Lactalis American Group Inc., Monopoly, District of Columbia 2023

U.S. authorities cracked down on a cheese cartel yesterday, requiring the divestiture of two major cheese businesses to prevent a monopoly in the U.S. natural cheese market.

The Justice Department’s Antitrust Division announced that it will require B.S.A. S.A. (Lactalis) and The Kraft Heinz Company (Kraft Heinz) to divest Kraft Heinz’s Athenos and Polly-O businesses. This move aims to prevent Lactalis from dominating the market for feta and ricotta cheese.

Lactalis’s U.S. subsidiary, Lactalis American Group Inc., and Kraft Heinz are the two largest suppliers of feta cheese to grocery stores and other retailers in the United States. They are also the two largest suppliers of ricotta cheese to grocery stores and other retailers in the New York City metropolitan area and four metropolitan areas in Florida.

The proposed settlement requires the parties to divest Kraft Heinz’s Athenos business to Emmi Roth USA Inc. or an alternative acquirer approved by the United States. Emmi Roth is an established cheese supplier based in Fitchburg, Wisconsin. With the divestiture of Kraft Heinz’s Athenos business, Emmi Roth, or an alternative qualified acquirer, will be able to expand its feta cheese sales to grocery stores and other retailers across the United States.

The proposed settlement also requires the parties to divest Kraft Heinz’s Polly-O business to BelGioioso Cheese Inc. or an alternative acquirer approved by the United States. BelGioioso is an established cheese supplier based in Green Bay, Wisconsin. With the divestiture of Kraft Heinz’s Polly-O business, BelGioioso, or an alternative qualified acquirer, will be able to expand its ricotta cheese sales to grocery stores and other retailers in New York and Florida.

U.S. authorities cited Lactalis’s U.S. subsidiary, Lactalis American Group Inc., for monopoly charges, alleging that the company’s acquisition of Kraft Heinz’s natural cheese business in the United States would have led to higher-priced and lower-quality feta and ricotta, two popular cheeses that American consumers regularly purchase to feed their families.

The divestitures are structured to include the entirety of the Athenos and Polly-O businesses, so as to avoid customer confusion that could have resulted had the brands been used by both Lactalis and the divestiture buyers. The divestitures, including the worldwide rights to the entire Athenos and Polly-O portfolios, also place the divestiture buyers in the position to market and promote all the cheeses sold under these brands, as Kraft Heinz does today.

Defendant: Lactalis American Group Inc.

Crime: Monopoly

City and State: District of Columbia

Exact Date: April 26, 2023

Sentence or Outcome: Settlement

Dollar Amounts: $429 million in natural cheese sales in 2020

MORE FEDERAL CRIME NEWS

White Collar Crime

Dandruff Killer or Deadly Scourge? Union Bartrtry Shop's Mysterious Ad

Nov 7, 1902

White Collar Crime

Machado Martinez, Healthcare Fraud, Florida 2018

Jan 15, 2018

White Collar Crime

Cruz Graveran, Healthcare Fraud, Florida 2022

Jan 15, 2022

White Collar Crime

Del Carmen-Uceta, Wire Fraud, Florida 2004

Jan 15, 2004