Oakhurst Dairy, which has been owned by a Maine family since the company was founded in 1921, has been sold to a national cooperative owned by farmers.
Oakhurst was acquired by Dairy Farmers of America, a cooperative owned by more than 8,000 farms in 48 states. The deal, negotiated for about eight to nine months, closed Friday.
The Portland-based company said it will continue to get its milk from the 70 independent Maine farmers who now supply it. Milk products will still be processed and bottled at the company’s plant on Forest Avenue. And Oakhurst’s milk supply will not be mixed with any other products from Dairy Farmers of America, the company said.
None of Oakhurst’s 200 employees – who were told of the acquisition in meetings held early Friday – will be laid off, the company said.
“Oakhurst milk will continue to be Maine’s milk and distributed throughout northern New England,” said Bill Bennett, chairman of Oakhurst’s board of directors. “Nothing has changed but the ownership.”
Farmers who sell to Oakhurst, however, said they are wary about how the sale will affect the employees and the company’s suppliers.
“That is what they always say,” said Tim Leary, whose Leary Farm in Saco sells its milk to Oakhurst. “Any time there is a change, you wonder how things are going to shake out.”
Oakhurst Dairy was founded in 1921, after Stanley T. Bennett bought a dairy on Woodford Street in Portland from the Leadbetter family. A grove of oak trees near that dairy gave Bennett the idea for the company’s name. The dairy is now based at 364 Forest Ave.
While its sole manufacturing facility is in Portland, the company operates three distribution facilities in Maine, New Hampshire and Massachusetts. Oakhurst’s products include milk, cream, sour cream, cottage cheese, egg nog, butter, ice cream mixes, juices, teas and water.
Oakhurst’s annual sales are estimated to be $110 million. Dairy Farmers of America’s sales were $12.1 billion in 2012.
Employees took the news in stride Friday, comforted by the company’s insistence that jobs, products and quality would not change, said Nahum Frank, who works in production at the plant on Forest Avenue.
“Everything stays the same – the quality of the products, the people. Nothing really changes,” Frank said. “We’ll be using the same farmers, working with the same family members and hopefully expanding over the years.”
Cathy Pesce, a customer service worker, said she expects many calls from consumers initially, wondering about potential changes.
“I expect a lot of questions. But as long as they see the Oakhurst name isn’t changing and the product isn’t changing, people will be happy,” Pesce said.
Tim Ahern, a route sales driver for Oakhurst, said he believes the acquisition will be good for the company and give it more financial resources.
“It gives us a lot of clout,” he said.
The decision to sell wasn’t an easy one, Bennett said in a conference call Thursday night with executives from both companies.
“It took a while to make the decision,” he said. “But it was the right time.”
Although Oakhurst is a third-generation family-owned business, Bennett said, his family is growing older and there was no one in line to lead the company on a daily basis.
His brother, John Bennett, and Tom Brigham will continue in their roles as co-presidents of Oakhurst.
About 80 percent of Maine’s businesses are family-owned, according to the nonprofit Institute for Family-Owned Businesses in Brunswick. Less than 30 percent survive to the second generation and less than 13 percent make it to the third generation.
NO SURPRISE TO MOST FARMERS
The news did not come as a shock to Maine’s dairy farmers, although they were united in being sorry to see the end of the family-owned and operated business. Farmers have considered the company good to work with, as it kept standards high and offered regular bonuses for quality product.
“We’re sad to see it change,” said Dale Cole, who runs the Cole Dairy Farm in Scarborough and is president of the Maine Dairy Industry Association. “Nobody likes change.”
But the Bennett family has the farmers’ sympathy.
“It’s a tough business and I know Oakhurst has been struggling,” said Leary, the farmer in Saco.
He described himself as “small potatoes” among the milk producers who have been selling to Oakhurst. Leary has sold 1,200 to 1,400 pounds of milk a day to Oakhurst, and keeps about 45 cows on his farm. Last year, he reduced the size of his herd and began moving his focus to farming vegetables.
Even as he wondered if Dairy Farmers of America will be able to keep its promise not to lay anyone off, Leary was hopeful that the sale could ultimately be a good thing for Oakhurst’s employees and producers.
“They could benefit from the economies of scale,” he said.
BUYER’S PLEDGE: NOTHING CHANGES
Oakhurst will be a wholly owned subsidiary of Dairy Farmers of America. It will continue to operate independently and continue its charity and community work, and maintain its pledge to produce milk with no artificial growth hormones, the company said.
“This was a big decision for our family, but we believe it is what’s best for the future of the company,” Bennett said in a news release. “Farmer-owned Dairy Farmers of America understands the importance of supporting local farmers and our community and has the financial strength to fuel new opportunities for growth and improvements in our Maine and New England operations.”
In 2003, Oakhurst was sued by the agribusiness giant Monsanto Corp., which demanded that Oakhurst stop labeling its milk as free of artificial growth hormones. Monsanto alleged that the label misled consumers into thinking there was something wrong with milk from cows treated with the hormone.
After months of talks, Oakhurst kept the label, but added a disclaimer saying the Food and Drug Administration had found no significant difference between milk from cows that have been treated with the hormone and milk from cows that have not.
Dairy Farmers of America operates as a milk marketing cooperative and dairy processor. In recent years, it has bought several other regional dairy processing facilities and brands, including Guida’s Dairy in Connecticut, Kemps in Minnesota and Dairy Maid Dairy in Maryland.
“The Bennett family has established Oakhurst as a trusted local brand known for its long-lasting commitment to quality, integrity and freshness,” said Alan Bernon, president of Dairy Farmers of America’s Affiliate Division, in a news release. “We are pleased to have them join us and are glad that the Bennett family will continue to manage operations. As a company committed to doing the right thing for their suppliers, customers, employees and community, the Oakhurst and Dairy Farmers of America values align.”
On Tuesday, Dairy Farmers of America paid $158.6 million to settle a lawsuit filed against it and Dean Foods in 2007, alleging that the two companies conspired to eliminate competition in the Southeast and suppress the prices that farmers got for raw milk. The class-action lawsuit, filed by dairy farmers in the Southeast, was scheduled to go to trial Wednesday. Dean Foods settled its portion of the case in July 2012 for $140 million.
Dairy Farmers of America made no admission of wrongdoing in the settlement.
Staff Writer Jessica Hall contributed to this report.
Dennis Hoey can be contacted at 791-6365 or at:
dhoey@pressherald.com
Mary Pols can be contacted at 791-6456 or at:
mpols@pressherald.com
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