Dairy farmers in north-eastern US states have filed a class action lawsuit accusing Dairy Farmers of America (DFA) and Dean Foods of monopolising a level of distribution in the region.
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According to lead attorney Benjamin Brown, of Cohen Milstein, the suit accuses the dairy giants of forcing dairy farmers to join DFA or its marketing affiliate Dairy Marketing Services (DMS) in order to survive.
DMS and milk processor HP Hood also were named in the suit for aiding DFA’s and Dean’s monopolisation and, in the case of DMS, for price-fixing with DFA.
North-east dairy farmers blame DFA, the nation’s largest cooperative, and Dean, the nation’s largest processor, for lowering the price they receive for fluid milk by making DFA and its affiliates the exclusive suppliers of milk to Dean and Hood.
Together the two processors bottle about 90% of the fluid milk in the North-east.
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By GlobalData“Monopolisation and price-fixing have contributed to the milk-pricing crisis dairy farmers – especially small, family-owned dairies in the North-east – face today,” Brown insisted.
“Many dairy farmers have been forced to choose between joining DFA or DMS or going out of business. If they join, they have to pay to market to their own customers at prices fixed by DFA, DMS and other cooperatives. Meanwhile, major milk processors Dean and Hood, which is part-owned by DFA, enjoy the economic benefits.”
The DFA, DMS, Dean and Hood “domination” of the milk distribution system resulted from an “unlawful” series of “contracts, agreements and understandings”, Brown said.
The suit seeks damages and injunctive relief.
Officials at Dean Foods and DFA were unavailable for comment at time of press.
