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Published March 29, 2011, 03:50 PM

Dean Foods to sell milk plant under antitrust deal

MILWAUKEE — The nation's largest dairy company has agreed to sell a Wisconsin milk processing plant to settle an antitrust lawsuit filed by the Justice Department and three states.

By: Carrie Antlfinger, Associated Press

MILWAUKEE — The nation's largest dairy company has agreed to sell a Wisconsin milk processing plant to settle an antitrust lawsuit filed by the Justice Department and three states.

The lawsuit filed last year objected to Dean Foods Co.'s 2009 purchase of two plants in Waukesha and De Pere from Foremost Farms USA. The purchase gave Dean Foods control over nearly 60 percent of milk sales in Illinois, upper Michigan and Wisconsin and raised concerns the company would quash competition and drive up milk prices. The attorneys general in those states joined the federal lawsuit.

The proposed settlement filed in federal court Tuesday calls for Dallas-based Dean Foods to sell the plant in Waukesha but doesn't affect its ownership of the one in De Pere.

The lawsuit portrayed Dean Foods’ purchase of the Waukesha plant as a strategic move to eliminate a strong competitor and said it left many school districts with only one milk supplier. The company's sale of the plant will remedy that, and it will have to notify the Justice Department and Wisconsin attorney general's office before it buys another plant worth $3 million or more, Wisconsin Attorney General J.B. Van Hollen said in a statement.

“Selling the Waukesha plant will introduce another competitor capable of serving grocery stores, convenience stores, schools, and other milk retailers throughout Wisconsin,” Van Hollen said.

In an e-mail, Dean Foods spokeswoman, Marguerite Copel, said reaching an agreement on the lawsuit allows the company to move forward.

“We continue to believe that our acquisition of the Foremost Farms assets in Wisconsin supported competition and benefited consumers,” she wrote. “However, because ongoing litigation is expensive, distracting and brings uncertainty to our business, we believe that this resolution is in the best interest of our employees, shareholders, customers and consumers.”

A federal judge has to approve the settlement.

Dean Foods has acquired more than 100 smaller companies since 1996, the lawsuit said. Its April 2009 purchase of Foremost Farms’ plants was small enough that it did not have to seek prior approval from the Justice Department.

Under the proposed settlement, however, Dean Foods will have notify the state and federal governments before it buys any milk processing plant in Wisconsin or within 150 miles that's worth more than $3 million.

The 2009 deal involved Dean Foods buying the Consumer Products Division of Baraboo-based Foremost Farms. In 2008, that division had net sales of $233.7 million.

Dean Foods will have 90 days to sell the Waukesha plant, according to Van Hollen's office. If it doesn't meet that deadline, the court will appoint a trustee to sell the plant.

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