Dean Foods bankruptcy another blow to local dairy industry

2 min read6,410 views and 1,616 shares Posted November 15, 2019

Swiss Premium Dairy-owner Dean Foods announced this week that it has entered bankruptcy proceedings, or Chapter 11 reorganization.

Swiss Premium Dairy (formerly Wengert’s Dairy) was founded by Samuel K. Wengert in Lebanon in 1931. The Dean subsidiary remains based in North Cornwall Township, operating at its 2401 Walnut St. fluid milk processing plant. (Read more about Wengert’s Dairy history here.)

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“Right now it is business as usual for us,” said Dean Foods vice president Anne Divjak in an email to LebTown. “We are continuing to provide customers with an uninterrupted supply of high quality dairy products and are relying on our dedicated employees and valued milk suppliers to help us do this.”

“Any future decisions regarding our plants will be based, as always, on market conditions and the needs of the business.”

Dean Foods has created a website about the restructuring process. In an FAQ document for raw milk suppliers posted to this site, the company said that it intends to pay suppliers in full under normal terms for goods and services provided on or after the filing date of Nov. 12. However, the document notes that claims made before this date are subject to court approval.

For now, the company is saying that suppliers don’t have much recourse. In the FAQ, the company states that it expects vendors to continue performing under existing terms. Claims can be filed through Epiq, a firm hired to help manage the restructuring process. No deadline for petition filing has been set at this time.

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Dean Foods also announced that it is in advanced discussions with Dairy Farmers of America but there is no news at this time about whether a sale will occur.

The bankruptcy proceedings represent another blow to the local dairy industry. Last year, Dean Foods severed contracts with 42 dairies in the state, many of them located in Lebanon County, with Dean Foods citing declining milk consumption and the entry of new companies into the milk processing business as causes for the cutback (most notably, Walmart).

Read More from PennLive: Lebanon / Lancaster farmers facing loss of milk contracts seek public’s help in gaining extension

Swiss Premium Dairy has previously been recognized as a center of excellence within the Dean Foods dairy universe. In 2014, the Lebanon plant was awarded the company’s top safety honor over nearly 70 other dairies.

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In addition to Swiss Premium, Dean Foods brands include Dairy Pure, True Moo, and a number of other regional dairies. Dean Foods also has a milk supply and licensing relationship with Land O’ Lakes, a farmer-owned co-op.

Read More LebTown Coverage on the Dairy Industry

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An earlier version of this post stated that Organic Valley was a Dean Foods brand. This was incorrect, Organic Valley has a joint venture with Dean Foods but is a separately-owned company. We sincerely regret the error.

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