Settlement Brings Good News To Dairy Farmers

12/10/10 5:50PM By Ross Sneyd
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AP Photo/J. Johnston

(Host) Vermont dairy farmers may have gotten an early holiday gift this week.

A tentative settlement has been reached in an anti-trust lawsuit between farmers across the Northeast and the dairy-processing company that controls most of the region's milk.

VPR's Ross Sneyd has our story.

(Sneyd) Dean Foods Company and a dairy cooperative that it's closely affiliated with control the vast majority of the milk produced and sold from Maine to Delaware.

Farmers and a number of political leaders say that control amounts to an illegal monopoly.

And so a group of Vermonters sued Dean and the co-op - Dairy Farmers of America - on behalf of themselves and their fellow farmers in the region.

Only the half of the lawsuit against Dean has been settled. Dairy Farmers of America hasn't yet agreed to a settlement.

Senator Patrick Leahy says the tentative settlement of that suit proves to him that Dean hasn't been playing by the rules.

(Leahy) "Well, it confirms what I suspected that there was price fixing. When I held the hearing in St. Albans last year it really felt that way from the testimony. And apparently there were others that felt the same way."

(Sneyd) No one can say for sure what is contained in the settlement.

A Dean Foods spokeswoman says the company won't talk about the case until the formal paperwork is filed in U.S. District Court in Burlington. That's not expected until some time next week.

But the company says in a filing with the Securities and Exchange Commission that it has agreed to a $30 million payment to settle the lawsuit.

Dean Foods says that, in addition to the payment, it has agreed to other terms and conditions about its purchase of raw milk for its processing plants in the Northeast.

A lawyer for some of the farmers who sued says he can't disclose details, either.

But Andrew Manitsky says he expects the settlement will be significant.

(Manitsky) "I think that this settlement represents important progress for dairy farmers in the Northeast. And so we're very pleased about it."

(Sneyd) The lawsuit charged that Dean Foods and Dairy Farmers of America were part of a conspiracy to fix prices.

The farmers said it led to a crisis in their industry because they aren't being paid what it costs them to produce the milk.

Senator Leahy says no one will know for sure how the crisis might be resolved.

(Leahy) "Farmers work hard enough. They can compete. But they can't compete if it's not a level playing field. They can't compete if somebody else - a multi-million-dollar conglomerate, is fixing the prices so they don't get a decent price."

(Sneyd) The U.S. Justice Department has also been investigating price-fixing in the dairy industry.

For VPR News, I'm Ross Sneyd.

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