Antitrust Issues Could Cause Heartburn For DFA, Again
When Dean Foods filed for bankruptcy, they immediately announced Dairy Farmers of America (DFA) was seriously interested in purchasing some of their assets. That same day, DFA confirmed their intent and evaluated the Dean Foods plants saying in a statement they wanted to “ensure a market for their farmers’ milk.”
Well, it might not be that simple. On Thursday, the New York Times ran an article outlining why DFA could face antitrust issues if they do acquire Dean Foods assets.
“The conflict of interest is going to result in harm, and the dairy farmer is going to have no good choices,” Peter Carstensen, a former antitrust lawyer with the Department of Justice who tracks the dairy industry told the New York Times.
Over the past decade DFA has continued to purchase plants to increase their processing capacity. Other cooperatives have done the same.
However, this is not the first time the cooperative has faced antitrust allegations, even settling a lawsuit in 2018 for $50 million. In that lawsuit, farmers claimed the cooperative had colluded with Dean Foods to lower milk prices.
Furthermore, the New York Times reports a small group of farmers filed a separate lawsuit against DFA in Vermont in which they accused the cooperative of a wide range of anticompetitive practices: making deals with other co-ops not to poach one another’s members, sharing milk-pricing information with those rivals to suppress payments to farmers, and signing restrictive supply contracts with processors like Dean Foods and Farmland that made it impossible for farmers outside the co-op to sell to those companies directly. That lawsuit is still pending trial.
Read the full story from the NY Times to learn more.