The French dairy giant, Groupe Danone (Dannon in the U.S.) has announced the proposed acquisition of WhiteWave Foods for approximately $10 billion. The deal would combine the world’s largest organic yogurt brand, Stonyfield, with Wallaby, a rapidly growing yogurt label, and the nation’s largest brand of organic milk, Horizon. Groupe Danone holds an 85 percent stake in Stonyfield.

We at the Cornucopia Institute, an organic industry watchdog, are formally challenging the acquisition and have asked the Department of Justice and the Federal Trade Commission to scrutinize the deal. We argue that the merger would cause a serious erosion of competition in the consumer marketplace and would have a negative economic impact on U.S. organic dairy farmers.

“We are concerned that Danone will easily beat out any competition by lowering prices beyond what farmstead dairies, and more moderate size milk processors and marketers, can withstand,” said Marie Burcham, a livestock policy analyst with Cornucopia.

WhiteWave brands are the top sellers in their categories. Its Horizon organic milk controls nearly 25 percent of the organic milk market, while its Silk brand is a leader in plant-based beverages. Danone would potentially control a bigger piece of the organic dairy market than a single company has ever controlled.

Stonyfield already dominates the U.S. organic yogurt market. According to a respected industry insider, who requested anonymity, Stonyfield's brand accounts for 65 percent of all organic yogurt sales. One of its fastest growing domestic competitors is WhiteWave's Wallaby, which has a 3 percent market share. WhiteWave acquired the California-based Wallaby for $125 million late last year to complement its Horizon organic yogurt brand which possesses a 1 percent market share.    

Dairy has long been considered a gateway organic food, being one of the first foods consumers associate with the organic label. In many households organic milk and yogurt are among the initial foods introduced to children. Following fruits and vegetables, organic dairy products comprise the second largest segment in the organic industry.