The US Department of Justice has filed a civil antitrust lawsuit against Dean Foods Company challenging its April 2009 acquisition of Foremost Farms USA’s Consumer Products Division. The department said 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 DOJ’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.
Dean Foods announced that it was contesting the DOJ action. The company believes its acquisition of the DePere and Waukesha WI fluid milk processing plants from Foremost is fully compliant with antitrust laws, and will defend itself vigorously against the complaint.
The company believes that, from the time of the acquisition almost a year ago, this transaction has benefited Wisconsin dairy farmers by providing a stable and growing outlet for their milk. It says the transaction already has produced cost savings that will benefit customers and spur competition in and around Wisconsin.
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 Foods’ acquisition of Foremost Farms’ two dairy processing plants in De Pere and Waukesha 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 about 57% of the market for processed milk in northeastern Illinois, the UP, and Wisconsin.
Foremost Farms is a Wisconsin member-owned business association headquartered in Baraboo WI, the members of which are dairy farmers. In 2008, its Consumer Products Division had net sales of $233.7 million. Before Dean Foods’ acquisition of its Consumer Products Division, Foremost Farms processed its members’ raw milk at its plants in DePere and Waukesha, as well as at other facilities.
