Food

U.S. Sugar-Imperial Sugar deal runs into roadblock



WASHINGTON — The Department of Justice on Nov. 23 filed a civil antitrust lawsuit in the US District Court for the District of Delaware seeking to stop U.S. Sugar Corp.’s proposed acquisition of Imperial Sugar Co. The complaint alleges that the transaction would leave an overwhelming majority of refined sugar sales across the Southeast in the hands of only two producers.

“U.S. Sugar and Imperial Sugar are already multibillion-dollar corporations and are seeking to further consolidate an already cozy sugar industry,” said Jonathan Kanter, assistant attorney general for the DOJ’s Antitrust Division. “Their merger would eliminate aggressive competition in the supply of refined sugar that leads to lower prices, better quality, and more reliable service. This deal substantially lessens competition at a time when global supply chain challenges already threaten steady access to important commodities and goods. 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, a privately held agribusiness based in Clewiston, Fla., entered into a definitive agreement to acquire the business and assets of Imperial Sugar Co. from Wilton, Conn.-based Louis Dreyfus Co. on March 24.

Louis Dreyfus acquired Imperial Sugar in 2012 and currently operates a cane sugar refinery at Port Wentworth in Savannah, Ga., and a sugar transfer and liquidation facility in Ludlow, Ky. The transaction includes Imperial Sugar’s consumer-facing sugar brands sold mainly across the southern United States. Imperial Sugar primarily sources raw cane sugar from Central America, South America and the Caribbean.

U.S. Sugar currently plants, harvests and processes sugarcane into about 800,000 tonnes of refined sugar each year. United Sugars Corp. is the marketing partner of U.S. Sugar and markets both industrial and retail sugar from U.S. Sugar. United Sugars Corp. also will market sugar from Imperial sugar once the transaction is completed. United Sugars also markets beet sugar products from American Crystal Sugar Co., Minn-Dak Farmers Cooperative, both in the Red River Valley, and Wyoming Sugar Co. LLC.

The complaint alleges that U.S. Sugar’s proposed acquisition of Imperial Sugar will further consolidate an already concentrated market for refined sugar. If the transaction is allowed to proceed, United Sugars and American Sugar Refining, known more commonly by its Domino brand name, would control the vast majority of refined sugar sales in the region, enhancing the likelihood going forward that they will coordinate with each other and refrain from competing aggressively, the DOJ noted in its complaint.



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