09/30/03
By BRIAN LAWSON
Times Business Writer brianl@htimes.com
The company that owns Meadow Gold Dairy will not build a distribution center in Huntsville as previously announced, and has decided to cease all Alabama operations, cutting about 85 jobs in Huntsville.
Overall, about 140 employees in Alabama - including workers in Cullman, Florence, Gadsden and Scottsboro - will be terminated, according to National Dairy Holdings.
The closing and cuts will be effective Oct. 31, and the company said it will negotiate with union representatives from the Retail, Wholesale and Department Union, to work out severance and related agreements.
National Dairy Holdings LLC, ended milk processing at the 60-year-old Meadow Gold Dairy in downtown Huntsville in April, announcing that it would continue to serve this area by shipping milk from Kentucky.
The Meadow Gold Dairy has continued to serve as a distribution center since milk processing ended in the summer.
In closing the Huntsville dairy and cutting about 70 jobs in April, National Dairy Holdings announced it would build a distribution center in Madison County. But a company spokesman said this morning that the company decided over the summer to "redeploy" its assets.
"It was really a question of whether we could sustain a business in a manner we wanted to," said Fred Stern, a National Dairy Holdings spokesman. "We're in a very competitive environment. We evaluated over the summer and made the decision to put funds elsewhere."
Local purchasing managers said, following the first closing announcement, Meadow Gold assured them they would see no disruption of service, although milk and milk products would be shipped from New London, Ky. The company said this morning it would help customers find new suppliers.
The closing will result in 21 Alabama school districts, including Madison County schools, looking for a new milk supplier.
Tennessee-based Purity Dairy was the only other bidder for a milk contract from the Madison County schools this year, according to Chuck Baker, who handles purchasing for the school system.
Baker said the Purity bid was about $10,000 higher than Meadow Gold's to supply milk for the 2003-2004 school year. Baker said he would talk to the school system's attorney to help determine if the milk contract now goes to the next lowest bidder or needs to be rebid.
Purity already supplies the Huntsville City Schools. Purity first won the contract before the 2002-2003 school year. During the bid process, Meadow Gold Dairy plant employees pleaded with the Huntsville Board of Education to leave the contract with Meadow Gold, arguing that the loss of so much work would result in the plant's eventual closing. Purity won the roughly $500,000 contract with a $40,000 lower bid.
Both Purity and Meadow Gold's milk is supplied by the Dairy Farmers of America Inc. which co-owns National Dairy Holdings. NDH is Meadow Gold's owner.
Earlier this year, the U.S. Department of Justice filed an antitrust lawsuit against the Dairy Farmers of America and Southern Belle Dairy Co. of Tennessee, seeking to block a merger between the two, arguing that the merger would result in less competition for school milk bids in Kentucky and Tennessee.
A DFA spokesperson said the lawsuit was based on speculation, not actual conduct.
In the 1990s, the dairy industry paid more than $60 million in fines, and actions were brought in 40 states, including Alabama, for alleged price-fixing in school milk contracts.
When the dairy announced last spring that it would close, city officials expressed an interest in the property, which is located next to the Von Braun Center.
Joe Vallely, the city's director of economic development, said this morning he was not aware of any agreement to buy the property.
