Washington, D.C. — In July of 2016, Paris, France-based Danone SA announced its intention to acquire Denver, CO-based WhiteWave Foods Co. The firm has finally gained approval to proceed with the $12.5 billion buyout, its largest to date, but the Justice Department has made the purchase contingent on Danone selling Stonyfield Farms, based in Londonderry, NH, which it currently owns. The reason for this is the concern that if Danone were to own WhiteWave, which makes Broomfield, CO-based Horizon Organic products, in addition to its current holdings that include Stonyfield, there would be much less competition in the organic milk market.
Concerns on this matter were originally raised by the Wisconsin-based watchdog group The Cornucopia Institute in August of 2016. The organic dairy marketplace is already short on competition, making it susceptible to monopolization, explained the institute. An example of this is that Le Farge, WI-based CROPP cooperative, otherwise known as Organic Valley, and WhiteWave are two of the largest purchasers of raw organic milk and in competition with each other. Organic Valley supplies 90% of the organic milk used in Stonyfield’s yogurt and other dairy products. If, says the institute, Danone was to purchase WhiteWave still in possession of Stonyfield and decided to sever its relationship with Organic Valley because of WhiteWave, this would leave only one major buyer of organic milk in the Northeastern United States, potentially reducing options and raising prices without positively effecting quality.
As such, it appears that the Department of Justice agreed with this assessment because an additional condition of the acquisition is severing Danone’s strategic partnership with Organic Valley. While Danone would be relinquishing control over organic dairy, the acquisition gives the firm dominance in plant-based beverages with access to WhiteWave’s Silk Soy Milk.