AG Investigating Dairy Anti-Trust Settlement

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(Host) The Vermont attorney general’s office is evaluating the fairness of a proposed anti-trust settlement between Northeast dairy farmers and the nation’s largest milk producer.

Lawyers for the state have asked the federal court to open up records in the case so lawmakers and the public can learn more about the complex litigation.

VPR’s John Dillon reports:

(Dillon) Ryan Kriger is an assistant attorney general who’s following the anti-trust case now pending in U.S. District Court in Burlington.

Dallas-based Dean Foods has agreed to pay a group of Northeast farmers $30 million dollars to settle claims that it illegally manipulated the milk market with the help of a large dairy co-op.

Kriger told the House Agriculture Committee that the attorney general’s office is remaining neutral in the litigation. But he said the goal is to make sure Vermont farmers get the best deal possible.

On its face, Kriger said, the payout seems substantial.

(Kriger) "The fact is – no matter how we look at it — $30 million dollars is not a coupon settlement; it’s not nothing."

(Dillon) Yet Kriger said it’s hard to determine whether the $30 million is actually adequate. That’s because Dean agreed to pay the money before the case went to trial.

(Kriger) "Dean settled out of the case before their first deposition was taken. And the court pointed that out: How can you say $30 million is good or bad?"

(Dillon) The court has not determined how many farmers qualify for the settlement money, or how it will be distributed. But with about 13,000 farmers in the region, industry estimates say that – once attorneys fees are taken out – each farmer would get about $1,500 under the settlement.

Pawlet Democrat John Malcolm – a former dairy farmer – questioned whether the settlement will actually benefit farmers.

(Malcolm) "I also see it as a get out of jail free card for Dean Foods, which in the future to me is not beneficial at all for dairy farmers. I also see that this could potentially weaken co-ops that were not in cahoots with Dean Foods."

(Dillon) Although Dean has settled its part of the case, the anti-trust allegations remain against the co-op Dairy Farmers of America and its marketing arm. They’re fighting the Dean settlement in court.

Part of the settlement with Dean calls for the company to buy a portion of its milk supply from independent farmers not associated with DFA.

Ryan Kriger, the assistant attorney general, said the court is focused on whether that part of the settlement will benefit farmers in the region.

And he said the attorney general’s office  – while officially neutral – is also keeping its legal options open.

(Kriger) "If these things are true then obviously we’re really interested in figuring out what’s going on there. If our laws have been broken that’s something we want to know about and we’ll figure out where to go from there."

(Dillon) The House Agriculture Committee is tracking the case as well. Lawmakers say they hope to use financial information revealed in the lawsuit to press for reforms of the milk pricing system.

For VPR News, I’m John Dillon in Montpelier.

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