US: Dairy Farmers of America settles price fixing suit
By Katy Askew | 24 January 2013
Dairy Farmers of America (DFA) has settled a class action lawsuit accusing the cooperative of conspiring to control the raw milk market in the southeastern US.
DFA will pay US$140m to the plaintiffs. An additional, refundable $9.3m per year for two years will be placed in a fund to "incentivise stronger Class I utilization rates in Federal Orders 5 and 7", the cooperative said.
If the agreement receives court approval it will mean that DFA will avoid going to trial over the claims. Trial for the suit was scheduled for later this month.
This is the third settlement reached in the case, which saw Dean Foods previously reach an out of court settlement.
DFA emphasised that the deal is not "an admission of wrongdoing".
"Our Board and management team have worked diligently to put certain old issues behind us," said Rick Smith, president and chief executive officer. "This outcome positions DFA to fulfill a commitment to our members to resolve pending litigation, to remove a source of distraction for our leadership and to avoid additional legal fees."
Today, Dairy Farmers of America's Board of Directors and management announced the Cooperative has reached a settlement agreement in the class action lawsuit against DFA in the southeastern United States. Trial for the suit was scheduled to begin this month.
DFA makes no admission of wrongdoing in this settlement. Under the terms of the settlement, filed yesterday with the U.S. District Court for the Eastern District of Tennessee, DFA will pay $140 million to the plaintiff class. An additional, refundable $9.3 million per year for two years will be placed in a fund to incentivize stronger Class I utilization rates in Federal Orders 5 and 7.
Also included in the agreement are remedial elements regarding reporting, accounting and communication of certain business information and functions. Many of these components are consistent with new policies and procedures DFA management voluntarily developed and implemented previously to emphasize a culture of openness and transparency within the Cooperative.
"Our Board and management team have worked diligently to put certain old issues behind us," said Rick Smith, president and chief executive officer. "This outcome positions DFA to fulfill a commitment to our members to resolve pending litigation, to remove a source of distraction for our leadership and to avoid additional legal fees."
The payment of the settlement will not affect the Cooperative's day-to-day operations or its ability to market members' milk or pay them a competitive price for that milk. Member milk checks and the member equity program will not be impacted.
"The Cooperative remains healthy and poised for a bright future," Smith said. "We continue to develop new member programs and invest in plants and new products. We also continue to seek out new opportunities and innovative ways to increase value to our dairy farmer owners."
Original source: Dairy Farmers of America
Sectors: Dairy
Companies: Dairy Farmers of America, Dean Foods
View next/previous articles
Currently reading -
US: Dairy Farmers of America settles price fixing suit
24 Jan 2013 -
24 Jan 2013 -
Related research
Dairy Farmers of America, Inc. - SWOT, Strategy and Corporate Finance Report
Dairy Farmers of America, Inc. - SWOT, Strategy and Corporate Finance Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and service offerings, detailed fina...
Dairy Farmers of America, Inc.: Consumer Packaged Goods Company Profile & SWOT Report
"Dairy Farmers of America, Inc.: Consumer Packaged Goods Company Profile & SWOT Report" contains in depth information and data about the company and its operations. The profile contains a company overview, business description, SWOT analysis, key fac...
Dairy Farmers of America, Inc.: Consumer Packaged Goods - Company Profile & SWOT Report
Canadean's "Dairy Farmers of America, Inc.: Consumer Packaged Goods - Company Profile & SWOT Report" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major products and s...
Related articles
just-food's research round-up: the CIVETS markets, packaged food in the US
The latest batch of reports from the just-food research store includes emerging food and drinks markets, packaging for an ageing population and packaged food in the US.
On the money: WhiteWave looks to M&A, new categories for growth
WhiteWave Foods has said that M&A and expansion into new categories will form part of its long-term "plot for value creation".
US: Morningstar sale boosts Dean Foods profits
Dean Foods has booked a leap in first-quarter net earnings, boosted by proceeds from the sale of its Morningstar business.
There are currently no comments on this article
Be the first to comment on this article