Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, April 30, 1990 TAG: 9004300348
SECTION: VIRGINIA PAGE: B3 EDITION: EVENING
SOURCE: Associated Press
DATELINE: RICHMOND LENGTH: Medium
In a letter this month to U.S. Attorney General Dick Thornburgh, Terry cited "troubling patterns" in local school contracts for milk, leading her to "suspect that there may be collusive activity, " The Washington Post reported Saturday.
The report cited sources in the attorney general's offices as saying a civil investigation by the state was in an early stage.
Joe Krovisky, a Justice Department spokesman, said Thornburgh's office is drafting a reply to Terry's request for a federal investigation similar to probes that led to recent convictions of dairy executives in Florida, Georgia and Kentucky.
Terry's letter said a probe into milk contracts over five years in nearly all of the state's 133 school districts found the disturbing patterns.
The newspaper reported the following findings so far:
Of 35 dairy companies invited to bid for Fairfax County school district's $2 million annual contract, Shenandoah's Pride was the only one to submit a proposal.
Officials in Prince William and Arlington counties told the Post that Shenandoah's Pride was the only one to bid on their business as well.
In many school districts, a single dairy distributor wins the business every year.
The prices milk distributors charge vary from one school district to another, sometimes for reasons that state investigators say are unclear.
For example, the price charged to school systems for a half-pint of 2 percent lowfat milk varies from about 13 cents to 17 cents around the state.
In Fairfax County, the state's largest school system with 129,000 students, Shenandoah's Pride gets 13.4 cents for each half-pint of 2 percent milk.
The county tacks on an extra charge in the cafeteria line, where students pay 35 cents for a half-pint of milk.
Barney Meredith, division manager for Shenandoah's Pride, said his firm's location in Springfield gives it an advantage in bidding for Northern Virginia business and helps explain why that dairy has the contract in every school district in the region.
"We're geographically the best located to get to those school systems," he said.
But according to the Post, sources in Terry's office wondered why Embassy Dairy in Waldorf, Md., did not compete for more Northern Virginia business, since it has contracts in Culpeper and Orange counties.
James Powers, Embassy's general manager, said his firm has a distribution center in Culpeper, making it easy to supply nearby areas.
He declined to be more specific about why Embassy would bid for one school contract but not another.
Powers said his dairy has not been contacted by any law enforcement agencies, but would cooperate if it is.
Virginia law allows the state to seek civil damages in antitrust cases, leaving criminal prosecutions to the Justice Department.
by CNB