U.S. Files Antitrust Lawsuit, Proposed Settlement Against Kraft Heinz Cheese Acquisition

The United States filed an antitrust lawsuit in the District Court of Columbia on Wednesday against a major French dairy company to prevent its acquisition of the Kraft Heinz Company’s natural cheese business.

Defendant B.S.A. S.A. and its subsidiary LAG Holding Inc., together known as Lactalis, agreed to pay more than $3 billion to acquire Kraft Heinz’s natural cheese business in September 2020. This acquisition would bring together the two largest suppliers of feta cheese in the United States and the two largest suppliers of ricotta cheese in five metropolitan areas in New York and Florida, the lawsuit states. 

“The proposed combination of Lactalis and Kraft Heinz would likely lead to higher prices, lower quality, and reduced choice for retail consumers of these cheeses, at a time when many Americans are struggling to meet rising food prices,” the plaintiff argues. “The transaction should be enjoined to prevent American consumers from suffering these likely anticompetitive harms.”

The United States filed a proposed settlement concurrently with the lawsuit, which, if approved by the court, would require the defendants to divest Kraft Heinz’s Athenos and Polly-O businesses, according to a Department of Justice press release. Kraft Heinz currently sells feta under its Athenos brand and ricotta under its Polly-O brand.

“‘This transaction, as originally proposed, would have led to higher-priced and lower-quality feta and ricotta, two popular cheeses that American consumers regularly purchase to feed their families,’” Acting Assistant Attorney General of the Justice Department’s Antitrust Division Richard A. Powers said in the press release. “‘Today’s settlement will maintain the competition in the sale of feta and ricotta cheeses that would have been lost if the transaction were permitted to go forward without the required divestitures.’”

The public may submit written comments on the proposed settlement during a 60-day comment period to Eric D. Welsh, chief, Healthcare and Consumer Products Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St. N.W., Suite 4100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter final judgement.