The nation?s largest dairy company agreed to an antitrust settlement with the six attorneys general of New England yesterday. In four years, Suiza has come to control over 70 percent of the region?s milk processing capacity, but yesterday?s deal attempts to restrain the dairy giant. NHPR?s Dan Gorenstein reports.
The nation?s largest dairy company agreed to an antitrust settlement with the six attorneys general of New England yesterday. In four years, Suiza has come to control over 70 percent of the region?s milk processing capacity, but yesterday?s deal attempts to restrain the dairy giant. NHPR?s Dan Gorenstein reports.
Suiza and the six New England states have been negotiating for close to a year. For New Hampshire attorney general, Phillip McLaughlin, the goal is very simple: maintain competition in the state?s dairy industry. McLaughlin says he hopes the deal will protect the 180 dairy farms in the state.
If there is only one company operating as the purchaser of the commercial milk, than Suiza has the capacity to drive down the price of the milk that is commercially produced and drive up price at retail level. That is the nature of either a monopoly or monopoly enterprise.
Industry insiders have been keeping an eye on Suiza for years as it bought up one processor after another. But the states?s legal interest was piqued when negotiations had all but completed a deal between Suiza and the Stop and Shop grocery chain. Had the deal gone down, Suiza would have required the grocery chain to sell only Suiza dairy products. Yesterday?s deal reverses some of the original deal. The company must also notify the regional attorneys general of any potential transactions. And then there?s the stipulation Connecticut Attorney General Richard Blumenthal is quite proud of.
one of the novel and important elements to this settlement is requiring Suiza to offer major amounts of product, 30 gallons of milk to it?s competitors for the next five years. That?s a very significant and innovative provision in any antitrust settlement.
But Suiza Corporation also calls yesterday?s settlement agreement a victory. Company Spokesperson Larry Raske says the settlement guarantees a competitive New England dairy market, and likes the end result.
Most importantly, what happened here today, is the core element between Suiza and Stop and Shop was preserved. Which will allow Suiza to be Stop and Shop?s primary supplier of milk for the next 15 years.
Suiza moved into the New England dairy market in 1997. Some of their local purchases include Garelick Farms, West Lynn Creamery and Nature?s Best. Recently, Suiza announced its intention to purchase Dean Foods, the nations second largest dairy processor. For NHPR News, I?m Dan Gorenstein
