Cornucopia Calls Danone-WhiteWave Merger Bad for Farmers and ConsumersAugust 15th, 2016
Cornucopia’s Take: Knowledgeable organic industry observer looks at Cornucopia’s call for the blocking of the Danone-WhiteWave merger.
In response to the recent announcement that Group Danone would purchase WhiteWave for more than $10 billion, organic industry watchdog group, The Cornucopia Institute, has filed complaints with the Department of Justice and the Federal Trade Commission citing the merger as a threat to U.S. organic dairy producers. The group has also launched a consumer petition urging federal authorities to investigate the merger.
In 2004, Group Danone, the French dairy conglomerate, which owns numerous conventional dairy brands including Activia, Oikos, and Dannon, purchased Stonyfield Yogurt, the largest organic yogurt brand in the world. And the acquisition of WhiteWave would bring Horizon, the largest U.S. organic dairy brand, under Danone’s umbrella as well, in a move The Cornucopia Institute says “will have a chilling impact on both competition in the consumer marketplace and the wholesale market for organic milk.”
The group cites “specific concerns” that would lead to an anti-competitive environment for organic milk and yogurt products in the U.S., namely by smaller family farms. Organic Valley, Horizon’s main organic milk competitor, is a cooperative of more than 1,800 family farms, and has been one of Stonyfield’s main suppliers of organic milk. The merger would likely eliminate the partnership.
“These are important considerations for determining whether this acquisition violates the Sherman Act and the Clayton Act for anti-competitive and anti-trust reasons,” Marie Burcham, a livestock policy analyst and attorney with The Cornucopia Institute, said in a statement. “With this acquisition we are concerned that Danone will easily be able to beat out any competition by lowering prices beyond what farmstead dairies, and more moderate size milk processors and marketers, can withstand.”
Horizon has been singled out several times by The Cornucopia Institute for bending the organic rules for livestock care. The group alleged that Horizon’s animal facilities failed to offer animals access to pasture and grazing in accordance with USDA organic regulations. Drone footage captured of Horizon facilities in 2014 by The Cornucopia Institute showed no grazing animals despite the pasture being in prime grazing condition.
“The federal organic regulations make it very clear that all organic livestock must have access to the outdoors and that ruminants, like dairy cows, must have access to pasture,” Mark A. Kastel, Senior Farm Policy Analyst at The Cornucopia Institute said in 2014. “The vast majority of these massive, industrial-scale facilities, some managing 10,000-20,000 head of cattle, and upwards of 1 million laying hens, had 100% of their animals confined in giant buildings or feedlots.”
Now, Kastel points to the Danone-WhiteWave merger as another disruption of the organic industry, and one with potentially dire consequences for the consumer.
“Mergers like this one could eventually reduce options and raise prices for consumers,” said Kastel. “With less competition, big companies commonly underpay independent farmers for their products, undermining the economic viability of small, family-scale farms.”
In its dairy survey, The Cornucopia Institute ranks Horizon as “ethically deficient.”