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Justice Department sues to block consolidation in the sugar industry

United States Sugar Corp., a Clewiston, Florida, company that markets sugar cooperatively with Red River Valley sugarbeet growers, is seeking to purchase Imperial Sugar Co., including a major refinery in the Savannah, Georgia, area. The U.S. Department of Justice on Tuesday, Nov. 23, announced it is suing to block the purchase that could increase the market share of United Sugars Corp., the Edina, Minn.-based co-op marketing company, from its current 25% market share, to 32% to 34%.

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U.S. Sugar Corp., a Florida marketing partner in United Sugars Corp., of Edina, Minn., announced March 24, 2021, that it will purchase the Imperial Sugar Co., including its big port refinery near Savannah, Ga. This will increase market stability for partner beet cooperatives in the Red River Valley. Photo circa. 2021, courtesy United Sugars Inc. Photo courtesy United Sugars Inc. / Agweek

The federal government is looking to block U.S. Sugar, a company that partners with Red River Valley sugarbeet growers in marketing sugar, from acquiring a competitor, saying the purchase would drive up prices for American consumers.

United States Sugar Corp., also known as U.S. Sugar, is seeking to purchase Imperial Sugar Co., including a major refinery in Georgia. The U.S. Department of Justice on Tuesday, Nov. 23, announced it is suing to block that purchase.

U.S. 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.

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American Crystal Sugar Co. in 1994 spearheaded the creation of United Sugar Corp., now based in Edina, Minn., whose members as a group market both beet and cane sugar. One of its members, U.S. Sugar Corp. of Clewiston, Fla., is purchasing Imperial Sugar Co., which will increase market share for the whole group. Photo taken March 24, 2021, at Moorhead, Minn. Mikkel Pates / Agweek

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

“U.S. Sugar and Imperial Sugar are already multibillion-dollar corporations and are seeking to further consolidate an already cozy sugar industry," Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division said in a news release.

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

The Justice Department contends that a U.S. Sugar and Imperial Sugar merger would leave only one other competitor, American Sugar Refining, in the southeast U.S.

“We disagree with the Justice Department’s decision and fully intend to litigate this matter," U.S. Sugar said in a written statement. "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.”

U.S. Sugar is the world's largest cane sugar milling and refining operation, according to the Justice Department release. U.S. Sugar is one of four member-owners of United Sugars. Those members operate nine sugar refineries in Florida, Minnesota, North Dakota, Montana and Wyoming. United Sugars’ revenues were $1.8 billion in 2020.

In 2020, U.S. 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 liquification facility in Ludlow, Kentucky. Imperial Sugar’s revenues were over $700 million in 2020.

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

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