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A Cache County producer of imitation lowfat dry milk is accusing Utah agriculture officials of an untruthful, nationwide campaign to discredit its product and is seeking $12 million in direct damages.

In a lawsuit filed in 3rd District Court, Meadow Fresh Farms Inc., Smithfield, says state officials attacked its product because it posed a threat to the dairy industry.According to the suit, the "malicious" campaign began in 1981 with an evaluation of its product by Utah's departments of agriculture and health through a Utah State University analysis.

The state agencies issued a policy statement calling the Meadow Fresh dry milk dangerously high in sodium, high in calories and sugar, low in calcium and expensive. A subsequent news release issued by those agencies warned consumers that the imitation milk posed a health risk.

Meadow Fresh says in its suit that the state's analysis was wrong because inspectors didn't add enough liquid to the dry milk, "which caused the test samples to be overly concentrated."

The agencies "used improper testing procedures, inaccurate and outdated control data, faulty procedures, and performed testing without independent verification in a negligent and unreliable manner," the suit says.

Agriculture officials also informed the public that the imitation milk does not contain significant amounts of vitamin C and iron, the suit says, but they failed to mention that milk doesn't either.

Utah's evaluation was distributed to more than 200 college extension services, and its news releases were disseminated by newspapers and television and radio stations throughout the nation, the suit said.

"All this was done in a coordinated campaign to promote traditional dairy products by discrediting the nutritional value of a competing product," Meadow Fresh said.

The state agriculture department is directly involved in the promotion of dairy products, yet failed to disclose the conflict of interest, the company said.

Named in the suit are Utah State University; Utah Department of Agriculture; Utah Department of Health, Utah Division of Family Health Services; Von T. Mendenhall, a USU extension services food science specialist; Archie Hurst and Claudia Clark, agriculture employees; Nancy G. Robinette, a health department employee, and 20 John Does.

Consumers look to the state regulatory agencies for guidance when evaluating food products, which gives those agencies the power "to destroy the reputation, good name and public acceptance of new and unique food products," the suit said.

The Smithfield company said the distorted evaluation "has so totally saturated the United States that Meadow Fresh sales have dramatically diminished and its product has been permanently discredited."

The suit seeks an injunction against further dissemination of the state's report, a retraction of the report, $12 million in actual damages and other punitive and consequential damages to be determined by the court.