Leahy Voices Anti-Competition Concerns As Texas Milk Producer Consumes Growing Share Of New England Milk Markets

February 14, 2000

WASHINGTON (Feb. 14) – Sen. Patrick Leahy, in a letter to the U.S. Justice Department's top antitrust leader, expressed concern about the growing consolidation in the dairy industry, especially recent news that one handler now processes more than 70 percent of New England's milk supply.

Leahy, the Democratic Leader of the Senate Judiciary Committee, today wrote to Joel Klein, the Assistant Attorney General in charge of antitrust matters, about Texas-based Suiza Foods, now the nation's largest dairy operator. In his letter, Leahy notes that the recent spate of aquisitions -- and subsequent closing of processing capabilities like ones in Connecticut and Rhode Island -- by Suiza Foods "could represent a serious threat to the economic livelihood of many farmers in the New England region."

"The increasing rate of consolidation in the dairy industry is an alarming trend for farmers and consumers alike," said Leahy, also a senior member of the Senate Agriculture, Nutrition and Forestry Committee. "For farmers in Vermont and across the country to survive, there must be a minimum level of processors for farmers to sell their product to. We must keep a close eye on this trend -- power concentrated in fewer and fewer handlers only reduces the clout of farmers to win a fair price for their product. Moving processing plants out of the New England region simply to evade the dairy compact's pricing premium is no way to win customers or business partners."

Most recently, Garelick Farms, owned by Suiza Foods, has contracted with Stop & Shop Supermarkets to process the milk for their stores. The milk sold to Stop & Shop had comprised 30 percent of the St. Albans Cooperative Creamery's annual sales.

Leahy also noted that he was readying a comprehensive agriculture anti-trust bill for introduction soon that would, among other provisions, create a new office within the Justice Department for agriculture antitrust matters; increase monetary penalties for violations of existing antitrust laws; strengthen existing laws barring discriminatory or deceptive business practices; and, with fines collected from violations of existing antitrust law, create a new government account to compensate farmers harmed by these unfair practices.