Wednesday, July 23rd, 2014

Government interference led to Golden Guernsey closure

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Government interference led to Golden Guernsey closure

Van Hollen not a milk market expert

Waukesha Freeman Opinion Page a6  1/10/2013

Sometimes we just have to ask, “And how did it work out for you?”Untitled

Shortly before Christmas, I had the two children in the car driving around looking at the Christmas decorations. We had just finished buying a present for the Lovely Doreen from Waukesha and we still had some time to kill while some presents were being wrapped at home for Santa to deliver Christmas morning.

I had to take the kids over to the Golden Guernsey dairy to show them the giant cow with the Santa hat on top. The kids loved it. I promised to circle around so we could get a good photo, but we never made it back.

Had we known what was to follow, I don’t think I would have bothered. The festive hat now looks like a slap in the face to the workers who, without warning, were suddenly locked out of a job by the dairy’s owners based in California.

California can run all the television ads they want claiming that the milk in California tastes better because it comes from happy cows, but the milk will have a bitter taste now.

I have no doubt Mayor Jeff Scrima is telling the truth when he says the plant closing caught him completely unaware. Perhaps he should have been more attentive to the matter, given the recent purchase of the dairy by an out-of-state company.

Maybe if the giant cow played a fiberglass guitar and blocked traffic downtown, the mayor would not have been caught by surprise by the plant closing. However, even if Scrima had known, what could he have done about it? And he is certainly not responsible for the decision to close the plant.

But there was one Wisconsin politician who had a more direct role in the sale of the dairy plant to the firm in California. Wisconsin Attorney General J.B. Van Hollen was part of the effort to force Dean Foods to sell the milk processing plant because they had too big of a share of the milk market in Wisconsin, Illinois and the Upper Peninsula of Michigan.

In a press release issued in March 2011, Van Hollen told Wisconsinites, “Selling the Waukesha plant will introduce another competitor capable of serving grocery stores, convenience stores, schools, and other milk retailers throughout Wisconsin.”

So how did that work out, J.B.?

We went from a milk processing plant that employed Wisconsin workers and supplied Wisconsin schools and grocery stores with milk to a locked-up plant with extra guards brought in to shoo away anyone who wanted to know what happened.

Fortunately, Dean Foods still has other plants to serve the customers suddenly short of milk deliveries. So much for cutting into Dean Foods’ market share.

Instead of introducing a new competitor, the forced sale resulted in less milk production. Wisconsin workers are unemployed. Retailers are scrambling to find suppliers.

Guess it didn’t work out like the state Justice Department planned.

When local radio host and fellow Waukesha Freeman columnist Mark Belling raised the issue of Van Hollen’s involvement in the forced sale of the plant, the attorney general’s office issued a terse statement. They told Belling that any attempt to connect the plant closing with the antitrust action by Van Hollen’s office “ignores the facts.”

OK, Van Hollen did not make the business decisions that ran the plant from day to day. He also did not make the decision to close the plant.

However, Van Hollen and his office did think they knew enough about the dairy market that they could determine what was best for Wisconsin’s milk market. It was Van Hollen who said that the sale would result in more competition, and it was Van Hollen who said that new competitor would be able to serve the plant’s customers. Van Hollen was wrong.

If there is a lesson here, it’s that the government does not have a crystal ball to predict what will happen in the market. The hubris of an elected official, even a Republican attorney general, that believes he can see into the future and dictate the market for any product is the pride that goes before the fall. Unfortunately, 112 employees and Wisconsin’s consumers paid the price this time.

(James Wigderson is a blogger publishing at http://www.wigderson.com and a Waukesha resident. His column runs Thursdays in The Freeman.)

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