Justice Department Looking Into Dairy Merger

Dairy Farmers of America has reached an agreement with Dean Foods to purchase the bulk of Dean’s operations for $425 million.  But that agreement will be contingent on approval from the Justice Department and a federal bankruptcy court.  Dean filed for bankruptcy back in November.  The company currently operates 57 facilities in 29 states, and under the agreement, Dairy Farmers of America would acquire 44 of those facilities.

However, not everyone is happy with the agreement.

“It would be awful,” said Peter Carstensen, a Law Professor at the University of Wisconsin. “This has the potential to hurt consumers because it would eliminate a lot of competition within the industry. At the same time, it will hurt dairy farmers.”  Carstensen specializes in antitrust in agriculture, and he added Dean and DFA are some of the only milk processors in the Upper Midwest and New England.

The Justice Department will need to review the merger and has been in contact with Dean Foods about potential transactions, including a tie-up with DFA.  Dean Foods said it believes the transaction would be “competitive and beneficial” for both farmers and consumers.

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