The US Department of Justice has proposed Dairy Farmers of America (DFA) sell some fluid milk processing facilities in Illinois, Massachusetts and Wisconsin that it acquired following Dean Foods’ bankruptcy auction in order to settle a civil antitrust lawsuit brought by the DOJ and the attorneys general of Massachusetts and Wisconsin in opposition to the merger.
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Photo: ©ANDREI - STOCK.ADOBE.COM

Acceptance of the proposal would settle the lawsuit if the bankruptcy court approves, according to the DOJ.

The milk processing plants in question are in Harvard, Ill., Franklin, Mass., and Pere, Wis.

It was announced April 1 that DFA, Kansas City, was the winning bidder to acquire most of Dallas-based Dean Foods’ assets as part of the milk processor’s Chapter 11 auction process. The announcement prompted several states and municipalities to raise antitrust concerns about the merger.

“This is a tumultuous time for the dairy industry, with the two largest fluid milk processors, Dean and Borden Dairy Co., in bankruptcy, and a pandemic causing demand for milk by schools and restaurants to collapse,” said Makan Delrahim, assistant attorney general of the antitrust division. “In the face of these challenges and Dean’s worsening financial condition, the department conducted a fast but comprehensive investigation, and our actions today preserve competition for fluid milk processing in northeastern Illinois, Wisconsin, and in New England,”

During its investigation, the DOJ also expressed concerns to DFA and Dean about the potential loss of competition in the Upper Midwest due to the merger. DFA subsequently ceased its efforts to acquire those plants, according to the DOJ.

The DOJ also was looking into the acquisition of eight Dean Foods processing plants by Prairie Farms Dairy, Carlinville, Ill. The DOJ closed its investigation after concluding the plants at issue would likely shut down if not purchased by Prairie Farms because of Dean’s distressed financial condition and the lack of alternate operators who could buy the plants.

Dairy farmers can do more together than individually.

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