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Dean Foods Must Sell Milk Processing Plant to Preserve Competition in Wisconsin
MADISON — Attorney General J.B. Van Hollen today joined the U.S. Department of Justice and the States of Illinois and Michigan in filing a proposed consent decree requiring that Dean Foods sell its milk processing plant in Waukesha, Wisconsin. The proposed settlement is the result of a federal lawsuit filed by the plaintiffs last year challenging Dean Foods Company’s 2009 acquisition of the plant from Foremost Farms USA. The lawsuit alleged Dean Foods’ ownership of the plant presented serious antitrust concerns and could adversely affect the price of milk for retailers throughout Wisconsin.
“We are committed to protecting consumers by ensuring vigorous competition among milk processors,” Van Hollen said. “Selling the Waukesha plant will introduce another competitor capable of serving grocery stores, convenience stores, schools, and other milk retailers throughout Wisconsin.”
Dean Foods, based in Dallas, Texas, is the largest U.S. processor and distributor of milk and other dairy products. The complaint alleged that after the acquisition of the Waukesha plant, Dean Foods had almost 60 percent of the fluid-milk sales in Wisconsin, Illinois and Upper Michigan. According to the complaint, Dean Foods’ acquisition deprived retailers and school districts of the benefits of substantial head-to-head competition between Dean Foods and Foremost Farms.
Foremost Farms is a member-owned business association headquartered in Baraboo, Wisconsin, whose members are dairy farmers. In 2008, its Consumer Products Division had net sales of $233.7 million. Before Dean Foods’ acquisition of Foremost’s Consumer Products Division, Foremost processed its members’ raw milk at its plants in De Pere and Waukesha, Wisconsin.
Milk processors such as Dean Foods and Foremost Farms purchase raw milk from dairy farms and agricultural cooperatives to pasteurize and package. The processors then distribute and sell the milk to school districts, supermarkets, grocery stores, and other retail customers.
Dean Foods will have 90 days to sell the Waukesha plant to a new owner. If Dean Foods fails in its efforts to sell the Waukesha plant, the court will appoint a trustee, who will be empowered to sell the plant. The new owner of the Waukesha plant will have access to all of the Waukesha plant assets, including the right to continue the Golden Guernsey and La Vaca Bonita brands.
The consent decree also requires Dean Foods to notify the U.S. Department of Justice and the Wisconsin Attorney General 30 days before Dean Foods acquires any milk processing plant in Wisconsin or within 150 miles of its borders that is valued at more than $3 million.
Assistant Attorney General Gwendolyn Cooley represents the State of Wisconsin in this matter.