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December 11, 2006

Big Milk vs. Little Competitor

When gas prices rise, we get wails from the public and endless investigations into whether “Big Oil” might be screwing consumers.

But what happens when Big Milk flexes its political muscle to keep prices artificially high?

    In the summer of 2003, shoppers in Southern California began getting a break on the price of milk.

    A maverick dairyman named Hein Hettinga started bottling his own milk and selling it for as much as 20 cents a gallon less than the competition, exercising his right to work outside the rigid system that has controlled U.S. milk production for almost 70 years. Soon the effects were rippling through the state, helping to hold down retail prices at supermarkets and warehouse stores.

    That was when a coalition of giant milk companies and dairies, along with their congressional allies, decided to crush Hettinga's initiative. For three years, the milk lobby spent millions of dollars on lobbying and campaign contributions and made deals with lawmakers, including incoming Senate Majority Leader Harry M. Reid (D-Nev.).
    Last March, Congress passed a law reshaping the Western milk market and essentially ending Hettinga's experiment -- all without a single congressional hearing.

    "They wanted to make sure there would be no more Heins," said Mary Keough Ledman, a dairy economist who observed the battle.

Whole story here.

Posted by tedb at December 11, 2006 02:25 PM




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