Dean Foods Co., one of the largest dairy distributors in the United States, says it has agreed to pay $140 million to settle a lawsuit over pricing with a group of dairy farmers in the Southeast.
The dairy farmers claimed that Dean and cooperatives that are major buyers worked together to keep the prices of milk artificially low, thereby limiting the farmer's profits. Dean Foods denied the claims.
The case was scheduled for trial in August. But under the agreement, Dean Foods will pay the money over a four to five year period into a fund for the dairy farmers in a number of Southeastern states.
The agreement is subject to approval by the United States District Court for the Eastern District of Tennessee.
Gregg Engles, CEO of Dean Foods, said Tuesday the settlement is in the best interest of the business.
Shares of the Dallas-based company fell 11 cents to $11.89 in late afternoon trading.