The U.S. Department of Justice, Antitrust Division (DOJ) and the U.S. Department of Agriculture (USDA) recently completed a series of public workshops exploring competition issues in agriculture, including in the dairy sector. In her concluding remarks at the final public workshop, Christine Varney, Assistant Attorney General for the Antitrust Division, provided a clear indication of increasing federal antitrust enforcement efforts:

The Antitrust Division emerges from these workshops better equipped to ensure that our nation’s farmers, processors, and consumers reap the benefits of competitive agricultural markets. It is our role to enforce the antitrust laws and advocate for competition in the agricultural sector, and the stories we heard at the workshops confirmed the importance of these efforts. . . . The knowledge we gained at the workshops will aid us in identifying and prosecuting conduct that violates the antitrust laws, and enforcement in the agricultural sector remains a priority.

Varney also announced the establishment of a task force made up of members of the USDA and DOJ to look at issues of competition affecting agriculture. The task force is likely to deal with issues facing the dairy industry. The following factors have created an environment expected to lead to increased federal enforcement efforts: (1) the plight of dairy farmers that was expressed throughout the workshops; (2) ongoing high-profile litigation concerning dairy producers, initiated by both the DOJ and private parties; and (3) continuing consolidation on all industry levels (producer, processor, and retailer). That enforcement can encompass both price fixing and market division under Section 1 of the Sherman Act, 15 U.S.C. § 1, and monopolization under Section 7 of the Clayton Act, 15 U.S.C. § 14.

Challenges Facing Dairy Farmers

The economic plight of dairy farmers in the past several years was a much discussed topic at the workshops. Historically low milk prices, high feed costs, market price volatility, and diminishing margins have allegedly squeezed dairy farmers to a breaking point.

Download to read the full article, Price Fixing and Enforcement of the Antitrust Laws in the Dairy Industry.

© 2011 Bloomberg Finance L.P. All rights reserved. Originally published by Bloomberg Finance L.P. in the Vol. 4, No. 2 edition of the Bloomberg Law Reports—Director & Officer Liability. Reprinted with permission. Bloomberg Law Reports® is a registered trademark and service mark of Bloomberg Finance L.P.

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