Justice ministry sues to block consolidation in sugar industry
United States Sugar Corp., also known as US Sugar, is looking to buy Imperial Sugar Co., including a major refinery in Georgia. The US Department of Justice announced Tuesday, November 23, that it is taking legal action to block the 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, Fla., purchases Imperial Sugar Co., which will increase market share for the entire group. Photo taken March 24, 2021 in Moorhead, Minn. Mikkel Pates / Agweek
A merger could increase United Sugars’ market share from 25% to 32% to 34%, Matt Wineinger, chief executive officer of United Sugars previously told Agweek.
“US Sugar and Imperial Sugar are already multi-billion dollar companies looking to further consolidate an already comfortable sugar industry,” Deputy Attorney General Jonathan Kanter of the Department of Justice’s Antitrust Division said in a press release.
The civil antitrust lawsuit was filed in the US District Court for the District of Delaware. United States Sugar Corporation is headquartered in Delaware and 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 do not agree with the decision of the Department of Justice and fully intend to litigate this case,” US Sugar said in a written statement. “The facts will ultimately show that the acquisition of Imperial Sugar by US Sugar will lead to an increase in the production and distribution of refined sugar, provide a more secure supply of sugar for American farmers, food producers and consumers, and protecting US jobs. This transaction will improve supply chain logistics and not result in higher prices or harm to customers and consumers. We look forward to taking our case to court.
US Sugar is the largest cane sugar crushing and refining operation in the world, according to the Department of Justice statement. US Sugar is one of the 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 company headquartered in the Netherlands. Imperial Sugar has a refinery in Savannah, Georgia, and an intermediate sugar transfer and liquefaction facility in Ludlow, Ky. Imperial Sugar’s revenue topped $ 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 more than $ 33 billion.