HARTFORD, Conn. – A national milk processor and the New England states announced an antitrust settlement Monday that state officials said would prevent the company from dominating the region’s milk market.

Attorneys general from Connecticut, Massachusetts, Rhode Island, Maine, Vermont and New Hampshire were investigating Suiza Foods Corp. for “anti-competitive problems” raised by an agreement between the company and the Stop & Shop Supermarket Co. – New England’s largest grocery chain.

Under the settlement agreement filed in U.S. District Court here Monday, Suiza – the nation’s largest dairy processor – will offer 30 million gallons of its New England milk-processing capacity per year, for five years, to its competitors.

“Suiza’s agreement to offer milk to its competitors at a reduced rate is an innovative, first-of-its-kind solution in resolving antitrust concerns,” said Connecticut Attorney General Richard Blumenthal.

“Suiza will continue to have a major share of the New England market, but not the stranglehold or supreme dominance that it would have exercised,” Blumenthal said.

“This settlement makes clear that we will be vigilant in enforcing antitrust law in this industry as in any other,” said Maine Attorney General G. Steven Rowe.

Suiza officials said they were pleased the investigation had ended.

“This settlement will allow us to continue our normal business activities throughout New England,” said Michelle Goolsby, Suiza’s executive vice president and general counsel.

The states said Suiza’s proposed acquisition of Stop & Shop’s milk-processing facility in Readville, Mass., would have given the processor an unfair advantage in a market it already dominates.

The Dallas-based company has purchased several processing plants in New England since 1997 and processes nearly 60 percent of the milk supply in the region, Blumenthal said.

Under a February 2000 agreement with Stop & Shop, Suiza would have supplied the chain with private-label dairy products; Stop & Shop also would have been prohibited from carrying certain other branded dairy products.

The settlement halts the sale of the plant and bars any agreement limiting brands of dairy products Stop & Shop can sell.

In addition, the attorneys general must be notified before any future acquisitions or plant closures in New England are made by Suiza. They also must approve the sale of the Readville plant to any other buyer.

“Suiza is really becoming the 800-pound gorilla as part of its acquisition campaign of milk-processing plants in New England,” Blumenthal said. “This settlement stops its stranglehold on the market.”

A Stop & Shop spokeswoman said the grocery chain was pleased the issue was resolved and is looking for another buyer for the Readville plant.

Suiza has agreed to buy rival Illinois-based Dean Foods Co., the No. 2 U.S. dairy processor, for $1.5 billion, although the deal would need approval by antitrust regulators.