Dean Foods has agreed to pay a US$140m settlement to farmers in the US who accused the dairy giant of conspiring with competitors to keep prices low.
A lawsuit had been filed by farmers in the south-east of the US against Dean Foods, dairy co-op Dairy Farmers of America (DFA) and others over claims they stopped competing to buy raw milk from farmers, which led to a fall in prices.
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The case had been scheduled for trial next month but Dean Foods said yesterday (12 July) that the settlement would allow it to focus on the “challenges” affecting the business.
“We continue to be confident that we have operated lawfully and fairly at all times in the south-east,” said chairman and CEO Gregg Engles. “We believe this settlement is in the best interest of our shareholders, employees, customers and consumers. Settling this case allows us to focus on the business challenges that we face, and to continue to take costs out of our operations while avoiding the expense, uncertainty and distraction of a protracted litigation and the likelihood of a lengthy appeals process.”
Dean Foods will pay the $140m into a fund over four to five years. The company will make an initial payment of $60m and make annual payments of $20m.
Robert Abrams, lead attorney for the plaintiffs, called the settlement a “very positive and successful resolution” for the 7,200 farmers in the south-east.
Abrams added: “This is a significant, gratifying and hard-fought victory for the dairy farmers of the southeast, but the lawsuit is far from over. The trial against DFA and the other defendants is scheduled to begin on 16 August in Greeneville, Tennessee.”
