news release on Arctic Glacier’s Web site said the company has been subpoenaed to provide information to the Department of Justice and it plans to cooperate. Spokesman Neil Winther said neither corporate office in Winnipeg, Canada nor in West St. Paul, Minn., had been searched.
In a statement e-mailed to The Associated Press , spokesman Joshua Hammond said Home City Ice was also approached by federal authorities. "We cannot discuss the specifics regarding this inquiry, as it is an ongoing legal matter. This industry-wide review will in no way affect our service to our customers," Hammond wrote.
All three companies said they are going on with business as usual.