Ag News

Georgia dairy sues Whole Foods for breach of contract

by Georgia Farm Bureau

Posted on Jan 22, 2020 at 0:00 AM

An Augusta-area group of dairies filed suit against Whole Foods for breach of contract, alleging the organic foods retailer failed to purchase an agreed-upon amount of organic milk and then terminated the agreement. The Atlanta Business Chronicle detailed the suit in a story published Jan. 3.

According to the suit, in 2015 Hart Agriculture entered into a supplier contract with Whole Foods Market Group Inc. and its then-supplier AtlantaFresh Artisan Creamery. The agreement called for the grocery chain to purchase 30,000 gallons of milk per week for seven years. Whole Foods was to place its orders with AtlantaFresh, which would then purchase the milk from Hart Agriculture.

Hart allegedly invested more than $1 million to redevelop one of its farms, Newberry Farm near Augusta, to specifically meet the demands of the agreement with Whole Foods. This involved putting into place procedures to meet certification requirements for grass-fed, non-GMO dairy production, including hiring and training personnel, growing more than 12,000 tons of certified non-GMO feed and acquiring and enrolling 800 cows in the certified non-GMO program.

Whole Foods, which operates more than 500 stores in the U.S., Canada and the United Kingdom, fell short of ordering 30,000 gallons of milk per week from the outset, the suit alleges. On Aug. 15, 2017, Whole Foods terminated its supplier agreement with AtlantaFresh. At the same time, was in the process of purchasing Whole Foods, a transaction completed on Aug. 28, 2017. In the months before and after the Amazon/Whole Foods deal, Whole Foods terminated numerous supply arrangements across the country. AtlantaFresh closed in 2018.

Hart says that the termination was without cause, and that at no point during the time milk was being delivered did Whole foods complain about the quality of Hart’s milk, the timeliness of its delivery or any other aspect of the dairy’s performance.

Hart is seeking compensation for lost revenues and profits, lost investment in the redevelopment of Newberry Farm, court costs and attorney fees.

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