Suiza Settles Antitrust Case

June 26, 2001

Suiza Foods Corporation, a major dairy processor, has settled an antitrust investigation conducted by the attorneys general of the states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. The investigation, which began in March 2000, developed in connection with a long- term supply agreement between Suiza and The Stop & Shop Supermarket Company and an agreement to sell certain of Stop & Shop's dairy processing assets to Suiza.

The settlement requires Stop & Shop to sell its dairy processing assets at its Readville, MA, plant to a party other than Suiza. Suiza also agreed to make certain processing capacity available to other New England processors for a five-year period and provide advance notice to the attorneys general of future acquisitions or plant closures in New England.

However, the company maintains the settlement "preserves intact the existing long-term supply agreement enabling Suiza to continue to provide dairy products to all of Stop & Shop's stores in New England."

Michelle Goolsby, Suiza's executive vice president and general counsel, said the settlement "will allow us to continue our normal business activities throughout New England. We will continue to be able to provide New England dairy farmers with consistent and reliable market access for their raw milk. We will also continue to be able to operate all of our New England assets, which allows us to continue to serve our valued customers and ensure high quality, competitively priced milk products for New England consumers."

In Washington, Sen. Patrick Leahy (D-VT) said in March 2000 he contacted the New England attorneys general, suggesting their "close attention to the growing market concentration of Texas-based Suiza, which today controls more than 80% of the fluid milk market in parts of Massachusetts and nearly 70% of New England's milk supply."

On Feb. 14, 2000, Leahy also contacted U.S. Department of Justice Antitrust Division chief Joel Klein with the same request. Leahy again raised the issue in the confirmation hearings this year for Attorney General John Ashcroft and for Klein's successor, Charles James. Leahy, who now chairs the Senate Judiciary Committee which has jurisdiction over the Justice Department, also has written a bill, with Sen. Tom Daschle (D-SD) and others, that would address the growing concentration in U.S. agriculture, with greater antitrust enforcement.

"This is not just a New England problem," Leahy said in a statement, "it is a national problem, and there are limits on how much one state, or even several states, can do to stem this kind of market onslaught. I will continue to press those who oversee enforcement of our national antitrust laws to closely monitor the growing market dominance of big dairy processors like Suiza."