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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.

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U.S. Dept. of Justice vs. Dean Foods


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    1. 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

    2. 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

    3. 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 1st and 4th largest sellers of school milk and fluid milk in impacted areas 3

    4. 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