WASHINGTON — The U.S. Department of Justice filed a civil antitrust lawsuit Jan. 22 against Dean Foods Company, challenging its April 2009 acquisition of Foremost Farms USA’s 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 the lawsuit in U.S. District Court in Milwaukee, seeking to require Dean Foods to sell the dairy processing plants it acquired from Foremost Farms.
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.
Dean will fight
Dean Foods said it will contest the suit. The company believes its acquisition of the DePere and Waukesha, Wis. fluid milk processing plants from Foremost is “fully compliant with antitrust laws, and will defend itself vigorously against the complaint,” a company news release stated.
Dean Foods’ acquisition of Foremost Farms’ two dairy processing plants in DePere and Waukesha, Wis., eliminated an aggressive competitor against Dean Foods, the department said.
Dean Foods and Foremost Farms were the first and fourth largest milk processors in northeastern Illinois, the Upper Peninsula of Michigan (the UP) and Wisconsin, respectively. Dean Foods now has approximately 57 percent of the market for processed milk in northeastern Illinois, the UP and Wisconsin.
Schools and consumers
The department’s complaint alleges 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, according to the justice department.
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.
Dean Foods’ Dairy Group is the country’s largest processor and distributor of milk and other dairy products. Foremost Farms is a Wisconsin member-owned business association headquartered in Baraboo, Wis., the members of which are dairy farmers.
Prior to Dean Foods’ acquisition of its Consumer Products Division, Foremost Farms processed its members’ raw milk at its plants in DePere and Waukesha, Wis., as well as at other facilities.
STAY INFORMED. SIGN UP!
Up-to-date agriculture news in your inbox!