A US federal appeals court has reinstated an antitrust case against Texas-based food and beverage company Dean Foods Co. The said case alleged that Dean Foods conspired to restrict competition for bottled milk in the southeast United States.

According to Reuters, Cincinnati's US 6th Circuit Court of Appeals found on Friday that a lower court erred when it ruled a class of retailers could not establish proof of their injuries or the relevant geographic antitrust market. The court remanded the case to the district court for further proceedings.

The case stems from the 2001 merger between Suiza Foods Corp., then the largest US milk processor, and Dean Foods. As part of the agreement, the merged company also known as Dean Foods divested assets to steer clear of antitrust concerns by the US Justice Department, the report said.

The divested assets then helped create a new competitor called National Food Holdings. The class action, led by grocery store company Food Lion LLC and local businessman Fidel Breto, alleged that Dean Foods and National Dairy Holdings entered into a conspiracy not to compete in states throughout the Southeast, Reuters said.

US District Judge J. Ronnie Greer of Greeneville Tennessee dismissed all five counts of the retailers' complaint, the report said.