A small Florida milk distributor last week pleaded guilty to one federal felony count of conspiring with unnamed dairies to rig bids for a school-lunch milk contract.
Sunny Florida Dairy Inc. of Tampa is the first dairy distributor charged by a federal grand jury empaneled by the U.S. Justice Department to investigate alleged collusive practices by dairies in Florida.
The dairy has offered to cooperate in the grand jury’s continuing investigation as part of a plea bargain that could allow the company to be fined $40,000 for the violation, according to department officials.
Last week’s agreement came less than four months after Florida’s attorney general filed a civil lawsuit charging seven of the nation’s largest dairies and four local distributors with antitrust violations uncovered in a separate investigation. (See Education Week, Feb. 24, 1988.)
When those charges were filed, Attorney General Bob Butterworth predicted that the action would trigger similar probes of possible price fixing in school milk contracts in other states.
Sunny Florida Dairy was not named in the state suit, which alleged that dairies had engaged in a long-running conspiracy to fix milk contracts with 32 of Florida’s 67 county school districts.
Sunny Florida filed a guilty plea in federal court in response to a criminal charge of conspiring to rig the bids for one contract with the Hillsborough County schools during the 1984-85 school year.
The state and federal cases charge that the named milk producers and distributors violated the federal Sherman Antitrust Act, which prohibits companies from collaborating to set prices or production quotas.
The dairies allegedly negotiated with their competitors to determine which would win each school contract and at what price, after which the other firms submitted bids higher than that of the designated winner.
U.S. District Judge William Terrell Hodges, who must decide whether to accept Sunny Florida’s plea bargain, had not ruled on the matter as of late last week. --WS
