Justice Department sues to block consolidation in sugar industry

The federal government is seeking to prevent US Sugar, a company that partners with Red River Valley sugar beet growers in marketing sugar, from acquiring a competitor, saying the purchase would raise prices for American consumers.

United States Sugar Corp., also known as US Sugar, is seeking to buy Imperial Sugar Co., including a major refinery in Georgia. The US Department of Justice announced Tuesday, November 23 that it was suing to block this purchase.

US Sugar is part of United Sugars Cooperative of Edina, Minnesota, the marketing cooperative that includes American Crystal Sugar Co. of Moorhead, Minnesota, and Minn-Dak Farmers Cooperative of Wahpeton, North Dakota, as well as Wyoming Sugar Co.

American Crystal Sugar Co. in 1994 spearheaded the creation of United Sugar Corp., now based in Edina, Minnesota, whose members as a group market both beet and cane sugar. One of its members, US Sugar Corp. of Clewiston, Florida, acquires Imperial Sugar Co., which will increase the market share of the group as a whole. Photo taken March 24, 2021 in Moorhead, Minnesota Mikkel Pates/Agweek

A merger could boost United Sugars’ market share from 25% to 32% to 34%, Matt Wineinger, president and CEO of United Sugars, previously told Agweek.

“US Sugar and Imperial Sugar are already multi-billion dollar corporations and seek to further shore up an already comfortable sugar industry,” Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division said in a press release.

The antitrust civil lawsuit was filed in the U.S. District Court for the District of Delaware. United States Sugar Corp. is based in Delaware and is headquartered in Florida, where it operates a large sugar refinery.

The Justice Department argues that a merger between US Sugar and Imperial Sugar would leave only one other competitor, American Sugar Refining, in the southeastern United States.

“We disagree with the Justice Department’s decision and fully intend to pursue this matter in court,” US Sugar said in a written statement. “Facts will ultimately show that U.S. Sugar’s acquisition of Imperial Sugar will lead to increased production and distribution of refined sugar, a more secure sugar supply for U.S. farmers, food producers and consumers, and protect American jobs. This transaction will improve supply chain logistics and will not result in price gouging or harm to customers and consumers. We look forward to making our case in court.”

US Sugar is the largest cane sugar milling and refining facility in the world, according to the Department of Justice statement. US Sugar is one of four member-owners of United Sugars. These members operate nine sugar refineries in Florida, Minnesota, North Dakota, Montana and Wyoming. United Sugars revenue was $1.8 billion in 2020.

In 2020, US Sugar received payments of $533 million from United Sugars, representing the company’s share of United Sugars’ net sales.

Imperial Sugar is part of Louis Dreyfus Company LLC, a Delaware corporation headquartered in the Netherlands. Imperial Sugar has a refinery in Savannah, Georgia, and an intermediate sugar transfer and liquefaction facility in Ludlow, Kentucky. Imperial Sugar’s revenue was over $700 million in 2020.

Louis Dreyfus is one of the largest cane sugar refiners in the world. In 2020, the company had net sales of over $33 billion.

Rachel J. Bradford