Justice Department Files Lawsuit Against Dean Foods
Published:22-January-2010
By Staff Reporter
The Department of Justice has filed a civil antitrust lawsuit against Dean Foods disputing its April 2009 acquisition of Foremost Farms US consumer products division.
The department said that the merger eliminates substantial competition between the two companies in the sale of milk to schools, grocery stores, convenience stores and other retailers in Illinois, Michigan and Wisconsin.
The Department of Justice's Antitrust Division, along with state attorneys general from Illinois, Michigan and Wisconsin, filed a lawsuit in US District Court in Milwaukee, seeking to require Dean Foods to sell the dairy processing plants it acquired from Foremost Farms.
Dairy processors, such as Dean Foods and Foremost Farms, purchase raw milk from dairy farms and agricultural cooperatives to pasteurize and package the milk. The processors then distribute and sell the milk to school districts, supermarkets, grocery stores and other commercial customers.
The department's lawsuit not only seeks to undo the 2009 deal but also requires Dean Foods to notify the department at least 30 days prior to any future acquisition involving a milk processing operation.
Christine Varney, assistant attorney general in charge of the Department of Justice's Antitrust Division, said: "The purpose of the department's lawsuit is to restore competition so that schools, grocery stores and other retailers in Illinois, Michigan and Wisconsin, will pay lower prices for their milk.”
Dean Foods' acquisition of Foremost Farms' two dairy processing plants in De Pere and Waukesha, Wisconsin, eliminated a competitor against Dean Foods, the department said. Dean Foods now has approximately 57% of the market for processed milk in northeastern Illinois, the UP and Wisconsin.
The department's complaint alleges that the transaction reduced competition substantially in the sale of milk to school districts in the UP and Wisconsin. After Dean Foods' acquisition of Foremost Farms' consumer products division, these districts have been left with a monopoly provider.
The department also alleges that the acquisition reduced competition substantially in the sale of milk to supermarkets, grocery stores, and other commercial customers throughout northeastern Illinois, the UP and Wisconsin.
