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Justice Department requires divestitures in Lactalis’s acquisition of Kraft Heinz’s natural cheese business in U.S.

Christian Fernsby |
The Department of Justice announced that it will require B.S.A. S.A. (Lactalis) and The Kraft Heinz Company to divest Kraft Heinz’s Athenos and Polly O businesses in order to proceed with Lactalis’s proposed acquisition of Kraft Heinz’s natural cheese business in the United States.

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The Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit.

Lactalis’s U.S. subsidiary, Lactalis American Group Inc., and Kraft Heinz are the two largest suppliers of feta cheese sold under their respective Président and Athenos brands to grocery stores and other retailers in the United States. They are also the two largest suppliers of ricotta cheese sold under their respective Galbani and Polly O brands to grocery stores and other retailers in the New York City metropolitan area and four metropolitan areas in Florida: Miami Ft. Lauderdale, Tampa St. Petersburg, Orlando and Jacksonville.

Under the terms of the proposed settlement, the parties must divest Kraft Heinz’s Athenos business including the worldwide rights to the Athenos brand, under which Kraft Heinz sells feta and other products to Emmi Roth USA Inc. (Emmi Roth) or an alternative acquirer approved by the United States.

Emmi Roth is an established cheese supplier based in Fitchburg, Wisconsin. With the divestiture of Kraft Heinz’s Athenos business, Emmi Roth, or an alternative qualified acquirer, will be able to expand its feta cheese sales to grocery stores and other retailers across the United States.

The proposed settlement also requires the parties to divest Kraft Heinz’s Polly O business including the worldwide rights to the Polly O brand, under which Kraft Heinz sells ricotta and other cheeses to BelGioioso Cheese Inc. (BelGioioso) or an alternative acquirer approved by the United States.

BelGioioso is an established cheese supplier based in Green Bay, Wisconsin. With the divestiture of Kraft Heinz’s Polly O business, BelGioioso, or an alternative qualified acquirer, will be able to expand its ricotta cheese sales to grocery stores and other retailers in New York and Florida.

The divestitures are structured to include the entirety of the Athenos and Polly O businesses, so as to avoid customer confusion that could have resulted had the brands been used by both Lactalis and the divestiture buyers.

The divestitures, including the worldwide rights to the entire Athenos and Polly O portfolios, also place the divestiture buyers in the position to market and promote all the cheeses sold under these brands, as Kraft Heinz does.


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