Pet Inc. to Plead Guilty in Plot to Fix Milk Prices

Pet Inc. has agreed to plead guilty to conspiring to fix bidding prices on milk contracts with schools in four states, federal prosecutors said Monday.

The St. Louis-based company agreed to plead guilty to charges that it conspired with other unidentified companies in the 1985-86 school year to submit artificially high bids for a milk contract with Lexington School District 4 in South Carolina, U.S. Atty. Bart Daniel said.

The bids were designed to ensure that Pet would win the district’s contract.

Pet also has agreed to plead guilty to similar charges for school districts in Hall County, Ga.; Alamance County, N.C., and the city of Hampton, Va.

The company will pay a $3.5-million fine in connection with the cases, said James M. Griffin, assistant chief of the Atlanta office of the Justice Department’s antitrust division.

Beatrice Miller, a spokeswoman for Pet in St. Louis, said the company would have no comment on the charges.

The Lexington School District paid more than $330,000 for its milk contract in the 1985-86 school year, Griffin said. The district probably paid about 1/2 cent to 2 cents extra per half-pint of milk because of the high bids, Griffin said.

Daniel and Griffin said the investigation into bid-rigging on milk contracts in the state and the Southeast is continuing.

Daniel refused to identify the other companies involved.

Griffin would not discuss the case against Pet, but said that in similar cases, companies would get together to decide which one would be the low bidder.

The other companies would then agree to bid higher prices with the district. Pet sold its dairy division in 1985, Daniel said.

South Carolina Atty. Gen. Travis Medlock said Monday that he will pursue civil cases against all companies accused of rigging bids.

He said he is also looking at milk bids from 1985 to 1989.