Dole calls off selling its fresh vegetables division to Fresh Express amid DOJ opposition

Dole canceled a deal to sell its fresh vegetables division to the owner of Fresh Express amid opposition from the Department of Justice.

The produce giant announced in January of 2023 that it would divest the segment to Fresh Express, a subsidiary of Chiquita Brands International, for about $293 million in cash. But Dole said Thursday that it agreed with Fresh Express to terminate the deal after the DOJ said it would “pursue litigation to prevent the transaction.”

“While Dole strongly disagrees with the Department of Justice’s decision and continues to believe that the transaction was pro-competitive and would have unlocked ongoing benefits to customers and consumers, we remain confident that we will have an alternative path forward in the near term that is in the best interests of the Fresh Vegetables Division’s employees, customers, and partners, and the Dole plc shareholders,” the company said in a statement.

In an email to Food Dive, Assistant Attorney General Jonathan Kanter with the Justice Department’s antitrust division said the decision to scrap the deal comes “at a time when food companies are already overcharging Americans for groceries.” 

Kanter added that the merger would have “reduced the number of competitors from three to two and raised grocery prices for food products that are purchased by 85 percent of American households.”

In recent months, President Joe Biden has pressured grocery stores to lower prices and criticized food manufacturers for lowering package contents while maintaining the same price, a practice known as shrinkflation.

When the transaction was first announced, Dole said a sale would allow it to improve its financial position and focus on its core businesses, such as fresh fruit. The fresh vegetables division includes the processing and sale of everything from leaf lettuces and cauliflower to broccoli and asparagus, as well as salads and meal kits.

Fresh Express has a major presence in many areas that Dole fresh vegetables already plays in, such as lettuce and salad kits. This would have allowed the Chiquita division to extract synergies through marketing, production and innovation.

Dole has a few options left with its fresh vegetables division. It could sell to another produce business with a smaller presence in the market that wouldn’t draw antitrust concerns. Dole also could offload it to a private equity firm, or decide to keep it.