TALLAHASSEE --- Saying the deal would reduce competition and lead to higher prices, federal antitrust officials Tuesday filed a lawsuit to try to block U.S. Sugar Corp. from purchasing another large player in the sugar industry.
The U.S. Department of Justice filed the lawsuit in federal court in Delaware, arguing that the combination of Clewiston-based U.S. Sugar and Imperial Sugar Co., would hurt customers in the Southeastern United States.
“This is a straightforward case: the merger of two direct competitors that will result in a highly concentrated market and lead to higher prices for a product that is vital to our country’s food supply,” the 27-page lawsuit said. “Simply put: This case is not a close call.”
U.S. Sugar announced in March that it had reached an agreement to purchase Imperial Sugar, which operates a sugar refinery in Savannah, Ga., from Louis Dreyfus Co. The lawsuit Tuesday said U.S. Sugar would purchase Imperial’s assets for about $315 million.
In announcing the deal, U.S. Sugar said the purchase would provide customers with a “more dependable, secure supply of sugar.” The announcement said U.S. Sugar would increase production capacity at Imperial’s Georgia plant.
“We disagree with the Justice Department’s decision and fully intend to litigate this matter,” U.S. Sugar said in a statement Tuesday. “The facts will ultimately show that U.S. Sugar’s acquisition of Imperial Sugar will result in increased production and distribution of refined sugar, provide a more secure sugar supply for American farmers, food producers and consumers and protect American jobs. This transaction will improve supply chain logistics and will not result in higher prices or any harm to customers and consumers. We look forward to making our case in court.”
But Jonathan Kanter, assistant attorney general of the Justice Department’s Antitrust Division, said in a statement Tuesday that the deal would “further consolidate an already cozy sugar industry.”
“This deal substantially lessens competition at a time when global supply chain challenges already threaten steady access to important commodities and goods,” Kanter said. “The department’s lawsuit seeks to preserve the important competition between U.S. Sugar and Imperial Sugar and protect the resiliency of American domestic sugar supply.”
U.S. Sugar, long a major player in Florida business and political circles, farms more than 200,000 acres and operates a milling and refining facility in Clewiston. The lawsuit said U.S. Sugar and three other refiners make up a cooperative, United Sugars Corp., that markets and sells sugar. Other refiners in the cooperative have facilities in Minnesota, Montana, North Dakota, and Wyoming.
The lawsuit alleges that if U.S. Sugar’s purchase of Imperial is completed that United Sugars Corp. and American Sugar Refining, a company known by its Domino brand, would account for about 75 percent of sugar sales in the Southeast.
