Federal Register / Vol. 76, No. 65 / Tuesday, April 5, 2011 / Notices 18783 

1 ‘‘Northeastern Illinois’’ is defined as the 

following counties in the State of Illinois: Cook 

County, DeKalb County, DuPage County, Grundy 

County, Kane County, Kendall County, Lake 

County, McHenry County, and Will County. 

mailed to P.O. Box 7611, U.S. 

Department of Justice, Washington, DC 

20044–7611, and should refer to United 

States v. Exxon Mobil Corporation, et 

al., DOJ Reference No. 90–11–3–09228. 

The Consent Decree may be examined 

at the U.S. EPA Region 6, 1445 Ross 

Avenue, Suite 1200, Dallas, Texas 

75202. During the public comment 

period, the Consent Decree may also be 

examined on the following Department 

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Decrees.html. A copy of the Consent 

Decree may also be obtained by mail 

from the Consent Decree Library, P.O. 

Box 7611, U.S. Department of Justice, 

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faxing or e-mailing a request to Tonia 

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Thomas A. Mariani, Jr., 

Assistant Chief, Environmental Enforcement 

Section, Environment and Natural Resources 

Division. 

[FR Doc. 2011–7977 Filed 4–4–11; 8:45 am] 

BILLING CODE 4410–15–P 

DEPARTMENT OF JUSTICE 

Antitrust Division 

United States et al. v. Dean Foods 

Company; Proposed Final Judgment, 

Stipulation and Competitive Impact 

Statement 

Notice is hereby given pursuant to the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. 16(b)–(h), that a proposed 

Final Judgment, Stipulation and 

Competitive Impact Statement have 

been filed with the United States 

District Court for the Eastern District of 

Wisconsin in United States of America, 

et al. v. Dean Foods Company, Civil 

Action No. 2:10–cv–00059 (JPS). On 

January 22, 2010, the United States and 

its co-plaintiffs filed a Complaint 

alleging that Dean Foods Company’s 

acquisition of the Consumer Products 

Division of Foremost Farms USA would 

likely violate Section 7 of the Clayton 

Act, 15 U.S.C. 18. The proposed Final 

Judgment requires Dean Foods 

Company to divest its Waukesha, 

Wisconsin fluid milk plant, along with 

certain tangible and intangible assets. 

Copies of the Complaint, proposed 

Final Judgment and Competitive Impact 

Statement are available for inspection at 

the Department of Justice, Antitrust 

Division, Antitrust Documents Group, 

450 Fifth Street, NW., Suite 1010, 

Washington, DC 20530 (telephone: 202– 

514–2481), on the Department of 

Justice’s Web site at http:// 

www.usdoj.gov/atr, and at the Office of 

the Clerk of the United States District 

Court for the Eastern District of 

Wisconsin. Copies of these materials 

may be obtained from the Antitrust 

Division upon request and payment of 

the copying fee set by Department of 

Justice regulations. 

Public comment is invited within 60 

days of the date of this notice. Such 

comments, and responses thereto, will 

be published in the Federal Register 

and filed with the Court. Comments 

should be directed to Joshua H. Soven, 

Chief, Litigation I, Antitrust Division, 

Department of Justice, Washington DC, 

20530. 

Patricia A. Brink, 

Director of Civil Enforcement. 

In the United States District Court for 

the Eastern District of Wisconsin 

Milwaukee Division 

United States of America, State of 

Wisconsin, State of Illinois, and State of 

Michigan, 

Plaintiffs, 

v. 

Dean Foods Company, 

Defendant. 

10–C–0059 FILED: January 22, 2010; 

1:40PM 

Complaint 

The United States of America, acting 

under the direction of the Attorney 

General of the United States, and the 

States of Wisconsin, Illinois, and 

Michigan, by and through their 

respective Attorneys General (‘‘Plaintiff 

States’’), bring this civil action for 

equitable relief against Defendant Dean 

Foods Company (‘‘Dean’’) for violating 

Section 7 of the Clayton Act, 15 U.S.C. 

18. The United States and the Plaintiff 

States allege as follows: 

I. Introduction 

1. This lawsuit challenges Dean’s 

acquisition of the Consumer Products 

Division of Foremost Farms USA, 

consummated April 1, 2009 (the 

‘‘Acquisition’’). Foremost Farms USA 

(‘‘Foremost’’) is a dairy cooperative 

owned by approximately 2,300 dairy 

farms located in seven states, including 

Wisconsin. Through the Acquisition, 

Dean acquired two dairy processing 

plants owned by Foremost, located in 

Waukesha and DePere, Wisconsin. 

Dean’s acquisition of these plants 

violates Section 7 of the Clayton Act 

because ‘‘the effect of such acquisition 

may be substantially to lessen 

competition.’’ 15 U.S.C. 18. 

2. The Acquisition adversely affects 

two types of markets. The first are the 

markets for the sale of school milk to 

individual school districts located 

throughout the State of Wisconsin and 

the Upper Peninsula of Michigan (the 

‘‘UP’’). The second is the market for the 

sale of fluid milk to purchasers located 

in Wisconsin, the UP, and northeastern 

Illinois.1

3. The Acquisition eliminates one of 

Dean’s most aggressive competitors—a 

competitor that engaged in pricing that 

Dean considered ‘‘dangerous’’ and 

‘‘irrational.’’ In recent years, Dean and 

Foremost have been the first and fourth 

largest sellers of school milk and fluid 

milk in Wisconsin, the UP, and 

northeastern Illinois. With the 

Acquisition, Dean will account for more 

than 57 percent of fluid milk sales in the 

region. In the most recent school year, 

Dean and the two plants it acquired sold 

more than 50 percent of the school milk 

purchased in Wisconsin and the UP. 

4. Numerous school districts have 

benefitted from vigorous competition 

between Dean and Foremost. Dean and 

Foremost have frequently been the two 

lowest bidders for school milk contracts 

at numerous school districts in 

Wisconsin and the UP and, in some 

school districts, have been the only two 

bidders for those contracts. 

5. Grocery stores, convenience stores, 

and other purchasers have also 

benefitted from vigorous competition 

between Dean and Foremost for fluid 

milk contracts. Dean and Foremost have 

been the only two bidders for some 

contracts and two of only three bidders 

for other contracts. The aggressive 

competition between them has lowered 

purchasers’ costs. For example, in 2006, 

a retailer with hundreds of stores in 

northeastern Illinois held an auction for 

its fluid milk business in which the 

competition between Dean and 

Foremost saved the retailer 

approximately $1.5 million. 

6. The Acquisition’s elimination of 

head-to-head competition between Dean 

and Foremost will hurt school milk and 

fluid milk purchasers. The loss of this 

head-to-head competition leads directly 


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18784 Federal Register / Vol. 76, No. 65 / Tuesday, April 5, 2011 / Notices 

to what are referred to as 

anticompetitive ‘‘unilateral effects.’’ 

7. In the fluid milk market, the 

Acquisition is also likely to produce 

coordination among the remaining 

competitors. This coordination gives 

rise to what are referred to as 

anticompetitive ‘‘coordinated effects.’’ 

The fluid milk business in this region is 

already conducive to coordination 

among competitors. Notably, when 

deciding whether and how much to bid 

for an account, Dean and other dairy 

processors often consider the reactions 

of their competitors. Eliminating 

Foremost, which Dean describes as an 

‘‘irrational’’ pricing competitor, will 

leave only a few remaining competitors, 

whose competitive decision-making 

Dean has described as ‘‘more 

predictable’’ and ‘‘rational.’’ 

Consequently, the Acquisition will 

make coordination easier and more 

durable. 

8. As further described below, the 

Acquisition is likely to substantially 

lessen competition in the school milk 

and fluid milk markets at issue here in 

violation of Section 7 of the Clayton 

Act, 15 U.S.C. 18. Entry is unlikely to 

restore competition in a timely or 

sufficient manner. To date, Dean has not 

integrated Foremost’s plants into its 

operations in light of the pendency of 

the United States’ investigation. The 

United States and Plaintiff States ask 

this Court to declare this Acquisition 

unlawful and require Dean to divest the 

acquired assets to restore competition in 

the markets at issue. 

II. Jurisdiction & Venue 

9. The United States brings this action 

under Section 15 of the Clayton Act, as 

amended, 15 U.S.C. 4 and 25. The 

Plaintiff States bring this action under 

Section 16 of the Clayton Act, 15 U.S.C. 

26. Plaintiff State of Wisconsin brings 

this action under its authority in Wis. 

Stat. § 165.065. 

10. Dean and the assets it obtained 

through the Acquisition produce dairy 

products for sale in interstate 

commerce. Accordingly, Dean and the 

Acquisition assets are engaged in 

activities affecting interstate commerce 

under Section 7 of the Clayton Act. The 

Court has subject matter jurisdiction 

over this action pursuant to Section 15 

of the Clayton Act, as amended, 15 

U.S.C. 25, and 28 U.S.C. 1331, 1337(a) 

and 1345. 

11. Dean is present in the State of 

Wisconsin, and it transacts substantial 

business and commerce in the State. 

Accordingly, Dean is subject to personal 

jurisdiction. Venue is also proper in this 

District pursuant to Section 12 of the 

Clayton Act, 15 U.S.C. 22, and 28 U.S.C. 

1391(b)(1), (b)(2) & (c). The acquired 

dairy processing plant in Waukesha is 

located within the territory of the 

Milwaukee Division of this Court. 

III. Background 

A. The Milk Business in Wisconsin, the 

UP, and Northeastern Illinois 

12. Dairy processors purchase raw 

milk from dairy farms and agricultural 

cooperatives, pasteurize and package 

the milk, and distribute and sell the 

processed product. Fluid milk is raw 

milk that has been processed for human 

consumption. It does not include 

extended shelf life milk, ultra high 

temperature milk or aseptic milk, which 

are produced by different processes, 

generally cost significantly more than 

fluid milk, and have numerous 

significant physical differences that, 

compared with fluid milk, affect shelf 

stability and taste. 

1. Fluid Milk 

13. Dairy processors supply fluid milk 

directly to retailers, distributors, broadline food service companies, and 

institutions such as hospitals and 

nursing homes. The vast majority of 

fluid milk is sold directly by processors 

to retailers. The balance of sales is made 

to distributors, food service companies, 

and institutions. Distributors and food 

service companies resell the milk that 

they purchase from processors to small 

retailers, restaurants, and institutions. 

Retailers in Wisconsin, the UP, and 

northeastern Illinois do not resell fluid 

milk to other retailers or institutions in 

any substantial quantity. Retail demand 

for fluid milk is based directly on 

consumer demand. 

14. Milk processors charge different 

prices to different purchasers for the 

same product based on a variety of 

factors, including the number of 

competitive alternatives available to the 

purchaser. Large retailers typically 

request bids from milk processors. 

Distributors, institutions, and small 

retailers generally purchase their milk 

from price lists that dairy processors 

issue. However, these customers 

sometimes obtain rebates, discounts, or 

other forms of price relief, so that two 

customers covered by the same price list 

may pay different prices. Bid prices are 

based on the processor’s product, 

transportation, and service costs, the 

processor’s capacity utilization, and the 

number and strength of processors 

likely to offer competing bids, among 

other factors. 

15. Distance between processors and 

purchasers is an important 

consideration in fluid milk pricing 

because fluid milk has a limited shelf 

life and is costly to transport. These 

costs result in most customers 

purchasing fluid milk from nearby 

processing plants. For example, more 

than 90 percent of the milk sold to 

customers in Wisconsin and the UP 

traveled less than 150 miles from the 

plant in which it was processed. 

2. School Milk 

16. School milk is fluid milk 

packaged and distributed for sale to 

school districts, typically in half-pint 

containers. Dean, Foremost, and other 

school milk suppliers often use 

distributors to supply and service 

school districts. Dairy processors 

generally use one distributor per service 

area. While school milk contracts 

occasionally include other products, 

school milk accounts for the vast 

majority of the dollar value of these 

contracts. 

17. School milk delivery is not just a 

matter of dropping product off at the 

curb. Different school districts specify 

their individualized service 

requirements in contracts with 

processors. For example, some school 

districts require multiple deliveries per 

week because they have limited 

refrigerated storage space; some require 

guaranteed emergency deliveries. Most 

school districts require the capability to 

deliver to all of the schools in the 

district. Many require early morning or 

other specific delivery times to avoid 

conflicts with the arrival of 

schoolchildren and buses. Other 

services can include milk reordering, 

cooler supply, cooler restocking, cooler 

cleaning and maintenance, carton 

rotation, retrieval of spoiled and 

damaged product, and automatic 

allotment of credit for retrieved product. 

18. The number of processors from 

which a school district can successfully 

solicit competitive bids is often very 

small. Given the limited volume of milk 

delivered to each school, the extensive 

and highly individualized service 

requirements, and the seasonal nature of 

school milk demand, among other 

considerations, it is almost always 

uneconomic for a dairy processor to 

supply a new contract unless the 

processor already has significant fluid 

milk distribution in or near the school 

district’s area. Dairy processors that do 

not already distribute fluid milk locally 

can rarely bid competitively. This is 

particularly relevant in sparsely 

populated areas such as northern 

Wisconsin and the UP. 

19. Individual school districts solicit 

bids for school milk, although groups of 

school districts will occasionally solicit 

bids collectively. However, even school 

districts involved in collective 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 76, No. 65 / Tuesday, April 5, 2011 / Notices 18785 

solicitations typically award their 

contracts separately. Consequently, 

dairy processors tailor their bids to each 

school district or school district group 

that solicits collectively. Bid prices are 

based on the processor’s product, 

transportation, and service costs, the 

processor’s capacity utilization, and the 

number and competitiveness of 

processors likely to offer competing 

bids, among other factors. 

B. The Acquisition 

20. Dean is one of the largest food and 

beverage producers in this country, with 

revenues of $12.5 billion in 2008. 

Dean’s Dairy Group is the country’s 

largest processor and distributor of milk 

and other dairy products. Dean is a 

corporation organized under Delaware 

state law, with its principal place of 

business in Dallas, Texas. 

21. The Acquisition is the latest in a 

series of acquisitions by Dean of smaller 

dairy processors across the United 

States. Since 1996, Dean has made more 

than 100 acquisitions, which have 

added to Dean’s market share and 

increased its size substantially. 

22. Foremost is a dairy cooperative 

headquartered in Baraboo, Wisconsin, 

and formed under Wisconsin state law. 

Like other agricultural cooperatives, 

Foremost is a member-owned business 

association. Foremost is governed by a 

21-member Board of dairy farmers. Prior 

to the Acquisition, Foremost processed 

its members’ raw milk at its DePere and 

Waukesha plants, as well as at other 

facilities. The DePere and Waukesha 

plants were owned and operated by 

Foremost’s Consumer Products 

Division. On or about April 1, 2009, 

Dean bought substantially all of the 

Consumer Products Division’s assets for 

$35 million. The Acquisition was not 

required to be reported beforehand to 

Federal antitrust authorities under the 

Federal antitrust notification statute. 

C. Dean’s Rationale for the Acquisition 

23. While Dean’s fortunes have been 

rising, the same has not been true for 

Foremost. In 2006 and 2007, Foremost 

lost some fluid milk customers that 

preferred a processor with a broader 

geographic reach. Consequently, 

Foremost’s Waukesha and DePere plants 

were operating at less than two-thirds of 

their fluid milk capacity, giving 

Foremost the most excess capacity in 

Wisconsin, the UP, and northeastern 

Illinois. 

24. Excess capacity creates an 

incentive to bid more aggressively for 

fluid and school milk contracts. Because 

of its substantial excess capacity, 

Foremost was pricing aggressively to 

secure new business. Unlike Foremost, 

Dean did not have substantial excess 

capacity and so did not have the same 

economic incentives as Foremost. As a 

result of Foremost’s aggressive pricing, 

Dean faced the choice of losing business 

or cutting its margins. Neither approach 

was attractive to Dean. 

25. The problem that Foremost posed 

was not unique. Dean saw competitors 

such as Foremost and other local 

competitors with excess capacity as 

posing a serious problem for Dean’s 

profitability. Dean’s Chief Executive 

Officer, Gregg Engles, articulated the 

competitive issue facing Dean in a 

September 2008 speech to Dean’s top 

executives: 

26. 

‘‘Every one of you has an irrational local 

competitor story. * * * Why do we have 

irrational local competitors? Because we have 

too much capacity in this industry * * * 

these guys are losing share, * * * they have 

less volume in their plants, * * * so they 

default to the same game that gets played in 

industries that have little volume growth and 

too much capacity everywhere around the 

world. People play for share, and in this 

category, you play for share with price.’’ 

27. Dean’s own internal documents 

confirm that Dean viewed Foremost as 

one of those ‘‘irrational’’ local 

competitors because of Foremost’s 

excess capacity, among other reasons. In 

2008, as part of an effort to develop a 

strategic growth plan for its fluid milk 

business, Dean’s corporate headquarters 

asked the group vice presidents in each 

region to prioritize their key competitive 

issues. The Vice President for the North 

Central region (which includes 

Wisconsin) identified his key concern as 

‘‘Midwest excess capacity lies with 

cooperatives with staying power.’’ 

Cooperatives, such as Foremost, were 

competitive threats because their 

‘‘earnings expectations [are] lower than 

Deans,’’ because the ‘‘co-op goal is to 

move Member milk,’’ and because ‘‘their 

plants are under utilized.’’ 

28. The problem this created for Dean 

was obvious. Competition with these 

cooperatives was predicted to ‘‘lower 

margins and condition clients [to] the 

benefits of shopping their business.’’ 

Along with one other cooperative in the 

region, Foremost was identified as a 

particularly ‘‘dangerous’’ competitor 

because ‘‘they need to add volume to 

maintain their lo[w] cost strategy.’’ In 

other words, according to Dean, 

Foremost was more willing to accept 

lower prices for processed fluid and 

school milk than Dean found 

acceptable. 

29. In 2007, the general manager at 

Dean’s Verifine plant in Sheboygan, 

Wisconsin, reported to his boss that he 

was ‘‘seeing alot [sic] of off the wall 

pricing coming from [Foremost]’’ and 

that he was ‘‘worried about them coming 

at us again at [WalMart] not to mention 

the rest of the market.’’ In 2009, after 

receiving reports of very low Foremost 

prices in several grocery and 

convenience stores in the UP, the 

general manager of Dean’s Marquette, 

Michigan, plant complained to his boss 

that ‘‘[t]his is the most aggressive pricing 

the UP has seen since probably the 60’s. 

Our volume is off roughly 15 percent as 

the effects of this onslaught really kick 

in * * * I know you’re with me on this, 

so how can we cease/desist and regain 

some sanity?’’ 

30. As part of Dean’s 2008 Strategic 

Growth Plan, Dean proposed future 

acquisitions, which included 

problematic local processors. Ed Fugger, 

Dean’s acquisitions chief, highlighted 

that fragmentation ‘‘[d]rives margin 

compression,’’ and that a significant part 

of the fluid milk market ‘‘remains highly 

fragmented.’’ In handwritten notes he 

wrote in preparation for his speech to 

Dean’s senior management, and later, 

Dean’s Board of Directors, Fugger wrote 

that the ‘‘benefit of acquisition in these 

m[ar]k[e]ts is margin expansion’’ 

(emphasis added). In other words, by 

eliminating this fragmentation Dean 

could increase its profits. 

31. The Strategic Growth Plan 

included ‘‘Potential Acquisition Targets’’ 

for each of Dean’s regions. The targets 

for the North Central Region included 

Foremost, which Dean had identified as 

one of two ‘‘irrational competitors’’ that 

are ‘‘significantly short on volume.’’ 

32. Dean eliminated the competitive 

threat posed by Foremost by acquiring 

its two milk processing plants. Any 

efficiencies Dean may realize from 

acquiring the two plants are not likely 

to reverse the anticompetitive impact of 

eliminating a competitor responsible for 

the ‘‘most aggressive pricing’’ Dean had 

seen in 40 years. There was an 

alternative to this outcome. At the time 

Foremost accepted Dean’s offer to 

acquire these plants, another potential 

buyer was pursuing Foremost’s plants. 

IV. The Competitive Harm in School 

Milk Markets 

A. School Milk Is a Relevant Market 

33. School milk is a relevant product 

market and line of commerce under 

Section 7 of the Clayton Act. School 

districts have no reasonable product 

alternatives to school milk. 

34. The United States Department of 

Agriculture sponsors several programs 

to reimburse schools for meals served to 

students from lower-income families. To 

qualify, schools must offer milk to every 

student, regardless of family income. 


srobinson on DSKHWCL6B1PROD with NOTICES
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2See U.S. Dep’t of Justice, Horizontal Merger 

Guidelines § 1.51 (1997), available at http:// 

www.justice.gov/atr/public/guidelines/horiz_book/ 

hmg1.html. The HHI is calculated by squaring the 

market share of each firm competing in the market 

and then summing the resulting numbers. For 

example, for a market consisting of four firms with 

shares of 30, 30, 20, and 20 percent, the HHI is 

2,600 (302 + 302 + 202 + 202 = 2,600). It approaches 

zero when a market is occupied by a large number 

of firms of relatively equal size and reaches a 

maximum of 10,000 points when a market is 

controlled by a single firm. The HHI increases both 

as the number of firms in the market decreases and 

as the disparity in size between those firms 

increases. 

Schools will not substitute other 

products for school milk even at 

substantially higher milk prices because 

they would lose their Federal meal 

reimbursement. 

B. The Relevant Geographic Markets 

35. Each school district in Wisconsin 

and the UP constitutes a relevant 

geographic market or section of the 

country within the meaning of Section 

7 of the Clayton Act. As alleged in 

paragraph 19, individual school districts 

solicit school milk contract bids from 

processors. In response, processors 

engage in ‘‘price discrimination,’’ i.e., 

charging different prices to different 

customers. Processors develop 

individualized bids based on both cost 

and non-cost factors (see e.g., paragraph 

14). School districts are unlikely to 

engage in arbitrage, i.e., reselling among 

customers, to offset the processors’ 

ability to engage in price discrimination 

among school districts. Therefore, a 

hypothetical monopolist supplying 

school milk to any particular district 

would impose (at least) a small but 

significant non-transitory price increase 

(e.g., five percent). 

C. The Acquisition Will Result in 

Anticompetitive Unilateral Effects 

36. School districts in Wisconsin and 

the UP have only a few choices for 

school milk suppliers. There are 

numerous school districts, particularly 

in northeastern Wisconsin and the 

western UP, for which the Acquisition 

merged the two processors that were 

best situated to serve the district. In 

many cases, the Acquisition created a 

‘‘merger to monopoly,’’ leaving Dean as 

the only likely bidder. These school 

districts include those where Dean and 

Foremost were the only two dairy 

processors to bid in recent years. The 

elimination of head-to-head competition 

between Dean and Foremost will likely 

substantially lessen competition in 

these school milk markets and enable 

Dean to raise prices and/or reduce 

services. 

37. In addition, in a separate set of 

school districts, either Dean or Foremost 

was the only bidder and the other 

processor was the next-lowest-cost 

supplier because of factors such as 

distance from the processing plant or 

the presence of an established 

distribution network. It is likely that 

prices will rise and/or services will be 

reduced in these school milk markets, 

regardless of whether both Dean and 

Foremost submitted formal bids before 

the Acquisition. There is also a 

substantial number of school districts in 

Wisconsin and the UP for which Dean 

and Foremost were two of only three 

recent or likely future bidders. For these 

school districts, the Acquisition 

represents a ‘‘merger to duopoly.’’ 

38. In addition, Foremost was an 

especially aggressive bidder. This forced 

its rivals to keep their bid prices as low 

as possible or risk losing substantial 

amounts of school milk business. 

V. The Competitive Harm in the Fluid 

Milk Market 

A. Fluid Milk Is a Relevant Product 

Market 

39. Fluid milk is a relevant product 

market and line of commerce under 

Section 7 of the Clayton Act. Fluid milk 

is a product with special nutritional 

characteristics and has no practical 

substitutes. 

40. Consumer demand for fluid milk 

is relatively inelastic, i.e., fluid milk 

consumption does not decrease 

significantly in response to a price 

increase. Demand by retailers, 

distributors, and other purchasers of 

fluid milk is also inelastic because it is 

based on consumer demand. As a result, 

a hypothetical monopolist over fluid 

milk would profitably impose at least a 

small but significant and non-transitory 

price increase (e.g., five percent). 

B. The Relevant Geographic Market 

41. Fluid milk processors are able to 

charge different prices to buyers in 

different areas, i.e., they can price 

discriminate. In the presence of price 

discrimination, relevant geographic 

markets may be defined by reference to 

the location of buyers. In particular, a 

relevant geographic market for fluid 

milk refers to a region within which 

purchasers can be targeted for a price 

increase. A portion of the fluid milk 

supplied to the relevant geographic 

market comes from plants located 

outside of Wisconsin, the UP, and 

northeastern Illinois. 

42. Wisconsin, the UP, and 

northeastern Illinois constitute a 

relevant geographic market and section 

of the country under Section 7 of the 

Clayton Act. As discussed in paragraph 

15, most customers purchase fluid milk 

from suppliers with processing plants 

located near them because of the costs 

associated with transportation and shelf 

life. Prior to the Acquisition, Foremost 

sold virtually all of its fluid milk to 

purchasers located in the relevant 

geographic market. Dean competed to 

supply fluid milk to purchasers 

throughout this same area. 

C. Market Concentration 

43. The Acquisition will result in a 

substantial increase in the concentration 

of processors that compete to supply 

fluid milk to purchasers located in the 

relevant geographic market. Some of 

these processors are located outside of 

Wisconsin, the UP, and northeastern 

Illinois. Prior to the Acquisition, Dean 

had the largest share of sales to 

purchasers within the relevant 

geographic market. Dean accounted for 

44.6 percent of fluid milk sales; 

Foremost accounted for another 12.6 

percent. As a result of the Acquisition, 

Dean now has more than 57 percent of 

all fluid milk sales in the relevant 

geographic market. There are only two 

other competitors with more than five 

percent of fluid milk sales in the 

relevant geographic market, Kemps LLC 

(a subsidiary of Hood LLC) (‘‘Kemps’’) 

and Prairie Farms Dairy, Inc., which 

have 17 and 15 percent, respectively. 

Moreover, Dean’s post-Acquisition 

shares are even higher in certain areas 

within the relevant geographic market: 

over 85 percent in the UP and over 60 

percent in Green Bay, Wisconsin, and in 

northeastern Illinois (including 

Chicago). 

44. As articulated in the Horizontal 

Merger Guidelines issued by the 

Department of Justice and the Federal 

Trade Commission, the HerfindahlHirschman Index (‘‘HHI’’) is a measure of 

market concentration.2 The Acquisition 

increases the HHI by 1,127 points to 

3,830, indicating a substantial increase 

in concentration. The change in the HHI 

is even more pronounced in certain 

areas within the relevant geographic 

area. For example, in the UP, the HHI 

increased by 2,814 points to 7,510, and 

in Green Bay, the HHI increased by 

1,728 to 4,777. 

D. The Acquisition Will Result in 

Competitive Harm 

45. The Acquisition will likely 

substantially lessen competition among 

fluid milk producers in the relevant 

geographic market, resulting in higher 

fluid milk prices to purchasers than 

would exist in the absence of the 

Acquisition. The Acquisition will 

eliminate head-to-head competition that 

has benefitted and would otherwise 

continue to benefit purchasers and final 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 76, No. 65 / Tuesday, April 5, 2011 / Notices 18787 

consumers. The Acquisition will also 

result in easier and more durable 

coordinated interaction among Dean 

and its few remaining competitors. 

1. The Anticompetitive Effects From the 

Loss of Head-to-Head Competition 

46. Dean and Foremost often 

competed head-to-head to win fluid 

milk contracts because they were the 

nearest fluid milk processors to many of 

the purchasers in the relevant 

geographic market. As discussed in 

paragraph 15, proximity to the 

purchaser is an important factor in a 

processor’s competitiveness. Prior to the 

Acquisition, Foremost competed with 

Dean throughout the relevant 

geographic market. The head-to-head 

competition between Dean and 

Foremost was most pronounced and 

pervasive in the UP and northeast and 

southeast Wisconsin, where the Dean 

and Foremost plants were the two 

closest plants to many fluid milk 

purchasers. 

47. As discussed in paragraph 23, 

Foremost had substantial excess 

capacity, and as a result, was pricing 

aggressively to secure new business. 

The presence of Foremost as an 

aggressive pricing competitor to Dean 

and a constraining force on Dean’s 

pricing is reflected in the internal Dean 

documents discussed in paragraphs 25 

to 29. The elimination of this head-tohead competition likely will produce 

higher prices and/or reduced services 

for many purchasers in the relevant 

geographic market. These effects will 

vary among purchasers because, as 

discussed previously, different 

purchasers have different competitive 

options. Thus, the prices paid and 

services received will continue to differ 

among purchasers after the Acquisition, 

but for many purchasers the prices they 

pay and/or the services they receive will 

be adversely affected by the Acquisition. 

2. The Acquisition Will Facilitate 

Anticompetitive Coordination 

48. By eliminating Foremost, a 

significant, disruptive, and aggressive 

competitor, the Acquisition also will 

likely substantially lessen competition 

among the remaining competitors 

selling fluid milk in the relevant 

geographic market by facilitating 

coordination among them. Dean and its 

few remaining competitors will be more 

likely to decline to bid aggressively for 

one another’s established customers out 

of concern for retaliation, thereby 

allocating customers among one another 

based on a mutual recognition of what 

supplier serves what customers. This 

form of coordination is easier when 

there are fewer competitors and they 

can identify one another’s customers. 

With the elimination of Foremost, 

purchasers in many areas of the relevant 

geographic market will have only two or 

three significant suppliers of fluid milk. 

For example, in Wisconsin, Dean and 

Kemps, its next-largest competitor, now 

account for more than 80 percent of 

sales. 

49. Even before the Acquisition, Dean 

and other dairy processors besides 

Foremost were at times content not to 

attack one another’s large accounts. In a 

recent bidding event, Dean refused to 

bid aggressively for a major supermarket 

chain that was Kemps’s largest account, 

despite the purchaser’s complaint to 

Dean that Dean’s bid was too high. A 

Dean executive testified that stealing the 

account from Kemps would have put a 

Kemps plant ‘‘out of business or to its 

knees’’ and that ‘‘we’re not going to do 

that right now. You pick your fights.’’ In 

contrast, Foremost was not content to 

pick its fights. When Foremost was 

bidding for the same large supermarket 

chain, it submitted a competitive bid, 

even though Foremost realized that the 

‘‘cost’’ of winning that business could be 

high, due to the potential for retaliation. 

The general manager of Foremost’s 

Morning Glory plant estimated that 

retaliation at five of his larger accounts 

could cost almost $500,000 per year. 

50. Whereas Foremost was routinely 

labeled as an ‘‘irrational’’ competitor by 

Dean executives, the Group Vice 

President for Dean’s North Central 

region labeled two other processors 

‘‘good competitors’’ in his 2008 strategic 

growth planning document. By ‘‘good 

competitor,’’ Dean’s Vice President 

admitted he meant that, unlike 

Foremost, these competitors were ‘‘more 

predictable’’ in terms of ‘‘where they’re 

going to poke you in the eye and where 

they’re not, whereas the other * * * 

fellows [are] poking all the time.’’ With 

this Acquisition, only the so-called 

‘‘good competitors’’ will remain. 

51. In at least one instance, Dean 

successfully sent price signals to its 

competitors. In 2008, Dean announced 

an upcoming fuel surcharge price 

increase, and one of its competitors 

followed suit. In reporting this to his 

boss, the Group Vice President for the 

region in which this occurred wrote, 

‘‘[our competitor] followed us this week 

with a similar increase. The strategy 

paid off.’’ His boss then declared that it 

is a good practice ‘‘to signal your 

intentions early and often.’’ The Vice 

President for the North Central region, 

which includes Wisconsin, then 

instructed his staff to ‘‘get out early for 

July and signal the marketplace.’’ 

52. By reducing the number of 

competitors serving the relevant 

geographic market and eliminating an 

aggressive competitor with large 

amounts of excess capacity, the 

Acquisition makes coordination easier 

and more durable. 

VI. Entry Is Unlikely 

53. Entry is unlikely to be sufficient 

or timely enough to offset the 

anticompetitive effects of the 

Acquisition. Firms currently serving the 

fluid milk and school milk markets in 

Wisconsin, the UP, and northeastern 

Illinois are unlikely to expand their 

service area or presence sufficiently to 

substantially mitigate the loss of 

Foremost’s head-to-head competition 

with Dean in the fluid milk and school 

milk markets, or to disrupt coordinated 

interaction by Dean and its remaining 

competitors in the fluid milk market. 

Firms not currently serving these 

markets are unlikely to enter in the 

foreseeable future. 

VII. Violations Alleged 

54. The United States and the Plaintiff 

States hereby incorporate the allegations 

of paragraphs 1 through 52 above. 

A. Count 1 

55. The Acquisition likely will 

substantially lessen competition in 

interstate trade and commerce, in 

violation of Section 7 of the Clayton 

Act, 15 U.S.C. 18, in that: 

a. Actual and potential competition 

between Foremost and Dean in the State 

of Wisconsin and the UP in the sale of 

school milk will be eliminated; and 

b. competition in the State of 

Wisconsin and the UP in the sale of 

school milk will be substantially 

lessened. 

B. Count 2 

56. The Acquisition likely will 

substantially lessen competition in 

interstate trade and commerce, in 

violation of Section 7 of the Clayton 

Act, 15 U.S.C. 18, in that: 

a. Actual and potential competition 

between Foremost and Dean in the State 

of Wisconsin, the UP, and northeastern 

Illinois in the sale of fluid milk will be 

eliminated; and 

b. competition in the State of 

Wisconsin, the UP, and northeastern 

Illinois in the sale of fluid milk will be 

substantially lessened. 

VIII. Relief Requested 

57. The United States and the Plaintiff 

States request that this Honorable Court: 

a. Adjudge and decree that the 

Acquisition violates Section 7 of the 

Clayton Act, 15 U.S.C. 18; 

b. compel Dean to divest all of the 

assets and interests it acquired as part 

of the Acquisition; 


srobinson on DSKHWCL6B1PROD with NOTICES
18788 Federal Register / Vol. 76, No. 65 / Tuesday, April 5, 2011 / Notices 

1 ‘‘Northeastern Illinois’’ is defined as the 

following counties in the State of Illinois: Cook 

County, DeKalb County, DuPage County, Grundy 

County, Kane County, Kendall County, Lake 

County, McHenry County, and Will County. 

c. permanently enjoin Dean from 

further ownership and operation of the 

assets acquired as part of the 

Acquisition; 

d. compel Dean, including any of its 

subsidiaries, joint ventures, successors 

or assigns, and all persons acting on 

behalf of any of the foregoing, to provide 

the United States (and any Plaintiff 

State(s) if commerce in that state(s) is 

potentially affected) with notification at 

least 30 calendar days prior to any 

acquisition, in whole or in part, of any 

school milk or fluid milk processing 

operation, notwithstanding the 

consideration Dean intends to pay for 

such acquisition; and 

e. award to each plaintiff its costs for 

this action and such other and further 

relief as may be appropriate and as the 

Court may deem just and proper. 

Dated: January 22, 2010. 

Respectfully submitted, 

FOR PLAINTIFF UNITED STATES OF 

AMERICA 

/s/ lllllllllllllllllll

Christine A. Varney, 

Assistant Attorney General, Antitrust 

Division. 

/s/ lllllllllllllllllll

William F. Cavanaugh, 

Deputy Assistant Attorney General, Antitrust 

Division. 

/s/ lllllllllllllllllll

Joshua H. Soven, Chief, 

Joseph M. Miller, Assistant Chief, 

Litigation I Section, Antitrust Division. 

/s/ lllllllllllllllllll

Patricia A. Brink, 

Deputy Director of Operations, Antitrust 

Division. 

/s/ lllllllllllllllllll

Karl D. Knutsen, 

Ryan M. Kantor, 

Jon B. Jacobs. 

Scott I. Fitzgerald, 

Adam Gitlin, 

Mitchell H. Glende, 

Tiffany C. Joseph, 

Barry J. Joyce, 

David C. Kelly, 

Richard S. Martin, 

Richard D. Mosier, 

Peter J. Mucchetti, 

Julie A. Tenney, 

Paul J. Torzilli, 

Trial Attorneys, U.S. Department of Justice, 

Antitrust Division, Litigation I Section, 450 

5th Street, Suite 4100, Washington, DC 

20530. 

Dated: January 21, 2010. 

Respectfully submitted, 

FOR PLAINTIFF UNITED STATES OF 

AMERICA 

James L. Santelle, 

United States Attorney. 

By: 

/s/ lllllllllllllllllll

Matthew V. Richmond, 

Chief, Civil Division, United States Attorney’s 

Office, Eastern District of Wisconsin, 517 East 

Wisconsin Ave., Room 530, Milwaukee, 

Wisconsin 53202, (414) 297–1747 (direct), 

(414) 297–1700 (office), (414) 297–4394 (fax), 

Matthew.Richmond@usdoj.gov. 

Dated: January 22, 2010. 

Respectfully submitted, 

FOR PLAINTIFF STATE OF WISCONSIN 

J.B. Van Hollen, 

Attorney General. 

By: 

/s/ lllllllllllllllllll

Steven P. Means, Bar Number: 1011355, 

Attorney for Plaintiff State of Wisconsin, 

Wisconsin Department of Justice, 17 West 

Main Street, Madison, WI 53703, Telephone: 

(608) 266–3860, Fax: (608) 266–1656, E-mail: 

meanssp@doj.state.wi.us. 

By: 

/s/ lllllllllllllllllll

Gwendolyn J. Cooley, Bar Number: 1053856 

Attorney for Plaintiff State of Wisconsin, 

Wisconsin Department of Justice, 17 West 

Main Street, Madison, WI 53703, Telephone: 

(608) 261–5810, Fax: (608) 267–2778, E-mail: 

cooleygj@doj.state.wi.us. 

Dated: January 22, 2010. 

Respectfully submitted, 

FOR PLAINTIFF STATE OF ILLINOIS 

Lisa Madigan, 

Attorney General 

By: 

/s/ lllllllllllllllllll

Robert W. Pratt, 

Chief, Antitrust Bureau, Office of the 

Attorney General, State of Illinois 100 West 

Randolph Street, Chicago, Illinois 60601, 

(312) 814–3722. 

Dated: January 22, 2010. 

Respectfully submitted, 

FOR PLAINTIFF STATE OF MICHIGAN 

Michael A. Cox, 

Attorney General. 

By: 

/s/ lllllllllllllllllll

D.J. Pascoe, 

Assistant Attorney General, Corporate 

Oversight Division, Attorney for the State of 

Michigan, G. Mennen Williams Building, 6th 

Floor, 525 W. Ottawa Street, Lansing, 

Michigan 48933, Telephone: (517) 373–1160. 

United States District Court for the 

Eastern District of Wisconsin Milwaukee 

Division 

United States of America, State of 

Wisconsin, State of Illinois, and State of 

Michigan, Plaintiffs, 

v. 

Dean Foods Company, Defendant. 

Civil Action No. 2:10–cv–00059 (JPS) 

Competitive Impact Statement 

Plaintiff United States of America 

(‘‘United States’’), pursuant to Section 

2(b) of the Antitrust Procedures and 

Penalties Act (‘‘APPA’’ or ‘‘Tunney Act’’), 

15 U.S.C. 16(b)–(h), files this 

Competitive Impact Statement relating 

to the proposed Final Judgment 

submitted for entry in this civil antitrust 

proceeding. 

I. Nature and Purpose of the Proceeding 

The United States filed a civil 

antitrust Complaint under Section 15 of 

the Clayton Act, 15 U.S.C. 25, on 

January 22, 2010, alleging that the 

acquisition by Dean Foods Company 

(‘‘Dean’’) of two fluid milk processing 

plants in Wisconsin from Foremost 

Farms USA (‘‘Foremost’’) violated 

Section 7 of the Clayton Act (‘‘Section 

7’’), 15 U.S.C. 18. The Complaint alleges 

that Dean’s acquisition of the Foremost 

plants (the ‘‘Acquisition’’) likely would 

substantially lessen competition in two 

types of markets: (1) The sale of fluid 

milk to customers (e.g., retailers and 

distributors) located in Wisconsin, 

northeastern Illinois; 1 and the Upper 

Peninsula of Michigan (the ‘‘UP’’); and 

(2) the sale of school milk to school 

districts located throughout Wisconsin 

and the UP. On March 29, 2011, the 

United States filed a proposed Final 

Judgment designed to remedy the 

competitive harm caused by the 

Acquisition. Under the proposed Final 

Judgment, which is explained more 

fully below, Dean is required to divest 

the Waukesha milk processing plant and 

related assets. 

The United States and Dean have 

stipulated that the proposed Final 

Judgment may be entered after 

compliance with the APPA. Entry of the 

proposed Final Judgment would 

terminate this action, except that the 

Court would retain jurisdiction to 

construe, modify, or enforce the 

provisions of the proposed Final 

Judgment and to punish violations 

thereof. 

II. Events Giving Rise to the Alleged 

Violation 

A. Defendant and the Acquisition 

Dean is one of the largest food and 

beverage producers in this country, with 

revenues of approximately $12 billion 

in 2010. Dean’s Dairy Group is the 

country’s largest processor and 

distributor of milk and other dairy 

products. Dean is a corporation 

organized under Delaware state law, 

with its principal place of business in 

Dallas, Texas. 

Foremost is a dairy cooperative 

headquartered in Baraboo, Wisconsin, 

and formed under Wisconsin state law. 


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2Arbitrage occurs when purchasers protect 

themselves by buying the same product from 

favored purchasers in other areas. 

3See U.S. Dept. of Justice & FTC, Horizontal 

Merger Guidelines § 4.2.2 (2010). 

4U.S. Dept. of Justice & FTC, Horizontal Merger 

Guidelines §§ 5.1, 5.2. 

Like other agricultural cooperatives, 

Foremost is a member-owned business 

association. Prior to Dean’s acquisition 

of the Foremost plants, Foremost 

processed its members’ raw milk at its 

De Pere and Waukesha plants, as well 

as at other facilities. On April 1, 2009, 

Dean acquired the De Pere and 

Waukesha plants, along with related 

assets, from Foremost for $35 million. 

This Acquisition was not required to be 

reported to Federal antitrust authorities 

under the Hart–Scott–Rodino Antitrust 

Improvements Act of 1976, as amended, 

15 U.S.C. 18a (the ‘‘HSR Act’’). 

B. Competitive Effects of the Acquisition 

1. Fluid Milk 

a. Fluid Milk Is a Relevant Product 

Market 

The Complaint alleges that fluid milk 

is a relevant product market. Fluid milk 

is a product with special nutritional 

characteristics and has no practical 

substitutes. Consumer demand for fluid 

milk is relatively inelastic, i.e., fluid 

milk consumption does not decrease 

significantly in response to a price 

increase. Demand by retailers, 

distributors, and other customers of 

fluid milk is also inelastic because it is 

based on consumer demand. 

b. Wisconsin, Northeastern Illinois, and 

the Upper Peninsula of Michigan 

Constitute a Relevant Geographic 

Market 

The Complaint alleges that 

Wisconsin, northeastern Illinois, and 

the UP constitute a relevant geographic 

market for the sale of fluid milk. The 

Plaintiffs defined this geographic market 

with respect to the locations of the 

customers (e.g., grocery stores), rather 

than the location of the competitors (i.e., 

fluid milk processing plants) because, as 

the Complaint alleges, fluid milk 

processors can price discriminate, in 

other words, they can charge different 

fluid milk prices (net of transportation 

cost) to customers in different areas. 

This price discrimination is possible 

because processors individually 

negotiate prices with many customers, 

deliver the fluid milk to their customers’ 

locations, and customers cannot 

eliminate price disparities through 

arbitrage, due in part to high 

transportation costs.2

The price discrimination analysis 

underlying the geographic market 

definition set forth in the Complaint is 

thus consistent with the 2010 

Horizontal Merger Guidelines, which 

explain that ‘‘[f]or price discrimination 

to be feasible, two conditions typically 

must be met: differential pricing and 

limited arbitrage.’’ U.S. Dept. of Justice 

& FTC, Horizontal Merger Guidelines § 3 

(2010). More specifically, when 

suppliers can profitably charge different 

prices (net of costs) to different 

customers in different locations, 

competition does not occur at the point 

of production but at the customers’ 

locations. Consequently, the relevant 

analysis focuses on how much a 

hypothetical monopolist would want to 

raise price at various points of 

consumption, and the relevant 

geographic market is defined around the 

location of those customers vulnerable 

to a price increase.3 If a hypothetical 

monopolist can identify and price 

differently to buyers in certain areas 

(‘‘targeted buyers’’), and if arbitrage is 

unlikely, then a hypothetical 

monopolist would profitably impose a 

discriminatory price increase on buyers 

in that area. 

Applying this analysis, the evidence 

in this case satisfies the conditions 

necessary to show price discrimination. 

The evidence shows that fluid milk 

processors negotiate prices for delivery 

of fluid milk to individual customers in 

Wisconsin, northeastern Illinois, and 

the UP and that prices vary among the 

customers. The evidence also shows 

that customers cannot arbitrage because 

of significant loading and shipping costs 

incurred in reselling. Moreover, the 

customers lack the coolers necessary to 

act as arbitrageurs on a significant scale 

and could not arbitrage fluid milk 

labeled with their own trademarks to 

other customers. Thus, fluid milk 

customers in Wisconsin, northeastern 

Illinois and the UP are vulnerable to 

anticompetitive effects flowing from 

Dean’s acquisition of the Foremost 

plants. As the Complaint alleges, prior 

to the Acquisition, Foremost sold 

virtually all of its fluid milk to 

customers located in these locations, 

and Dean competed to supply fluid milk 

to customers throughout this same area. 

Fluid milk customers located in 

Wisconsin, northeastern Illinois, and 

the UP would not defeat a price increase 

by a hypothetical monopolist of fluid 

milk by substituting to other products or 

by taking advantage of arbitrage. 

c. The Acquisition Will Likely 

Substantially Lessen Competition in the 

Sale of Fluid Milk to Customers Located 

in Wisconsin, Northeastern Illinois, and 

the Upper Peninsula of Michigan 

The Complaint alleges that the 

Acquisition will likely substantially 

lessen competition in the sale of fluid 

milk in the relevant geographic market. 

Indicative of this are the effects of the 

Acquisition on market shares. In a 

geographic market defined on the basis 

of price discrimination, the participants 

in the relevant market are firms that 

currently supply customers in the 

market and firms that could 

economically begin doing so in the 

event of a small price increase. Market 

shares typically are assigned to these 

firms on the basis of their current (or 

projected) sales to customers within the 

geographic market, without regard to the 

location of the processing plant from 

which the product is supplied.4

Based on current sales, as a result of 

the Acquisition, Dean increased its 

share of fluid milk sold to customers in 

the relevant geographic market from 

approximately 45 percent to more than 

57 percent. There are only two other 

competitors with more than five percent 

of fluid milk sales in the relevant 

geographic market—Kemps LLC (a 

subsidiary of Hood LLC) accounts for 

approximately 17 percent of sales and 

Prairie Farms Dairy, Inc. accounts for 

approximately 15 percent of sales. The 

Acquisition will eliminate head-to-head 

competition that has benefitted, and 

would otherwise continue to benefit, 

customers and final consumers. The 

Acquisition will also likely facilitate 

easier and more durable coordinated 

interaction among Dean and its few 

remaining competitors. 

Dean and Foremost often competed 

head-to-head to serve fluid milk 

customers. Prior to the Acquisition, 

Foremost competed with Dean 

throughout the relevant geographic 

market. Foremost had substantial excess 

capacity, and as a result, competed 

aggressively to secure new business. 

The presence of Foremost as an 

aggressive pricing competitor to Dean 

served as a constraining force on Dean’s 

pricing. The elimination of this head-tohead competition likely will produce 

higher prices for many customers of 

fluid milk in the relevant geographic 

market. By eliminating Foremost, a 

significant, disruptive, and aggressive 

competitor, the Acquisition also will 

likely substantially lessen competition 

among the remaining competitors 

selling fluid milk in the relevant 


srobinson on DSKHWCL6B1PROD with NOTICES
18790 Federal Register / Vol. 76, No. 65 / Tuesday, April 5, 2011 / Notices 

5U.S. Dept. of Justice & FTC, Horizontal Merger 

Guidelines § 4.2.2 (2010). 

6The State of Michigan and Dean have entered 

into a separate settlement agreement with respect to 

school milk sales in the UP. That agreement 

includes a pricing mechanism that sets a maximum 

school milk bid price based on prices Dean charged 

for school milk during 2010. 

geographic market by facilitating 

coordination among them. The 

Acquisition will result in a substantial 

increase in the concentration of 

processors that compete to supply fluid 

milk to customers located in the 

relevant geographic market. With the 

elimination of Foremost, fluid milk 

customers in many areas of the relevant 

geographic market will have only two or 

three significant suppliers of fluid milk. 

This increased market concentration 

and the elimination of Foremost as an 

aggressive competitor make it more 

likely that Dean and its remaining 

competitors will decline to bid 

aggressively for each other’s existing 

customers to prevent retaliatory 

bidding. The practical effect of such a 

strategy likely will be to allocate 

customers based on existing supplier– 

customer relationships. 

d. Neither Supply Responses Nor Entry 

Would Prevent the Likely 

Anticompetitive Effects of the 

Acquisition in the Fluid Milk Market 

The Complaint alleges that neither 

supply responses from market 

participants nor entry would likely 

prevent the anticompetitive effects of 

the Acquisition in the fluid milk market. 

Firms not currently serving these 

markets are unlikely to enter in 

response to a small, durable price 

increase. Firms currently selling fluid 

milk into the relevant geographic market 

are unlikely to expand their sales 

sufficiently to substantially mitigate the 

loss of Foremost’s head-to-head 

competition with Dean or to disrupt 

potential coordination by Dean and its 

remaining competitors in the fluid milk 

market. 

2. School Milk 

a. School Milk Is a Relevant Product 

Market 

The Complaint alleges that school 

milk (i.e., fluid milk packaged and 

distributed for sale to school districts, 

typically in half-pint containers) is a 

relevant product market. School 

districts must provide milk in order to 

receive substantial funds under Federal 

school meal subsidy programs. Schools 

will not substitute other products for 

school milk even at substantially higher 

school milk prices because they would 

lose their Federal meal reimbursement. 

b. School Districts Constitute Relevant 

Geographic Markets 

The Complaint alleges that each 

school district in Wisconsin and the UP 

constitutes a relevant geographic 

market. A hypothetical monopolist of 

school milk could identify and 

individually target vulnerable school 

districts in Wisconsin and the UP as 

school districts solicit school milk 

contract bids directly from processors. It 

would not be feasible for an individual 

school district to defeat a price increase 

by substituting to other products or by 

engaging in arbitrage (i.e., by purchasing 

school milk from favored school 

districts). A hypothetical monopolist 

could easily detect and thwart such an 

attempt to arbitrage, and the attempt, in 

any event, would be greatly hindered by 

the significant loading and delivery 

costs incurred in reselling. Moreover, 

school districts lack the coolers 

necessary to act as arbitrageurs on a 

significant scale. Since the hypothetical 

monopolist could identify and 

individually target vulnerable school 

districts and arbitrage is infeasible, it is 

appropriate to define geographic 

markets around the locations of the 

school districts. Because sellers can 

price discriminate against individual 

school districts, it is appropriate to 

define the geographic markets as 

individual school districts.5

c. The Acquisition Will Likely 

Substantially Lessen Competition in the 

Sale of School Milk to Certain School 

Districts Located in Wisconsin and the 

Upper Peninsula of Michigan 

The Complaint alleges that the 

Acquisition will likely substantially 

lessen competition in the sale of school 

milk to school districts located in 

Wisconsin and the UP. School districts 

in Wisconsin and the UP have only a 

few choices for school milk suppliers. 

Prior to the Acquisition, Dean and 

Foremost were the two processors best 

situated to serve certain districts in 

Wisconsin and the UP. In many 

districts, the Acquisition created a 

‘‘merger to monopoly,’’ leaving Dean as 

the only likely bidder. These school 

districts include those where Dean and 

Foremost were the only two dairy 

processors to bid in recent years. There 

are also a substantial number of school 

districts in Wisconsin and the UP for 

which Dean and Foremost were two of 

only three recent or likely future 

bidders. For these school districts, the 

Acquisition represents a ‘‘merger to 

duopoly.’’ The elimination of head-tohead competition between Dean and 

Foremost will likely substantially lessen 

competition in these school milk 

markets and enable Dean to raise prices 

and/or reduce services. 

d. Entry Would Not Prevent the Likely 

Anticompetitive Effects of the 

Acquisition in the School Milk Markets 

The Complaint alleges that entry into 

school milk markets is not likely to 

prevent the anticompetitive effects of 

the Acquisition. Firms not currently 

serving school districts in Wisconsin 

and the UP are unlikely to begin to do 

so in the foreseeable future. 

III. Explanation of the Proposed Final 

Judgment 

A. Divestiture of the Waukesha Plant 

The proposed Final Judgment requires 

Dean, within 90 days after the filing of 

the proposed Final Judgment, or 5 days 

after entry of the Final Judgment by the 

Court, whichever is later, to divest the 

Waukesha plant it acquired from 

Foremost. The divestiture required by 

the proposed Final Judgment will 

establish an independent and 

economically viable competitor to Dean. 

The proposed Final Judgment is in the 

public interest because the divestiture of 

the Waukesha plant will enable the 

buyer to compete for business in an area 

that includes the vast majority of the 

population in the relevant geographic 

market. Of the De Pere and Waukesha 

plants acquired by Dean through the 

Acquisition, the Waukesha plant 

currently produces more milk, has a 

larger capacity to process milk, and is 

located closer to major population 

centers, including Chicago, Green Bay, 

and Milwaukee. Distance between 

processors and customers is an 

important consideration in fluid milk 

pricing because fluid milk has a limited 

shelf life and is costly to transport. 

These costs result in most customers 

purchasing fluid milk from nearby 

processing plants. For example, more 

than 90 percent of the milk sold to 

customers in Wisconsin and the UP 

travels less than 150 miles from the 

plant in which it was processed. Ninetytwo percent of the population of the 

relevant fluid milk geographic market is 

located within 150 miles of the 

Waukesha plant, and 80% of public 

school children in Wisconsin and the 

UP are enrolled in school districts 

within 150 miles of the Waukesha 

plant.6 The Waukesha plant currently 

serves some of the largest fluid milk 

customers in Chicago and other areas of 

the relevant geographic market. 

In addition, the Waukesha plant has 

significant excess capacity. This excess 


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capacity will allow it to serve additional 

customers of all sizes and will give the 

purchaser of the plant the incentive to 

compete aggressively for new business. 

The proposed Final Judgment requires 

Dean to divest all tangible assets that 

comprise the Waukesha plant business 

and all intangible assets used in the 

development, production, servicing, and 

sale of fluid milk and other dairy 

products for the Waukesha plant. These 

assets will give the acquirer a 

distribution network, an established 

customer base, and a brand (Golden 

Guernsey) with strong brand equity. The 

assets must be divested in such a way 

as to satisfy the United States in its sole 

discretion that the divested assets can 

and will be operated by the purchaser 

as a viable, ongoing business that can 

compete effectively in the relevant 

market. Dean must take all reasonable 

steps necessary to accomplish the 

divestiture quickly and shall cooperate 

with prospective purchasers. 

In the event that Dean does not 

accomplish the divestiture within the 

period prescribed in the proposed Final 

Judgment, the proposed Final Judgment 

provides that the Court will appoint a 

trustee selected by the United States to 

effect the divestiture. If a trustee is 

appointed, the proposed Final Judgment 

provides that Dean will pay all costs 

and expenses of the trustee. The 

trustee’s commission will be structured 

so as to provide an incentive for the 

trustee based on the price obtained and 

the speed with which the divestiture is 

accomplished. After his or her 

appointment becomes effective, the 

trustee will file monthly reports with 

the Court and the United States setting 

forth his or her efforts to accomplish the 

divestiture. At the end of six months, if 

the divestiture has not been 

accomplished, the trustee and the 

United States will make 

recommendations to the Court, which 

shall enter such orders as appropriate, 

in order to carry out the purpose of the 

trust, including extending the trust or 

the term of the trustee’s appointment. 

B. Notification of Future Acquisitions 

In addition to the divestiture of the 

Waukesha plant, the proposed Final 

Judgment requires Dean to provide 

advance notification of certain future 

acquisitions of fluid milk processing 

plants to the Antitrust Division. The 

notification provision of the proposed 

Final Judgment is intended to avoid the 

difficulties associated with remedying 

the harms of a consummated 

anticompetitive acquisition by 

permitting the United States to assess 

the competitive effects of Dean’s future 

acquisitions before the acquisitions are 

consummated, and if necessary, to seek 

to enjoin any transaction pursuant to 

Section 7. 

The proposed Final Judgment 

provides that Dean shall not directly or 

indirectly acquire any assets of or 

interest in any fluid milk processing 

plant located in the United States, 

where the value of the acquisition is $3 

million or greater, without prior 

notification to the United States. 

Transactions otherwise subject to the 

reporting and waiting period 

requirements of the HSR Act are 

excepted from the notification provision 

of the proposed Final Judgment. This 

provision will significantly broaden 

Dean’s pre-merger reporting 

requirements because the $3 million 

amount is significantly less than the 

HSR Act’s ‘‘size of the transaction’’ 

reporting threshold. 

The proposed Final Judgment requires 

that such notification shall be provided 

to the Antitrust Division in the same 

format as, and in accordance with the 

instructions relating to the Notification 

and Report Form set forth in the 

Appendix to Part 803 of Title 16 of the 

Code of Federal Regulations as 

amended, except that the information 

requested in Items 5 through 9 of the 

instructions must be provided only 

about fluid and school milk processing. 

Notification shall be provided at least 30 

calendar days prior to acquiring any 

such interest. If within the 30-day 

period after notification, representatives 

of the Antitrust Division make a written 

request for additional information, Dean 

shall not consummate the proposed 

transaction or agreement until 30 

calendar days after responding 

consistent with 15 U.S.C. 18a(e)(2). 

Early termination of the waiting periods 

in this paragraph may be requested and, 

where appropriate, granted in the same 

manner as is applicable under the 

requirements and provisions of the HSR 

Act and rules promulgated thereunder. 

IV. Remedies Available to Potential 

Private Litigants 

Section 4 of the Clayton Act, 15 

U.S.C. 15, provides that any person who 

has been injured as a result of conduct 

prohibited by the antitrust laws may 

bring suit in Federal court to recover 

three times the damages the person has 

suffered, as well as costs and reasonable 

attorneys’ fees. Entry of the proposed 

Final Judgment will neither impair nor 

assist the bringing of any private 

antitrust damage action. Under the 

provisions of Section 5(a) of the Clayton 

Act, 15 U.S.C. 16(a), the proposed Final 

Judgment has no prima facie effect in 

any subsequent private lawsuit that may 

be brought against Dean. 

V. Procedures Available for 

Modification of the Proposed Final 

Judgment 

The United States and Dean have 

stipulated that the proposed Final 

Judgment may be entered by the Court 

after compliance with the provisions of 

the APPA, provided that the United 

States has not withdrawn its consent. 

The APPA conditions entry upon the 

Court’s determination that the proposed 

Final Judgment is in the public interest. 

The APPA provides a period of at 

least 60 days preceding the effective 

date of the proposed Final Judgment 

within which any person may submit to 

the United States written comments 

regarding the proposed Final Judgment. 

Any person who wishes to comment 

should do so within 60 days of the date 

of publication of this Competitive 

Impact Statement in the Federal 

Register, or the last date of publication 

in a newspaper of the summary of this 

Competitive Impact Statement, 

whichever is later. All comments 

received during this period will be 

considered by the United States 

Department of Justice, which remains 

free to withdraw its consent to the 

proposed Final Judgment at any time 

prior to the Court’s entry of judgment. 

The comments and the response of the 

United States will be filed with the 

Court and published in the Federal 

Register. 

Written comments should be 

submitted to: 

Joshua H. Soven, Chief, Litigation I 

Section, Antitrust Division, United 

States Department of Justice, 450 Fifth 

Street, NW., Suite 4100, Washington, 

DC 20530. 

The proposed Final Judgment 

provides that the Court retains 

jurisdiction over this action, and the 

parties may apply to the Court for any 

order necessary or appropriate for the 

modification, interpretation, or 

enforcement of the Final Judgment. 

VI. Alternatives to the Proposed Final 

Judgment 

The United States considered various 

proposals for settlement offered by Dean 

that would have provided less relief 

than is contained in the proposed Final 

Judgment. Those proposals involved the 

divestiture of a single dairy with less 

capacity and a smaller service area than 

the Waukesha dairy. The United States 

determined that the divestiture of the 

Waukesha dairy was far superior given 

its location, size, and excess capacity. 

The United States also considered, as 

an alternative to the proposed Final 

Judgment, incurring the time, expense, 

and risk of a full trial on the merits in 


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7Plaintiffs have been concerned about the 

deterioration of the Foremost assets since filing the 

action. See Joint Rule 26(f) Conference Report 

(Docket No. 31, filed May 21, 2010). This settlement 

eliminates the risk of asset deterioration that would 

have occurred prior to the entry of a judgment after 

trial. 

8The 2004 amendments substituted ‘‘shall’’ for 

‘‘may’’ in directing relevant factors for a court to 

consider and amended the list of factors to focus on 

competitive considerations and to address 

potentially ambiguous judgment terms. Compare 15 

U.S.C. 16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); 

see also SBC Commc’ns, 489 F. Supp. 2d at 11 

(concluding that the 2004 amendments ‘‘effected 

minimal changes’’ to Tunney Act review). 

9Cf. BNS, 858 F.2d at 464 (holding that the 

court’s ‘‘ultimate authority under the [APPA] is 

limited to approving or disapproving the consent 

decree’’); United States v. Gillette Co., 406 F. Supp. 

713, 716 (D. Mass. 1975) (noting that, in this way, 

the court is constrained to ‘‘look at the overall 

picture not hypercritically, nor with a microscope, 

but with an artist’s reducing glass’’). See generally 

Microsoft, 56 F.3d at 1461 (discussing whether ‘‘the 

remedies [obtained in the decree are] so 

inconsonant with the allegations charged as to fall 

outside of the ‘reaches of the public interest’’’). 

order to attempt to force Dean to divest 

both of the plants that it acquired. The 

United States is concerned that the 

competitive harm from the Acquisition 

will be ongoing, and may become harder 

to remedy, as time passes.7 The 

proposed Final Judgment will provide 

immediate relief and will avoid possible 

degradation of the Waukesha plant’s 

business or the Golden Guernsey brand. 

The United States recognizes that the 

divestiture of the Waukesha plant, while 

addressing the vast majority of harm 

alleged in the Complaint, likely will 

have little effect on competition for 

fluid milk and school milk consumers 

in the northernmost section of the 

affected region. However, the proposed 

Final Judgment avoids the time, 

expense, and uncertainty of a full trial 

on the merits. Moreover, the United 

States is satisfied that the divestiture of 

the Waukesha plant described in the 

proposed Final Judgment is in the 

public interest because it will create an 

independent competitor able to compete 

for business in an area that includes the 

vast majority of the population in the 

relevant geographic market. 

VII. Standard of Review Under the 

APPA for the Proposed Final Judgment 

The Clayton Act, as amended by the 

APPA, requires that proposed consent 

judgments in antitrust cases brought by 

the United States be subject to a 60-day 

comment period, after which the court 

shall determine whether entry of the 

proposed Final Judgment ‘‘is in the 

public interest.’’ 15 U.S.C. 16(e)(1). In 

making that determination, the court, in 

accordance with the statute as amended 

in 2004, is required to consider: 

(A) The competitive impact of such 

judgment, including termination of alleged 

violations, provisions for enforcement and 

modification, duration of relief sought, 

anticipated effects of alternative remedies 

actually considered, whether its terms are 

ambiguous, and any other competitive 

considerations bearing upon the adequacy of 

such judgment that the court deems 

necessary to a determination of whether the 

consent judgment is in the public interest; 

and 

(B) the impact of entry of such judgment 

upon competition in the relevant market or 

markets, upon the public generally and 

individuals alleging specific injury from the 

violations set forth in the complaint 

including consideration of the public benefit, 

if any, to be derived from a determination of 

the issues at trial. 

15 U.S.C. 16(e)(1)(A) & (B). In 

considering these statutory factors, the 

court’s inquiry is necessarily a limited 

one as the government is entitled to 

‘‘broad discretion to settle with the 

defendant within the reaches of the 

public interest.’’ United States v. 

Microsoft Corp., 56 F.3d 1448, 1461 (DC 

Cir. 1995); see generally United States v. 

SBC Commc’ns, Inc., 489 F. Supp. 2d 1 

(D.DC 2007) (assessing public interest 

standard under the Tunney Act); United 

States v. InBev N.V./S.A., 2009–2 Trade 

Cas. (CCH) ¶ 76,736, 2009 U.S. Dist. 

LEXIS 84787, No. 08–1965 (JR), at *3, 

(D.DC Aug. 11, 2009) (noting that the 

court’s review of a consent judgment is 

limited and only inquires ‘‘into whether 

the government’s determination that the 

proposed remedies will cure the 

antitrust violations alleged in the 

complaint was reasonable, and whether 

the mechanisms to enforce the final 

judgment are clear and manageable’’).8

As the United States Court of Appeals 

for the District of Columbia Circuit has 

held, under the APPA a court considers, 

among other things, the relationship 

between the remedy secured and the 

allegations set forth in the government’s 

complaint, whether the decree is 

sufficiently clear, whether enforcement 

mechanisms are sufficient, and whether 

the decree may positively harm third 

parties. See Microsoft, 56 F.3d at 1458– 

62. With respect to the adequacy of the 

relief secured by the decree, a court may 

not ‘‘engage in an unrestricted 

evaluation of what relief would best 

serve the public.’’ United States v. BNS, 

Inc., 858 F.2d 456, 462 (9th Cir. 1988) 

(citing United States v. Bechtel Corp., 

648 F.2d 660, 666 (9th Cir. 1981)); see 

also Microsoft, 56 F.3d at 1460–62; 

United States v. Alcoa, Inc., 152 F. 

Supp. 2d 37, 40 (D.D.C. 2001); InBev, 

2009 U.S. Dist. LEXIS 84787, at *3. 

Courts have held that: 

[t]he balancing of competing social and 

political interests affected by a proposed 

antitrust consent decree must be left, in the 

first instance, to the discretion of the 

Attorney General. The court’s role in 

protecting the public interest is one of 

insuring that the government has not 

breached its duty to the public in consenting 

to the decree. The court is required to 

determine not whether a particular decree is 

the one that will best serve society, but 

whether the settlement is ‘‘within the reaches 

of the public interest.’’ More elaborate 

requirements might undermine the 

effectiveness of antitrust enforcement by 

consent decree. 

Bechtel, 648 F.2d at 666 (emphasis 

added) (citations omitted).9 In 

determining whether a proposed 

settlement is in the public interest, a 

district court ‘‘must accord deference to 

the government’s predictions about the 

efficacy of its remedies, and may not 

require that the remedies perfectly 

match the alleged violations.’’ SBC 

Commc’ns, 489 F. Supp. 2d at 17; see 

also Microsoft, 56 F.3d at 1461 (noting 

the need for courts to be ‘‘deferential to 

the government’s predictions as to the 

effect of the proposed remedies’’); 

United States v. Archer–Daniels– 

Midland Co., 272 F. Supp. 2d 1, 6 

(D.D.C. 2003) (noting that the court 

should grant due respect to the United 

States’ prediction as to the effect of 

proposed remedies, its perception of the 

market structure, and its views of the 

nature of the case). 

Courts have greater flexibility in 

approving proposed consent decrees 

than in crafting their own decrees 

following a finding of liability in a 

litigated matter. ‘‘[A] proposed decree 

must be approved even if it falls short 

of the remedy the court would impose 

on its own, as long as it falls within the 

range of acceptability or is ‘within the 

reaches of public interest.’’’ United 

States v. Am. Tel. & Tel. Co., 552 F. 

Supp. 131, 151 (D.D.C. 1982) (citations 

omitted) (quoting United States v. 

Gillette Co., 406 F. Supp. 713, 716 (D. 

Mass. 1975)), aff’d sub nom. Maryland 

v. United States, 460 U.S. 1001 (1983); 

see also United States v. Alcan 

Aluminum Ltd., 605 F. Supp. 619, 622 

(W.D. Ky. 1985) (approving the consent 

decree even though the court would 

have imposed a greater remedy). To 

meet this standard, the United States 

‘‘need only provide a factual basis for 

concluding that the settlements are 

reasonably adequate remedies for the 

alleged harms.’’ SBC Commc’ns, 489 F. 

Supp. 2d at 17. 

In its 2004 amendments, Congress 

made clear its intent to preserve the 

practical benefits of utilizing consent 

decrees in antitrust enforcement, adding 

the unambiguous instruction that 

‘‘[n]othing in this section shall be 


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10See United States v. Enova Corp., 107 F. Supp. 

2d 10, 17 (D.D.C. 2000) (noting that the ‘‘Tunney 

Act expressly allows the court to make its public 

interest determination on the basis of the 

competitive impact statement and response to 

comments alone’’); United States v. Mid-Am. 

Dairymen, Inc., 1977–1 Trade Cas. (CCH) ¶ 61,508, 

at 71,980 (W.D. Mo. 1977) (‘‘Absent a showing of 

corrupt failure of the government to discharge its 

duty, the Court, in making its public interest 

finding, should * * * carefully consider the 

explanations of the government in the competitive 

impact statement and its responses to comments in 

order to determine whether those explanations are 

reasonable under the circumstances.’’); S. Rep. No. 

93–298, 93d Cong., 1st Sess., at 6 (1973) (‘‘Where 

the public interest can be meaningfully evaluated 

simply on the basis of briefs and oral arguments, 

that is the approach that should be utilized.’’). 

construed to require the court to 

conduct an evidentiary hearing or to 

require the court to permit anyone to 

intervene.’’ 15 U.S.C. 16(e)(2). The 

language wrote into the statute what 

Congress intended when it enacted the 

Tunney Act in 1974, as Senator Tunney 

explained: ‘‘[t]he court is nowhere 

compelled to go to trial or to engage in 

extended proceedings which might have 

the effect of vitiating the benefits of 

prompt and less costly settlement 

through the consent decree process.’’ 

119 Cong. Rec. 24,598 (1973) (statement 

of Senator Tunney). Rather, the 

procedure for the public interest 

determination is left to the discretion of 

the court, with the recognition that the 

court’s ‘‘scope of review remains sharply 

proscribed by precedent and the nature 

of Tunney Act proceedings.’’ SBC 

Commc’ns, 489 F. Supp. 2d at 11.10

VIII. Determinative Documents 

There are no determinative materials 

or documents within the meaning of the 

APPA that were considered by the 

United States in formulating the 

proposed Final Judgment. 

Dated: March 29, 2011. 

Respectfully submitted, 

s/ Mitchell H. Glende, 

Jon B. Jacobs, 

Karl D. Knutsen, 

Ryan M. Kantor, 

Mitchell H. Glende, 

Paul J. Torzilli, 

United States Department of Justice, 

Antitrust Division, 450 Fifth St., NW., Suite 

4100, Washington, DC 20530, Telephone: 

(202) 514–5012, E-mail: jon.jacobs

@usdoj.gov. 

s/ Gregory J. Haanstad, 

for James L. Santelle, 

James L. Santelle, 

United States Attorney. 

Susan M. Knepel, 

Assistant United States Attorney, State Bar 

Number: 1016482, 530 Federal Courthouse, 

517 E. Wisconsin Avenue, Milwaukee, WI 

53202, Telephone: (414) 297–1700, E-mail: 

susan.knepel@usdoj.gov. 

United States District Court for the 

Eastern District of Wisconsin Milwaukee 

Division 

United States of America, State of 

Wisconsin, State of Illinois, and) State 

of Michigan, Civil Action No. 2:10-cv00059 (JPS) Plaintiffs, 

v. 

Dean Foods Company, Defendant. 

[Proposed] Final Judgment 

Whereas, Plaintiffs filed their 

Complaint on January 22, 2010, and 

Plaintiffs and Defendant, by their 

respective attorneys, have consented to 

the entry of this Final Judgment without 

trial of any issue of fact or law, and 

without this Final Judgment 

constituting any evidence against or 

admission by any party regarding any 

issue of fact or law; 

And Whereas, Defendant agrees to be 

bound by the provisions of this Final 

Judgment pending its approval by the 

Court; 

And Whereas, the essence of this 

Final Judgment is the prompt and 

certain divestiture of certain rights or 

assets by Defendant to assure that 

competition is not substantially 

lessened; 

And Whereas, Plaintiffs require 

Defendant to make certain divestitures 

for the purpose of remedying the loss of 

competition alleged in the Complaint; 

And Whereas, Defendant has 

represented to Plaintiffs that the 

divestitures required below can and will 

be made and that Defendant will later 

raise no claim of hardship or difficulty 

as grounds for asking the Court to 

modify any of the divestiture provisions 

contained below; 

Now Therefore, before any testimony 

is taken, without trial of any issue of 

fact or law, and upon consent of the 

parties, it is Ordered, Adjudged and 

Decreed: 

I. Jurisdiction 

This Court has jurisdiction over the 

subject matter of and each of the parties 

to this action. The Complaint states 

claims upon which relief may be 

granted against Defendant under Section 

7 of the Clayton Act, as amended (15 

U.S.C. 18). 

II. Definitions 

As used in this Final Judgment: 

(A) ‘‘Acquirer’’ means the person or 

entity to whom Defendant divests the 

Divestiture Assets. 

(B) ‘‘Dean Foods’’ means Defendant 

Dean Foods Company, a Delaware 

corporation with its headquarters in 

Dallas, Texas, its successors and assigns, 

and its subsidiaries, divisions, groups, 

affiliates, partnerships and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

(C) ‘‘Divestiture Assets’’ means the 

Waukesha Plant, as defined below, and 

all related assets for the Waukesha Plant 

(except for those specified in Section 

II(C)(3) below), including: 

(1) All tangible assets that comprise 

the Waukesha Plant business, including 

all property and contract rights, research 

and development activities; all 

manufacturing equipment, tooling and 

fixed assets, personal property, 

inventory, office furniture, materials, 

supplies, vehicles and other rolling 

stock, and other tangible property and 

all assets used in connection with the 

plant; all licenses, permits and 

authorizations issued by any 

governmental organization relating to 

the plant; all contracts, teaming 

arrangements, agreements, leases, 

commitments, certifications, and 

understandings, relating to the plant, 

including agreements with suppliers 

and with distributors; all customer lists 

and related customer information, 

contracts, accounts (including accounts 

receivable), and credit records; and all 

repair and performance records and all 

other records relating to the plant; and 

(2) All intangible assets used in the 

development, production, servicing, and 

sale of Fluid Milk and other dairy 

products for the Waukesha Plant, 

including, but not limited to, all patents, 

licenses and sublicenses, copyrights, 

trademarks, trade names (including the 

Golden Guernsey and La Vaca Bonita 

brands and all related materials), service 

marks, service names, and other 

intellectual property; technical 

information, computer software and 

related documentation; know-how and 

recipes; trade secrets; drawings, 

blueprints, designs, design protocols, 

specifications for materials, 

specifications for parts and devices, 

safety procedures for the handling of 

materials and substances; quality 

assurance and control procedures; 

design tools and simulation capability; 

all manuals and technical information 

Defendant provides to its own 

employees, customers, suppliers, agents, 

or licensees; and all research data 

concerning historic and current research 

and development efforts relating to the 

Divestiture Assets, including, but not 

limited to, designs of experiments, and 

the results of successful and 

unsuccessful designs and experiments. 

(3) The term ‘‘Divestiture Assets’’ does 

not include: (a) The right to purchase 

raw milk from Foremost Farms USA 

Cooperative for processing at the 

Waukesha Plant obtained under the 

Milk Supply Agreement entered into on 

April 1, 2009 between Foremost Farms 


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USA Cooperative and GG Acquisition, 

LLC; (b) any ice cream mix filler 

equipment used at the Waukesha Plant 

or any other equipment at that Plant 

dedicated solely to the manufacturing of 

ice cream mix; or (c) the Dean and Farm 

Fresh brands and all related materials. 

(D) ‘‘Fluid Milk’’ means raw milk that 

has been processed for human 

consumption as a beverage, but does not 

include organic milk, soy milk, 

extended shelf life milk, ultra-high 

temperature milk, or aseptic milk. 

(E) ‘‘Plaintiff States’’ means the States 

of Wisconsin, Illinois, and Michigan. 

(F) ‘‘School Milk’’ means Fluid Milk 

produced, marketed, distributed, or sold 

for use by schools. 

(G) ‘‘Waukesha Plant’’ means 

Defendant’s dairy processing plant 

located at 2101 Delafield Street, 

Waukesha, Wisconsin 53188–2299. 

III. Applicability 

(A) This Final Judgment applies to 

Dean Foods, as defined above, and all 

other persons in active concert or 

participation with Dean Foods who 

receive actual notice of this Final 

Judgment by personal service or 

otherwise. 

(B) If, prior to complying with Section 

IV or V of this Final Judgment, 

Defendant sells or otherwise disposes of 

all or substantially all of its assets or of 

lesser business units that include the 

Divestiture Assets, it shall require the 

purchaser to be bound by the provisions 

of this Final Judgment. Defendant does 

not need to obtain such an agreement 

from the Acquirer of the assets divested 

pursuant to this Final Judgment. 

IV. Divestitures 

(A) Defendant is ordered and directed, 

within ninety (90) calendar days after 

the filing of the Proposed Final 

Judgment or five (5) calendar days after 

entry of this Final Judgment by the 

Court, whichever is later, to divest the 

Divestiture Assets in a manner 

consistent with this Final Judgment to 

an Acquirer acceptable to the United 

States in its sole discretion, after 

consultation with the Plaintiff States. 

The United States in its sole discretion, 

after consultation with the Plaintiff 

States, may agree to one or more 

extensions of this time period not to 

exceed thirty (30) calendar days in total, 

and shall notify the Court in such 

circumstances. Defendant agrees to use 

its best efforts to divest the Divestiture 

Assets as expeditiously as possible. 

(B) In accomplishing the divestiture 

ordered by this Final Judgment, 

Defendant promptly shall make known, 

by usual and customary means, the 

availability of the Divestiture Assets. 

Defendant shall inform any person 

making inquiry regarding a possible 

purchase of the Divestiture Assets that 

they are being divested pursuant to this 

Final Judgment and provide that person 

with a copy of this Final Judgment. 

Defendant shall offer to furnish to all 

prospective Acquirers, subject to 

customary confidentiality assurances, 

all information and documents relating 

to the Divestiture Assets customarily 

provided in a due diligence process 

except such information or documents 

subject to the attorney-client privilege or 

work-product doctrine. Defendant shall 

make available such information to 

Plaintiffs at the same time that such 

information is made available to any 

other person. 

(C) Defendant shall provide the 

Acquirer and Plaintiffs with information 

relating to the personnel involved in the 

operation and sale of the Divestiture 

Assets to enable the Acquirer to make 

offers of employment. Defendant will 

not interfere with any negotiations by 

the Acquirer to employ any Defendant 

employee whose primary responsibility 

relates to the Divestiture Assets. 

(D) Defendant shall permit 

prospective Acquirers of the Divestiture 

Assets to have reasonable (1) access to 

personnel and to make inspections of 

the physical facilities of the Waukesha 

Plant; (2) access to any and all 

environmental, zoning, and other permit 

documents and information; and (3) 

access to any and all financial, 

operational, or other documents and 

information customarily provided as 

part of a due diligence process. 

(E) Defendant shall warrant to the 

Acquirer that the Divestiture Assets will 

be operational on the date of sale. 

(F) Defendant shall not take any 

action that will impede in any way the 

permitting, operation, or divestiture of 

the Divestiture Assets. 

(G) Defendant shall warrant to the 

Acquirer that there are no material 

defects in the environmental, zoning, or 

other permits pertaining to the 

operation of each asset, and that 

following the sale of the Divestiture 

Assets, Defendant will not undertake, 

directly or indirectly, any challenges to 

the environmental, zoning, or other 

permits relating to the operation of the 

Divestiture Assets. 

(H) Unless the United States in its 

sole discretion, after consultation with 

the Plaintiff States, otherwise consents 

in writing, the divestiture pursuant to 

Section IV, or by trustee appointed 

pursuant to Section V of this Final 

Judgment, shall include the entire 

Divestiture Assets, and shall be 

accomplished in such a way as to satisfy 

the United States in its sole discretion, 

after consultation with the Plaintiff 

States, that the Divestiture Assets can 

and will be used by the Acquirer as part 

of viable, ongoing Fluid Milk and 

School Milk processing businesses. The 

divestitures, whether pursuant to 

Section IV or Section V of this Final 

Judgment: 

(1) Shall be made to an Acquirer that, 

in the sole judgment of the United 

States, after consultation with the 

Plaintiff States, has the intent and 

capability (including the necessary 

managerial, operational, technical, and 

financial capability) of competing 

effectively in the sale of Fluid Milk and 

School Milk; and 

(2) shall be accomplished so as to 

satisfy the United States in its sole 

discretion, after consultation with the 

Plaintiff States, that none of the terms of 

any agreement between an Acquirer and 

Defendant give Defendant the ability 

unreasonably to raise the Acquirer’s 

costs, to lower the Acquirer’s efficiency, 

or otherwise to interfere in the ability of 

the Acquirer to compete effectively. 

V. Appointment of Trustee 

(A) If Defendant has not divested the 

Divestiture Assets within the time 

period specified in Section IV(A), 

Defendant shall notify Plaintiffs of that 

fact in writing. Upon application of the 

United States in its sole discretion, after 

consultation with the Plaintiff States, 

the Court shall appoint a trustee 

selected by the United States, after 

consultation with the Plaintiff States, 

and approved by the Court to effect the 

divestiture of the Divestiture Assets. 

(B) After the appointment of a trustee 

becomes effective, only the trustee shall 

have the right to sell the Divestiture 

Assets. The trustee shall have the power 

and authority to accomplish the 

divestiture to an Acquirer acceptable to 

the United States in its sole discretion, 

after consultation with the Plaintiff 

States, at such price and on such terms 

as are then obtainable upon reasonable 

effort by the trustee, subject to the 

provisions of Sections IV, V, and VI of 

this Final Judgment, and shall have 

such other powers as this Court deems 

appropriate. Subject to Section V(D) of 

this Final Judgment, the trustee may 

hire at the cost and expense of 

Defendant any investment bankers, 

attorneys, or other agents, who shall be 

solely accountable to the trustee, 

reasonably necessary in the trustee’s 

judgment to assist in the divestiture. 

(C) Defendant shall not object to a sale 

by the trustee on any ground other than 

the trustee’s malfeasance. Any such 

objections by Defendant must be 

conveyed in writing to Plaintiffs and the 

trustee within ten (10) calendar days 


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after the trustee has provided the notice 

required under Section VI. 

(D) The trustee shall serve at the cost 

and expense of Defendant, on such 

terms and conditions as the United 

States in its sole discretion, after 

consultation with the Plaintiff States, 

approves, and shall account for all 

monies derived from the sale of the 

assets sold by the trustee and all costs 

and expenses so incurred. After 

approval by the Court of the trustee’s 

accounting, including fees for its 

services and those of any professionals 

and agents retained by the trustee, all 

remaining money shall be paid to 

Defendant and the trust shall then be 

terminated. The compensation of the 

trustee and any professionals and agents 

retained by the trustee shall be 

reasonable in light of the value of the 

Divestiture Assets and based on a fee 

arrangement providing the trustee with 

an incentive based on the price and 

terms of the divestiture and the speed 

with which it is accomplished, but 

timeliness is paramount. 

(E) Defendant shall use its best efforts 

to assist the trustee in accomplishing 

the required divestiture. The trustee and 

any consultants, accountants, attorneys, 

and other persons retained by the 

trustee shall have full and complete 

access to the personnel, books, records, 

and facilities of the business to be 

divested, and Defendant shall develop 

financial and other information relevant 

to such business as the trustee may 

reasonably request, subject to reasonable 

protection for trade secret or other 

confidential research, development, or 

commercial information. Defendant 

shall take no action to interfere with or 

to impede the trustee’s accomplishment 

of the divestiture. 

(F) After its appointment, the trustee 

shall file monthly reports with Plaintiffs 

and the Court setting forth the trustee’s 

efforts to accomplish the divestiture 

ordered under this Final Judgment. To 

the extent such reports contain 

information that the trustee deems 

confidential, such reports shall not be 

filed in the public docket of the Court. 

Such reports shall include the name, 

address, and telephone number of each 

person who, during the preceding 

month, made an offer to acquire, 

expressed an interest in acquiring, 

entered into negotiations to acquire, or 

was contacted or made an inquiry about 

acquiring, any interest in the Divestiture 

Assets, and shall describe in detail each 

contact with any such person. The 

trustee shall maintain full records of all 

efforts made to divest the Divestiture 

Assets. 

(G) If the trustee has not 

accomplished the divestiture ordered 

under this Final Judgment within six (6) 

months after its appointment, the 

trustee shall promptly file with the 

Court a report setting forth (1) the 

trustee’s efforts to accomplish the 

required divestiture, (2) the reasons, in 

the trustee’s judgment, why the required 

divestiture has not been accomplished, 

and (3) the trustee’s recommendations. 

To the extent the report contains 

information that the trustee deems 

confidential, the report shall not be filed 

in the public docket of the Court. The 

trustee shall at the same time furnish 

such report to Plaintiffs, which shall 

have the right to make additional 

recommendations consistent with the 

purpose of the trust. The Court 

thereafter shall enter such orders as it 

shall deem appropriate to carry out the 

purpose of the Final Judgment, which 

may, if necessary, include extending the 

trust and the term of the trustee’s 

appointment by a period requested by 

the United States in its sole discretion, 

after consultation with the Plaintiff 

States. 

VI. Notice of Proposed Divestiture 

(A) Within two (2) business days 

following execution of a definitive 

divestiture agreement, Defendant or the 

trustee, whichever is then responsible 

for effecting the divestiture required 

herein, shall notify Plaintiffs of any 

proposed divestiture required by 

Section IV or V of this Final Judgment. 

If the trustee is responsible, it shall 

similarly notify Defendant. The notice 

shall set forth the details of the 

proposed divestiture and list the name, 

address, and telephone number of each 

person not previously identified who 

offered or expressed an interest in or 

desire to acquire any ownership interest 

in the Divestiture Assets, together with 

full details of the same. 

(B) Within fifteen (15) calendar days 

of receipt by Plaintiffs of such notice, 

the United States, after consultation 

with the Plaintiff States, may request 

from Defendant, the proposed Acquirer, 

any other third party, or the trustee, if 

applicable, additional information 

concerning the proposed divestiture, the 

proposed Acquirer, and any other 

potential Acquirer. Defendant and the 

trustee shall furnish to the United 

States, which will share that 

information with the Plaintiff States 

upon any Plaintiff State’s request, any 

additional information requested within 

fifteen (15) calendar days of the receipt 

of the request, unless the parties shall 

otherwise agree. 

(C) Within thirty (30) calendar days 

after receipt of the notice or within 

twenty (20) calendar days after the 

United States has been provided the 

additional information requested from 

Defendant, the proposed Acquirer, any 

third party, and the trustee, whichever 

is later, the United States in its sole 

discretion, after consultation with the 

Plaintiff States, shall provide written 

notice to Defendant and the trustee, if 

there is one, stating whether or not it 

objects to the proposed divestiture. If 

the United States provides written 

notice that it does not object, the 

divestiture may be consummated, 

subject only to Defendant’s limited right 

to object to the sale under Section V(C) 

of this Final Judgment. Absent written 

notice that the United States does not 

object to the proposed Acquirer or upon 

objection by the United States, a 

divestiture proposed under Section IV 

or Section V shall not be consummated. 

Upon objection by Defendant under 

Section V(C), a divestiture proposed 

under Section V shall not be 

consummated unless approved by the 

Court. 

VII. Financing 

Defendant shall not finance all or any 

part of any purchase made pursuant to 

Section IV or V of this Final Judgment. 

VIII. Asset Preservation 

Until the divestiture required by this 

Final Judgment has been accomplished, 

Defendant shall take all steps necessary 

to comply with the Asset Preservation 

Stipulation and Order entered by this 

Court. Defendant shall take no action 

that would jeopardize the divestiture 

ordered by this Court. 

IX. Affidavits 

(A) Within twenty (20) calendar days 

of the filing of the Proposed Final 

Judgment in this matter, and every 

thirty (30) calendar days thereafter until 

the divestiture has been completed 

under Section IV or V, Defendant shall 

deliver to Plaintiffs an affidavit as to the 

fact and manner of its compliance with 

Section IV or V of this Final Judgment. 

Each such affidavit shall include the 

name, address, and telephone number of 

each person who, during the preceding 

thirty (30) calendar days, made an offer 

to acquire, expressed an interest in 

acquiring, entered into negotiations to 

acquire, or was contacted or made an 

inquiry about acquiring, any interest in 

the Divestiture Assets, and shall 

describe in detail each contact with any 

such person during that period. Each 

such affidavit shall also include a 

description of the efforts Defendant has 

taken to solicit buyers for the 

Divestiture Assets and to provide 

required information to prospective 

Acquirers, including the limitations, if 

any, on such information. Provided that 


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18796 Federal Register / Vol. 76, No. 65 / Tuesday, April 5, 2011 / Notices 

the information set forth in the affidavit 

is true and complete, any objection by 

the United States in its sole discretion, 

after consultation with the Plaintiff 

States, to information provided by 

Defendant, including any limitation on 

information, shall be made within 

fourteen (14) calendar days of receipt of 

such affidavit. 

(B) Defendant shall keep all records of 

all efforts made to preserve and divest 

the Divestiture Assets until one year 

after such divestiture has been 

completed. 

X. Compliance Inspection 

(A) For the purposes of determining 

or securing compliance with this Final 

Judgment, or of determining whether 

the Final Judgment should be modified 

or vacated, and subject to any legally 

recognized privilege, from time to time 

authorized representatives of the United 

States, including consultants and other 

persons retained by the United States, 

shall, upon written request of an 

authorized representative of the 

Assistant Attorney General in charge of 

the Antitrust Division, and on 

reasonable notice to Defendant, be 

permitted: 

(1) Access during Defendant’s office 

hours to inspect and copy, or at the 

option of the United States, to require 

Defendant to provide hard copy or 

electronic copies of, all books, ledgers, 

accounts, records, data, and documents 

in the possession, custody, or control of 

Defendant, relating to any matters 

contained in this Final Judgment; and 

(2) to interview, either informally or 

on the record, Defendant’s officers, 

employees, or agents, who may have 

their individual counsel present, 

regarding such matters. The interviews 

shall be subject to the reasonable 

convenience of the interviewee and 

without restraint or interference by 

Defendant. 

(B) Upon the written request of an 

authorized representative of the 

Assistant Attorney General in charge of 

the Antitrust Division, Defendant shall 

submit written reports or responses to 

written interrogatories, under oath if 

requested, relating to any of the matters 

contained in this Final Judgment as may 

be requested. 

(C) If at the time information or 

documents are furnished by Defendant 

to the United States, Defendant 

represents and identifies in writing the 

material in any such information or 

documents to which a claim of 

protection may be asserted under Rule 

26(c)(1)(G) of the Federal Rules of Civil 

Procedure, and Defendant marks each 

pertinent page of such material, ‘‘Subject 

to claim of protection under Rule 

26(c)(1)(G) of the Federal Rules of Civil 

Procedure,’’ then the United States shall 

give Defendant ten (10) calendar days 

notice prior to divulging such material 

in any legal proceeding (other than a 

grand jury proceeding). 

(D) The United States may share 

information or documents obtained 

under Section X with the Plaintiff 

States. 

XI. Treatment of Confidential 

Information 

No information or documents 

obtained by the means provided in this 

Final Judgment shall be divulged by the 

United States or the Attorney General of 

Wisconsin, Illinois, or Michigan to any 

person other than an authorized 

representative of the executive branch of 

the United States, except in the course 

of legal proceedings to which the United 

States or the Attorney General of 

Wisconsin, Illinois, or Michigan is a 

party (including grand jury 

proceedings), or for the purpose of 

securing compliance with this Final 

Judgment, or as otherwise required by 

law. 

XII. Notification of Future Transactions 

Unless such transaction is otherwise 

subject to the reporting and waiting 

period requirements of the Hart-ScottRodino Antitrust Improvements Act of 

1976, as amended, 15 U.S.C. 18a (the 

‘‘HSR Act’’), Defendant, without 

providing advance notification to the 

Antitrust Division and to any Plaintiff 

State in which any of the assets or 

interests are located or whose border is 

less than 150 miles from any such assets 

or interests, shall not directly or 

indirectly acquire any assets of or 

interest, including any financial, 

security, loan, equity or management 

interest, in any Fluid Milk processing 

plant located in the United States, 

where the value of the acquisition is $3 

million or greater. 

Such notification shall be provided to 

the Antitrust Division in the same 

format as, and per the instructions 

relating to the Notification and Report 

Form set forth in the Appendix to Part 

803 of Title 16 of the Code of Federal 

Regulations as amended, except that the 

information requested in Items 5 

through 9 of the instructions must be 

provided only about Fluid Milk and 

School Milk processing. Notification 

shall be provided at least thirty (30) 

calendar days prior to acquiring any 

such interest. Within the 30-day period 

after notification, representatives of the 

Antitrust Division may make a written 

request for additional information or 

documentary material relevant to the 

proposed acquisition as though 15 

U.S.C. 18a(e) were applicable (‘‘Second 

Request’’). In the event of a Second 

Request, Defendant shall not 

consummate the proposed transaction 

or agreement until thirty (30) calendar 

days after responding consistent with 15 

U.S.C. 18a(e)(2). Early termination of the 

waiting periods in this paragraph may 

be requested and, where appropriate, 

granted in the same manner as is 

applicable under the requirements and 

provisions of the HSR Act and rules 

promulgated thereunder. 

All references to the HSR Act in the 

proposed Final Judgment refer to the 

HSR Act as it exists at the time of the 

transaction or agreement and 

incorporate any subsequent 

amendments to the Act. 

XIII. No Reacquisition 

Defendant shall not reacquire any part 

of the Divestiture Assets during the term 

of this Final Judgment. 

XIV. Retention of Jurisdiction 

This Court retains jurisdiction to 

enable any party to this Final Judgment 

to apply to this Court at any time for 

further orders and directions as may be 

necessary or appropriate to carry out or 

construe this Final Judgment, to modify 

any of its provisions, to enforce 

compliance, and to punish violations of 

its provisions. 

XV. Expiration of Final Judgment 

Unless this Court grants an extension, 

this Final Judgment shall expire ten (10) 

years from the date of its entry. 

XVI. Public Interest Determination 

The parties have complied with the 

requirements of the Antitrust 

Procedures and Penalties Act, 15 U.S.C. 

16, including making copies available to 

the public of this Final Judgment, the 

Competitive Impact Statement, and any 

comments thereon and the United 

States’s responses to those comments. 

Based upon the record before the Court, 

which includes the Competitive Impact 

Statement and any comments and 

response to comments filed with the 

Court, entry of this Final Judgment is in 

the public interest. 

Court approval subject to procedures 

of Antitrust Procedures and Penalties 

Act, 15 U.S.C. 16. 

Dated at Milwaukee, Wisconsin, this llth 

day of ll, 2011. 

By the Court: 

lllllllllllllllllllll

J.P. Stadtmueller, 

U.S. District Judge. 

[FR Doc. 2011–7938 Filed 4–04–11; 8:45 am] 

BILLING CODE 4410–11–P 


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