WASHINGTON — The Department of Justice has given the Lactalis Group the go-ahead to acquire some Kraft Heinz Co. cheese businesses in the United States, but first Kraft Heinz must complete the divestiture of its Athenos and Polly-O businesses.

“The Antitrust Division is committed to enforcing the antitrust laws in markets that impact Americans’ day-to-day lives,” said Richard A. Powers, acting assistant attorney general of the Justice Department’s Antitrust Division. “This transaction, as originally proposed, would have led to higher-priced and lower-quality feta and ricotta, two popular cheeses that American consumers regularly purchase to feed their families. Today’s settlement will maintain the competition in the sale of feta and ricotta cheeses that would have been lost if the transaction were permitted to go forward without the required divestitures.”

As originally proposed in September 2020, Lactalis would have acquired Kraft Heinz’s natural, grated, cultured and specialty cheese businesses in the United States, the grated cheese business in Canada, and the entire international cheese business, including the Breakstone’s, Knudsen, Polly-O, Athenos, Hoffman’s and Cracker Barrel brands, as well as the Cheez Whiz brand outside of the United States and Canada, for approximately $3.2 billion.

Now, under the terms of the proposed settlement with the DOJ, the parties must divest Kraft Heinz’s Athenos business — including the worldwide rights to the Athenos brand, under which Kraft Heinz sells feta and other products — to Emmi Roth USA Inc. (Emmi Roth) or an alternative acquirer approved by the United States. Emmi Roth is an established cheese supplier based in Fitchburg, Wis. With the divestiture of Kraft Heinz’s Athenos business, Emmi Roth, or an alternative qualified acquirer, will be able to expand its feta cheese sales to grocery stores and other retailers across the United States, the DOJ noted. Emmi Roth agreed to acquire the Athenos brand in early September 2021.

The proposed settlement also requires the parties to divest Kraft Heinz’s Polly-O business — including the worldwide rights to the Polly-O brand, under which Kraft Heinz sells ricotta and other cheeses — to BelGioioso Cheese Inc. or an alternative acquirer approved by the United States. BelGioioso is an established cheese supplier based in Green Bay, Wis. With the divestiture of Kraft Heinz’s Polly-O business, BelGioioso, or an alternative qualified acquirer, will be able to expand its ricotta cheese sales to grocery stores and other retailers in New York and Florida. BelGioioso agreed to acquire Polly-O in September 2021.

The DOJ said the divestitures are to be structured to include the entirety of the Athenos and Polly-O businesses, so as to avoid customer confusion that could have resulted had the brands been used by both Lactalis and the divestiture buyers. The divestitures, including the worldwide rights to the entire Athenos and Polly-O portfolios, also place the divestiture buyers in the position to market and promote all the cheeses sold under these brands, as Kraft Heinz does today, the DOJ noted.

Based in Laval, France, Lactalis Group has expanded its US presence in recent years. The company operates eight plants in New York, Vermont, New Hampshire, Wisconsin, Idaho, Arizona and California. Brands include Président, Galbani, Parmalat, Stonyfield Organic, siggi’s, Karoun, rondele and Black Diamond. The company employs 2,600 in the United States. Its subsidiary, Lactalis American Group Inc., generated natural cheese sales of more than $429 million at retail outlets in the United States in 2020, according to the DOJ.