Two large milk companies are accused of fixing prices in Utah and have voluntarily agreed to pay the state $250,000 each in penalties, state Attorney General Paul Van Dam said Tuesday.
The settlement is the largest obtained under antitrust laws in state history, officials said.The agreement, signed early Tuesday in 3rd Circuit Court, came after state officials alleged that top executives from Western Dairymen Cooperative, based in Thornton, Colo., and Meadow Gold Dairies, based in Columbus, Ohio, met in the fall of 1986 and agreed to raise the price of milk 10 cents per gallon.
The executives also reportedly agreed to divide the wholesale dairy market among themselves, and Western Dairymen officials did things to monopolize trade and suppress competition, according to a complaint filed by the state.
Van Dam said the price fixing is believed to have happened several times until January 1988. The executives met in Denver and Salt Lake to agree on prices. The agreement, however, covers only the companies' dealings in Utah.
"We have to confine our investigation to the area we have jurisdiction over," Van Dam said, adding he knows of no other states investigating the firms.
Western Dairymen is the largest supplier of raw milk in the Great Basin Region, with members in Idaho, Colorado, Utah, Nevada and Arizona. Meadow Gold also is one of the largest milk processors in the region and does business nationwide.
Van Dam said the combined $500,000 in fines does not come close to the amount of money the companies are believed to have earned from the price fixing. He did not estimate how much money they received.
State attorneys began investigating anonymous tips about price fixing last year, Van Dam said.
Neither company admits fault in the agreements, and Van Dam said no criminal charges are pending. The companies already have paid most of the money to the state and are expected to pay the rest within a few days.
Western Dairymen Board Chairman James P. Camerlo is mentioned in the settlement. The agreement also prohibits Meadow Gold from rehiring its former president, Jay Johnson.
The agreement calls for the companies to stop setting prices together and to allow the attorney general's office to review their records and documents for 10 years.