The Dairy Industry's $9.5 Billion Price-Fixing Scheme
National Milk Producers Federation and Other Dairy Industry Groups Accused of Antitrust Violations
Class-action complaint alleges an industry-wide scheme to raise the price of milk by killing over 500,000 young cows.
On Monday, Sept. 26, 2011 several dairy consumers, including members of Compassion Over Killing (COK), filed a class action lawsuit on behalf of consumers alleging that various dairy companies and trade groups—including the National Milk Producers Federation, Dairy Farmers of America, and Land O’Lakes—combined to form Cooperatives Working Together (CWT) in order to engage in a price fixing scheme that inflated the price of milk.
According to the complaint, this scheme has so far resulted in over $9.5 billion of unfairly and illegally obtained profits.
COK’s Legal Research: Case Background
Cooperatives Working Together (CWT) is a national dairy industry trade group developed by the National Milk Producers Federation (NMPF) to, according to its website, “strengthen and stabilize milk prices.” CWT is funded by NMPF, Dairy Farmers of America, Land O’Lakes and others in the dairy industry, and its members collectively produce and sell more than 70% of the milk consumed in the U.S. The lawsuit claims that, through CWT, the defendants carried out a price-fixing plot that effectively raised the price of milk through tactics that will likely continue to affect the price of milk for years to come.
As the facts in the case set forth, between 2003 and 2010, more than 500,000 young cows were slaughtered under CWT’s so-called “dairy herd retirement” program in a concerted effort to reduce the supply of milk and thus inflate the price. The complaint further alleges that the program, which primarily bought out smaller farmers and instructed them to kill their entire dairy cow herds, unfairly increased the profits of agribusiness giants.
CWT’s own economic analysis not only boasts about the program’s effects on the industry but confirms that milk prices did in fact increase as a result of its efforts — to the tune of $9.5 billion in additional revenue. See chart for details.
COK’s research into CWT’s “dairy herd retirement” program led to the discovery of a possibly illegal price-fixing scheme that is killing cows, cheating consumers, and lining the pockets of agribusiness giants. COK’s legal department conducted the initial research and development of the case, and the plaintiffs are represented by leading class-action law firm Hagens Berman Sobol Shapiro, LLP.
Hagens Berman is interested in speaking to consumers who purchased milk or milk products from 2004 to the present. Consumers can contact the firm by calling (206) 623-7292 or by emailing CWT@hbsslaw.com. Visit HBSSLaw.com/CWT for more details.
Additionally, COK is releasing video footage and photos offering a glimpse inside California dairy factory farms. This video sheds light on the realities of today’s dairy factory farms, including crowded dirt lots filled with long lines of cows, calves kept in filthy, barren, fly-infested conditions, and animals being treated as mere milk-producing machines. As this video demonstrates, conditions on today’s dairy farms are a far cry from the happy cow imagery the industry would like us to believe.
One of the most effective steps we can take to protect farmed animals is simply to choose meat-, egg-, and dairy-free foods. Learn more about the painful realities kept hidden behind the closed doors of factory farms and discover delicious animal-friendly foods by visiting TryVeg.com.
Price-Fixing: Beyond the Dairy Industry
This lawsuit is not the first time animal agribusiness has been accused of antitrust violations. In 2010, Land O’Lakes agreed to pay $25 million to settle a class action lawsuit filed against the United Egg Producers and its members for allegedly engaging in a price fixing scheme. That case alleges egg producers were encouraged to reduce their flock size—to reduce egg supply and inflate prices—as part of a program that was disguised as an animal welfare initiative based on the use of a misleading label on egg cartons. Land O’Lakes is also a defendant in this class-action lawsuit.