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Dean Foods Company Must Sell Milk Processing Plant to Preserve Competition in Wisconsin
Madison — Attorney General J.B. Van Hollen announced today that Dean Foods Company (“Dean Foods”) will sell its Waukesha Golden Guernsey milk processing plant to OpenGate Capital. The sale results after Judge J.P. Stadtmueller of the United States District Court for the Eastern District of Wisconsin issued a final judgment ordering sale of the plant in the federal antitrust case brought against Dean Foods by the State of Wisconsin, the U.S. Department of Justice and the States of Illinois and Michigan. The federal antitrust case and the March 2011 judgment resulted from a challenge to Dean Foods' 2009 acquisition of the Waukesha plant and other milk processing plants from Foremost Farms USA. The lawsuit alleged that Dean Foods' ownership of the plant presented serious antitrust concerns and could adversely affect the price of milk for retailers, school districts and other purchasers throughout Wisconsin.
“I am committed to protecting consumers by ensuring vigorous competition among milk processors,” Van Hollen said. “I am pleased that this sale will preserve milk processing competition in southeastern Wisconsin by introducing a new competitor capable of serving grocery stores, convenience stores, schools, and other milk retailers throughout Wisconsin.”
Dean Foods Company, based in Dallas, Texas, is the largest U.S. processor and distributor of milk and other dairy products. The complaint alleged that after the acquisition of the Waukesha plant and other assets, Dean Foods had a large portion of the fluid-milk sales in Wisconsin, Illinois and Upper Michigan. According to the complaint, Dean Foods' acquisition deprived retailers and school districts of the benefits of substantial head-to-head competition between Dean Foods and Foremost Farms.
Foremost Farms is a member-owned business association headquartered in Baraboo, Wisconsin, whose members are dairy farmers. In 2008, its Consumer Products Division had net sales of $233.7 million. Before Dean Foods' acquisition of Foremost's Consumer Products Division, Foremost processed its members' raw milk at its plants in De Pere and Waukesha, Wisconsin.
Milk processors such as Dean Foods and Foremost Farms purchase raw milk from dairy farms and agricultural cooperatives to pasteurize and package. The processors then distribute and sell the milk to school districts, supermarkets, grocery stores, and other retail customers.
OpenGate Capital is headquartered in Los Angeles, California. Their holdings include, amongst others, Gabriel Ride Control Products, which designs and manufactures shock absorbers, and Fusion Paperboard, a manufacturer, converter and marketer of boxboard and folded cartons. As the new owner of the Waukesha plant, OpenGate Capital will acquire all of the Waukesha plant assets, including the right to market its products under the Golden Guernsey and La Vaca Bonita brands.
The final judgment also requires Dean Foods to notify the U.S. Department of Justice and the Wisconsin Attorney General 30 days before Dean Foods acquires any milk processing plant in Wisconsin or within 150 miles of its borders that is valued at more than $3 million.
Assistant Attorneys General Gwendolyn Cooley and Steven Means represent the State of Wisconsin in this matter.