How A Massive $10 Billion Dairy Merger Is Going To Affect Your Milk– And Your Grocery Bill

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How A $10 Billion Dannon Bid For One of the U.S.’s Largest Organic Dairy Manufacturers May Affect Your Bottom Line

Mergermania is back, and bigger than ever, when it comes to your food.

First we had agrichemical giant Bayer AG bidding for another gas giant of the agriculture and chemical industry, Monsanto, in a buyout bid worth some $60 billion. That was rebuffed, but investors and people with an interest in the food industry and how the GMO purveyors are moving forward paid close attention. This may well be the wave of the future: as these companies get bigger and bigger, their prey in the buyout pond also becomes bigger.

The latest of these mega-mergers in the food industry comes from Groupe Danone (Dannon, in the U.S.) which has announced an acquisition proposal seeking to buy up WhiteWave Foods for a proposed price of around $10 billion.

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The deal would bring under one umbrella Groupe Danone’s Stonyfield, the world’s largest organic yogurt brand, with Wallaby, an up-and-coming yogurt brand. Also under one roof would be the world’s largest organic milk brand, Horizon, as well as WhiteWave’s soy milk brand Silk.

The result of this deal, should it go through, would be that Danone would control a huge chunk of the organic dairy market–some say to the point where they would be in a position to muscle out any remaining competition.

The Cornucopia Institute, and organic farming industry watchdog group has filed a challenge to the acquisition with the Department of Justice and the Federal Trade Commission, charging that the merger would “…cause a serious erosion of the competition in the consumer marketplace.”

“We are concerned that Danone will easily beat out any competition by lowering prices beyond what farmstead dairies, and more moderate size milk processors and marketers, can withstand,” said Marie Burcham, who works as a livestock policy analyst with Cornucopia.

Given that Danone brands already dominate the U.S. organic marketplace–according to one study, Stonyfield accounts for 65 percent of all organic yogurt sales–the acquisition of even tiny Wallaby with its 3 percent market share, and Horizon’s yogurt brand at 1 percent seriously diminishes the competition.

“Mergers like this one could eventually reduce options and raise prices for consumers without any positive impact on the quality of the products they are buying,” said Mark A. Kaster, co-director of Cornucopia.
Selling organic products is big business: $43 billion last year alone.

And as consumer awareness of the dangers of toxic “traditional” farming methods involving genetically modified crops and heavy pesticide and herbicide spraying continues to grow, more and more people are contributing to that pie–and corporations, being corporations, always want a bigger slice.

The danger for the rest of comes in letting them take so much of it that there isn’t any left for anyone else.
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http://www.alternet.org/food/how-proposed-10-billion-dairy-industry-merger-will-impact-your-glass-milk

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