Monthly Archives: July 2011

Welcome to the Growing Competition Blog

The Agriculture and Food Committee is excited to announce the launch of its new blog, “Growing Competition.” Working with the ABA Antitrust Section leadership and the Section’s Technology Taskforce, the Agriculture and Food Committee has established this blog as a forum for discussion of important issues and recent developments in both the antitrust and consumer protection fields that affect the agriculture and food sectors. With the Department of Justice’s recent challenges to George’s/Tyson and Dean/Foremost and the FTC’s recent food labeling cases, there is a lot to talk about. Come join the discussion, and if you are not already a member, we invite you to join the Committee.

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Southeastern Dairy Farmers Harvest $140 million Antitrust Settlement

On July 12, 2011, counsel for a plaintiff class of approximately 7,200 current and former dairy farmers announced a settlement with defendant Dean Foods Co. in In re Southeastern Milk Antitrust Litigation, No. 2:08-MD-1000.  According to a report by Law360, the settlement, which is subject to court approval, will require Dean Foods to pay a total of $140 million over four years to the class.  Dean Foods issued a release confirming the settlement.  Trial of the plaintiff class’s claims against Dairy Farmers of America and the other non-settling defendants is scheduled to begin next month in Federal District Court for the Eastern District of Tennessee.  The dairy farmer plaintiffs allege a conspiracy to artificially lower the price paid to dairy farmers in the southeast U.S. for fluid Grade A milk in violation of Sherman Act section 1; and monopolization, attempted monopolization and monopsonization, and conspiracy to monopolize and monopsonize in violation of Sherman Act section 2. 

 

6/25/11 – DOJ announces settlement of U.S. v. George’s, Inc.

On June 23, 2011, the U.S. Department of Justice announced a settlement of its Clayton Act § 7 post-acquisition divestiture case filed in May 2011, challenging the $3 million acquisition of Tyson Foods’ Harrisonburg, VA chicken processing plant by Tyson competitor George’s, Inc.  The DOJ’s complaint alleged that the acquisition thwarted competition among processors for purchases from chicken growers in the Shenandoah Valley.  The proposed settlement does not require divestiture of the processing plant as requested in the DOJ’s complaint.  Instead, the settlement requires capital improvements by George’s to the Harrisonburg chicken processing plant.  The DOJ in its press release said these improvements will enhance George’s incentive and ability to increase local poultry production, leading to increased demand in the Shenandoah Valley for grower services.  This was the second agriculture-sector acquisition since January 2010 (the other being U.S. v. Dean Foods) where the DOJ sued to compel post-acquisition divestiture.

6/08/11 – Funding in doubt for GIPSA’s proposed rules.

 On May 31, 2011, the Appropriations Committee of the U.S. House of Representatives approved a Fiscal Year 2012 Agriculture Appropriations Bill that, if enacted into law, will effectively kill for now the extensive proposed regulations proposed by the USDA’s Grain Inspection, Packers and Stockyards Administration (“GIPSA”), in June 2010.  Among other things, the proposed GIPSA regulations disclaim injury or likely injury to competition as an element of a claim for violation of sections 202(a) or (b) of the Packers and Stockyards Act.  Section 721 of the referenced Appropriations Bill prohibits use of funds for the proposed GIPSA regulations.  The Committee Report on the Appropriations Bill describes reasons for the funding prohibitionat pages 2, 3 and 23.