Danone’s proposed $10bn acquisition of White Wave Foods is facing new opposition, after a watchdog group for the US organic industry filed a complaint with regulators.
The Cornucopia Institute – a trade group made up on 10,000 members – has asked the Justice Department and the Federal Trade Commission to probe the deal, alleging that it is anti-competitive and threatens the US organic dairy market. The group claims the deal would give Danone the largest-ever share of the market by a single company, which would lead to “a chilling impact on both competition in the consumer marketplace and the wholesale market for organic milk”. It also notes: “We have specific concerns that this acquisition would have a serious anti-competitive effect on the organic yogurt and organic fluid milk markets in the US.”
Mark A. Kastel, Cornucopia’s co-director, noted: “Mergers like this one could eventually reduce options and raise prices for consumers. With less competition, big companies commonly underpay independent farmers for their products, undermining the economic viability of small, family-scale farms.”
The move came even as White Wave announced that its second-quarter sales grew by a strong 14% to $1.05bn, even as net profit surged up 40.5% to $52m.
The group expects full-year sales to grow by 10.5%-11.5%, and said it continues to expect the merger to be completed by end-2016.
- Whatever the outcome, a probe of this type spells delays, instability and distraction ..
- …providing opportunities for competitors that are free to focus..