Northeastern Dairy Farmers Bring Antitrust Litigation Against DFA and Dean Foods

A coalition of dairy farmers from the northeastern United States has reportedly filed a putative class action against the Dairy Farmers of America (DFA) and Dean Foods Co., alleging that they have monopolized the distribution of fluid milk in the Northeast, fixed prices and created an economic crisis in the industry. Allen v. DFA, No. ___ (D. Vt., filed October 8, 2009). Similar litigation is reportedly pending in
a federal court in Tennessee.

According to plaintiffs’ counsel, “Many dairy farmers have been forced to choose between joining DFA or DMS [Dairy Marketing Services] or going out of business. If they join, they have to pay a fee to continue to market to their own customers at prices fixed by DFA, DMS and other cooperatives. Meanwhile major milk processors Dean and HP Hood, which is part-owned by DFA, enjoy the economic benefits.” He also reportedly said that the anticompetitive milk distribution system is the result of unlawful contracts, agreements and understandings that violate restrictions imposed by the Department of Justice and state attorneys general offices.

DFA reportedly responded to the complaint by saying it would “aggressively defend” its interests against the allegations, “as we believe them to be without basis.” It also contends that its operations have achieved efficiencies in “field services, hauling and administration—all for the benefit of dairy farmers. We are continuously looking for additional ways to increase dairy farmer pay price and net returns, not suppress
them, and have been successful in doing so.” See The BLT: The Blog of Legal Times, October 9, 2009; U.S. Agricultural & Food Law and Policy Blog, October 12, 2009; Syracuse.com, October 14, 2009.