Dean Foods announced Tuesday that it was filing for Chapter 11 bankruptcy protection.
The Dallas milk processing company said it plans to use Chapter 11 procedures to continue doing business and to resolve debt and unpaid debt obligations as it seeks to sell the company. Dean Foods promises that throughout this period the company's regular customers will receive their dairy products without interruption.
Dean Foods also said it is in "extended discussions" with Dairy Farmers of America about selling "virtually" all of its assets. Even if both parties agree to the sale, the deal will be contingent on getting higher or better bids while the company is on the brink of bankruptcy.
Dean Foods' business is facing challenges as more consumers are turning to non-dairy milk or purchasing private label products. Per capita consumption of liquid milk has declined by 26% over the past two decades, according to USDA data.
Dean Foods reported a net loss in seven of the last eight quarters.
The company's bankruptcy filing comes as the country's dairy farmers are also trying to adapt to the changing dairy market. Falling dairy prices, trade turmoil, and labor shortages hit farmers hard.
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Editorial comment
Dean Foods is the largest dairy company in the United States. The company owns 58 brands - that is, other companies that made milk or other products but went broke and were bought by Dean Foods.
Dean Foods was founded in the 1920s, survived the Great Depression, World War II and a series of all kinds of financial crises, as it has always produced excellent and quality products.
However, keeping pace with the times, Dean Foods began to actively use GMO products, the so-called "soy milk" and other horrors that supermarkets stuff people with. In particular, in the production / sale of soy milk, Dean Foods has been a world leader for 10 years.
In other words, Dean Foods is a typical global company, strictly following the laws of the global market. Therefore, when a factory in Holland, which has been selling good natural milk to local people for 100 years, is ruined, the reason for its ruin is clear. However, when an office like Dean Foods goes bankrupt, it's all very strange, since there are no obvious reasons for bankruptcy.
It is difficult to say what this whole situation is connected with at the moment, since there is no news from other global companies yet, nevertheless, this whole situation with a strange bankruptcy is somewhat reminiscent of the history of “business” in the CIS in the early 1990s.
The story began with the fact that after the proclamation of "perestroika" and the declaration of "private property", as it were, millions of, probably, private firms and small firms appeared in the USSR. Sometimes they were legal firms, sometimes they were once state-owned enterprises that quickly “privatized” tough local guys with baseball bats.
Everything was great for a while, until some other kind of "bandits" with some very serious "roofs" appeared, who stupidly began to pull up all this small business.
For example, some enterprising person made a parking lot from a vacant lot in his microdistrict, after which, having invested a little and received all permits from the local authorities, he planned to develop a business. And at that moment some strange people appeared who made a convincing proposal to become co-owners of the enterprise. Then the owner of the parking lot had only two options: either to go to the morgue right away, or after some time, so that the co-owners inherited the parking lot by law.
As a result of such manipulations, all sorts of "financial groups" and "authorities" appeared, which owned entire cities and towns, after which the death of these "financial groups" and "authorities" began, on which they either started some business, or they simply disappeared. Further, after a while, and as a result of the death, huge property was concentrated in the hands of some unknown person, and it is absolutely impossible for journalists or even security officers to trace where everything goes.
The conspiracy theorists have a strong suspicion that almost the same story is happening with global corporations, but on a more serious scale. All sorts of big companies play the role of regional "authorities" of the post-Soviet mid / late 1990s - they are allowed to ruin and buy up smaller fish, turning it into their own brands, and then bankrupt such monsters as PepsiCo, Inc.
But, if in the case of PepsiCo, Inc. it is quite clear who owns the money and brands, then after its ruin and buying up, the tails will go to no one knows where. That is, there will already be some kind of super-globalism, in which the world economy will be controlled not by a million people, but by only a few thousand, whom no one will even know.
It is possible that all this is speculation and conspiracy theories, it is possible that it is true, but the story with Dean Foods makes one think that everything is going in this direction, so we are watching the bankruptcies of other global companies and follow the development of events.