Regional dairy cooperative joins suit against DFA
RESTON, Va. — The Maryland and Virginia Milk Producers Cooperative Association joined Food Lion last week in a lawsuit against the nation’s top dairy producer, calling it an “aspiring monopolist.”
The suit challenges Dairy Farmers of America’s $433 million purchase this month of more than 40 processing plants from Dean Foods Co., a sale that made DFA the largest milk producer and processor nationwide, the suit said.
“DFA’s ownership of the majority of the legacy Dean milk processing plants represents the coup de grâce for competition in the relevant fluid milk markets,” it said. “With capability to wield market power at two levels of the supply chain, DFA now has both the ability and the incentive to wipe out any remaining pockets of competition.”
The Maryland and Virginia association joined the suit due to the threat DFA’s new acquisitions pose in the Carolinas where the association is DFA’s primary competitor in raw milk supply. Food Lion is also one of the region’s largest milk retailers. The lawsuit was filed May 19 in the U.S. District Court for the Middle District of North Carolina.
The association and the supermarket are demanding that DFA sell at least one of the three milk processing facilities it purchased in the region. DFA acquired plants in High Point and Winston-Salem, N.C., and Spartanburg, S.C., in Dean’s bankruptcy sale, which federal regulators approved last month. DFA and Dean worked in concert, the suit said, when Dean merged with a different processing company years ago.
“Together these two dairy conglomerates have suppressed competition, raised market concentration and bolstered each other’s market power ever since to the detriment of independent dairy farmers at one end of the milk supply chain and customers at the other,” the suit said.
The Maryland and Virginia Milk Producers Cooperative Association, headquartered in Reston, Va., serves about 950 member farms in 11 states across the Southeast. It operates two milk processing facilities outside the Carolinas and two additional facilities that produce dairy ingredients for outside food brands.
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P.O. Box 2026 Easton, MD 21601-8925