Lactalis can Officially Buy Kraft Heinz Co.'s Cheese Business, But With Conditions

When the the Lactalis American Group Inc. set out to purchase the Kraft Heinz Cheese business last year, the transaction seemed simple. For $3.2 billion, Kraft would sell the U.S. unit of the French-based Lactalis Group its natural, grated, cultured and specialty cheese businesses in the U.S., grated cheese business in Canada and its entire international cheese business.

The Justice Department had other things to say about the matter, specifically as they related to antitrust laws. A year after announcing the agreement, Kraft Heinz can finally sell its its cheese business, but only if it sells its Athenos (feta) and Polly-O (ricotta) businesses as well. 

“This transaction, as originally proposed, would have led to higher-priced and lower-quality feta and ricotta, two popular cheeses that American consumers regularly purchase to feed their families," said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. 

Lactalis American Group Inc. and Kraft Heinz are the two largest suppliers of feta cheese to U.S. retailers. They also are two of the largest suppliers of ricotta cheese to numerous retail outlets in New York City, Miami/Ft. Lauderdale, Tampa/St. Petersburg, Orlando and Jacksonville. As part of the settlement, Kraft Heinz's Athenos (feta) business will be divested to Emmi Roth USA Inc. or an alternative acquirer approved by the United States while the Polly-O (ricotta) business will be divested to BelGioioso Cheese Inc. or an alternative acquirer approved by the United States.