The international law firm Milbank LLP has represented its longstanding client DMK, Germany’s largest dairy company, on the antitrust investigation of the German Federal Cartel Office on the milk supply agreements with farmers. In April 2016, the German Federal Cartel Office initiated a model investigation against DMK reviewing the supply agreements with its approximately 9,000 farmers, as it considered the sector-wide milk supply conditions between dairies and milk producers to be anti-competitive. The investigation was subject of an intense public debate on numerous political and industry events.
The focus of the German Federal Cartel Office’s criticism was on the duration of the agreements, notice periods as well as on the exclusive supply and purchase obligations on the farmers and the dairy company respectively. The German Federal Cartel Office was concerned that the interplay of the arrangements had a foreclosure effect on the markets for raw milk.
DMK, organized as a cooperative, had always emphasized that its milk supply conditions are appropriate and necessary in an environment with effective competition concerning a rapidly perishable product. In addition, the governance as a cooperative ensured that the interests of the company as well as its owners, the farmers, were all addressed and well balanced. The authority has now closed the investigation after two years without imposing any remedies or requesting any other actions.
Advisor to DMK (Deutsches Milchkontor): Milbank LLP
Alexander Rinne (lead), Moritz Lichtenegger (both Antitrust, Munich)
