Business / Capital Spending / Industry News

Complaints Filed Over Danone's White Wave Purchase

By Lauren R. Hartman, Product Development Editor

Aug 12, 2016

The proposed acquisition by French food giant Groupe Danone of WhiteWave Foods is being contested by an industry watchdog, the Cornucopia Institute, which says the move "will have a serious anti-competitive effect on the organic yogurt and organic fluid milk markets in the U.S."

The Wisconsin-based institute filed complaints with both the Federal Trade Commission and the Department of Justice, stating the acquisition would also have a negative economic impact on U.S. organic dairy farmers.

At a purchase price exceeding $10 billion, the deal would combine Stonyfield, Horizon and Wallaby to dominate the organic dairy market. Horizon organic milk controls nearly 25 percent of the organic milk market, while its Silk brand is a leader in plant-based beverages. Danone would be taking control of a bigger piece of the organic dairy market than has ever been controlled by a single company before, says the institute, which also launched a petition drive pushing for a full investigation of the proposed merger by federal regulators.

"With this acquisition, we are concerned that Danone will easily be able to beat out any competition by lowering prices beyond what farmstead dairies, and more moderately sized milk processors and marketers, can withstand," said Marie Burcham, a livestock policy analyst with the Cornucopia Institute, a nonprofit organization representing farms and consumers with interests in the organic dairy market.

The market for organic dairy already has less competition than other agricultural sectors and is more susceptible to monopolization, Burcham continued. "It is important that the authorities look at the anti-competitive implications of the Danone-WhiteWave deal," she added. "We ask that they consider the organic dairy and organic yogurt markets in particular as different and already more concentrated markets in comparison to Danone’s other, non-organic market share."