The U.S. Department of Justice and three states have filed an antitrust lawsuit against Dean Foods, challenging its 2009 acquisition of two milk processing plants in Wisconsin. Dairy Profit Weekly editor Dave Natzke reported in Friday’s DairyLine that the Justice Department has been joined by attorneys general in Wisconsin, Illinois, and Michigan in filing the lawsuit against Deans, the largest fluid milk bottler in the United States.
The suit challenges Dean’s 2009 purchase of two fluid milk plants from Foremost Farms, a Wisconsin-based dairy cooperative.
The complaint, filed in federal court in the Eastern District of Wisconsin, alleges the transaction will lessen competition in the region’s fluid and school milk markets. Court documents say the addition of the two plants has given Deans a 57 percent share of the fluid milk market in the region.
The suit requests Dean’s divest assets and interests it acquired when purchasing plants in Waukesha and DePere, Wisconsin. It also asked that Deans be required to give a 30-day notice when making future acquisitions.
Foremost Farms is not named in the suit, Natzke said, and has declined comment, saying it followed all laws and regulations related to the sale. Foremost with 2,300 dairy farmer members in seven states, continues to provide milk to Dean Foods through a supply contract, according to Natzke.
Deans said it will defend itself vigorously against the complaint, saying the transaction benefited Wisconsin dairy farmers by providing a stable and growing outlet for their milk, and produced cost savings for its milk customers.
The lawsuit is an outgrowth of antitrust policy changes since the Obama Administration took office. The Department of Justice and USDA have scheduled several public “workshops” beginning this spring to explore competition and regulatory issues in the agriculture industry and kick off with a general workshop in Iowa, in March, followed by a dairy industry workshop, set for June, in Wisconsin. The workshops will analyze agricultural markets nationally, and look at the discrepancies between the prices received by farmers and the prices paid by consumers, Natzke concluded