Ala. Files Suit Against Dairies

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Alabama has joined a growing list of states alleging antitrust violations in the sale of food to schools.

Attorney General Don Siegelman last month filed suit in U.S. district court in Montgomery accusing seven dairy companies of dividing the state's districts among themselves and agreeing in advance which firm would enter the lowest bid for the milk contract with a given district.

The alleged conspiracy inflated milk prices by one or two cents per half-pint carton, according to Mr. Siegelman. As a result, "millions of dollars were taken, penny by penny," between 1983 and 1988, he said.

Named in the lawsuit are Barbar Pure Milk Company and Baker and Sons Dairy Inc., both of Birmingham, Ala.; Cloverleaf Dairies Inc. of Dallas County, Ala.; Borden Inc. and Meadow Gold Dairies Inc., both of Columbus, Ohio; Kinnett Dairies Inc., of Columbus, Ga.; and Dairy Fresh Corporation of Hale County, Ala.

The companies are accused of violating federal antitrust laws and Alabama's free-trade laws. If found guilty, they could be ordered to pay damages equal to three times the amount of the overcharges and be barred from doing business with the state and the districts.

State and federal investigations have already led to convictions against or civil settlements with milk and bread contractors in Florida, Kentucky, and Georgia.--ps

Vol. 09, Issue 14

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