This spin-off will preserve competition, which is especially important in markets like this one, where there has been a history of collusion that has hurt consumers. In several of the markets affected, the bidding process previously was subject to bid rigging collusion by competing dairies, the Department said. In the past, the Department has charged the two companies with participating in conspiracies to rig bids on contracts to supply milk and other dairy products to public schools.
School districts purchase milk in half-pint containers.
They have specific delivery and service requirements and use dairies with distribution systems in the district to service them. Contracts are typically awarded each year after a formal bidding process. The Department said that, due to the importance of the distribution system, the divesting of these routes to Valley Rich Dairy of Roanoke, Virginia, will assure that competition is maintained in the school districts. It sells and distributes its fluid milk and other products to a variety of customers, including school districts.