Presentation on theme: "U.S. Dept. of Justice vs. Dean Foods DOJ Accused Dean Foods of violating the Clayton Act Dean Foods: one of the leading U.S. food and beverage companies."— Presentation transcript:
U.S. Dept. of Justice vs. Dean Foods DOJ Accused Dean Foods of violating the Clayton Act Dean Foods: one of the leading U.S. food and beverage companies The largest processor and distributor of milk, and cultured dairy products. Offerings are marketed under more than 50 local and regional dairy brands as well as via private labels. History of the company: www.deanfoods.com/our-company/about-us/brief-history.aspx 1
U.S. Dept. of Justice vs. Dean Foods DOJ Accused Dean Foods of violating the Clayton Act Clayton Antitrust Act of 1914: Seeks to prevent anti-competitive practices Continued to outlaw practices considered harmful to consumers (monopolies, cartels, etc.) Specified particular prohibited conduct 2
U.S. Dept. of Justice vs. Dean Foods Dean Foods in 2009 acquires 2 fluid milk bottling plants located in Richland Center, WI from Foremost Farms (a dairy cooperative) DOJ contended that Deans acquisition of plants violates Section 7 as “the effect of such acquisition my be to substantially lessen competition Two markets impacted Sale of school milk in WI and the UP of MI Sale of milk in WI, the UP and NE IL Prior to purchase Dean and Foremost were the 1 st and 4 th largest sellers of school milk and fluid milk in impacted areas 3
U.S. Dept. of Justice vs. Dean Foods With purchase Dean will account for more than 57% of fluid milk sales in the region > 85% in UP > 60% in Green Bay 50% of school milk purchased in WI and UP With plant purchases the HHI to 1,127 to 3,830 Substantial ↑ in concentration HHI in UP ↑ by 2,814 to 7,510 HHI in Green Bay ↑ by 1,728 to 4,777 Dean Foods was found to be guilty and required to sell acquired plants Did so in 2011 4
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