31 N.W. Iowa School Districts Receiving $141,480 as a Result of Alleged Price-Fixing in School Milk Sales

Dairies allegedly divided up territories illegally as a way to eliminate competition and rig milk bids.

DES MOINES-- The Attorney General's Office said Thursday that 31 school districts in Northwest Iowa are receiving payments totaling $141,480 from Wells Dairy Inc. of Le Mars, Iowa, in settlement of allegations that Wells conspired with other dairies to fix the prices of milk sold to the schools. Settlement documents were filed today in Polk County District Court.

Wells is making the payments to thirteen public school districts and eighteen private schools in Lyon, Sioux, O'Brien and Osceola counties. Wells also is paying $20,000 to the State of Iowa for enforcement of Iowa competition laws.

Last year, Land O' Lakes Inc. of Arden Hills, Minnesota, made payments totaling $43,000 to 33 Northwest Iowa school districts in the same matter.

Consumer Protection Division Director Bill Brauch said the payments are equivalent to the estimated amount the schools paid above what they would have paid for the milk products if there had been no illegal pricing activity. Wells did not admit to violations but did cooperate in settling the matter.

The settlement is related to an investigation initiated by Federal officials of alleged school milk price-fixing by dairies from 1980 to 1992 in Minnesota, South Dakota, and Northwest Iowa. Wells previously paid a penalty as a result of the Federal action. Miller's office focused on the issue of repayment to the schools affected in Iowa.

The investigation focused on allegations that the dairies illegally rigged school milk bids by dividing up markets, so that one dairy would win the bid in one area, while other dairies would win the bids in other areas.