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Northeast Dairy Producers File Suit Against DFA, Dean Foods
Two of the nation's largest dairy corporations used an illegal stranglehold over the fluid-milk market to artificially depress prices paid to Northeast dairy farmers, according to a class-action suit filed Thursday in U.S. District Court in Burlington.

Dairy Farmers of America, the country's largest dairy cooperative, and Dean Foods Company, the nation's biggest fluid-milk processor, have violated federal antitrust statutes in an attempt to exert monopoly power over the region's dairy farmers, according to the suit.

Benjamin Brown, a Washington, D.C. lawyer, filed the suit on behalf of two Northeast farmers, including Wells River dairy farmer Alice Allen. He said on Friday that the case could ultimately represent all of the region's dairy farmers.

"In a well-functioning market, farmers should have competition for where they can sell their milk," Brown said. "This case is about a conspiracy to monopolize and monopsonize, a case about the defendants' efforts to basically tie up those outlets."

Dean Foods, which controls roughly 70 percent of the fluid-milk buying market in New England, and Dairy Farmers of America, already are the subjects of numerous probes into alleged antitrust violations. The U.S. Department of Justice last month announced an investigation into the companies' dealings. And Dean and DFA are defendants in a separate class-action suit in the southeastern United States, where thousands of farmers say the companies engaged in price-fixing schemes to lower prices paid to dairy farmers.

"The Justice Department ... has expressed that they're concerned by what they've seen in the Northeast and that they're looking hard at the conduct we've highlighted in our complaint," Brown said.

The 67-page complaint alleges that, through a series of acquisitions, Dean and DFA acquired near monopoly power over the region's bottling plants and processing facilities, essentially funneling all the raw milk produced here into a single buying entity.

That power, the suit claims, allowed the companies to eliminate competition and name their own price.

Vermont Secretary of Agriculture Roger Allbee declined comment on the suit directly but said consolidation in the milk-buying market has long been a concern in the Vermont dairy industry. The Vermont Milk Commission, Allbee said, listed lack of competition in the regional buying market as among the critical issues facing local farmers.

"I think we've all had concerns," Allbee said Friday. "There are some major issues that need to be looked at."

The spate of complaints against Dean Foods and DFA comes in the wake of an industry-wide financial crisis that has forced many dairy farmers out of business and pushed others to the brink of ruin.

The price for conventional raw milk this summer hit lows unseen since the late 1970s, and prices are still well below the cost of production.