The Department of Justice filed a civil antitrust lawsuit to stop United States Sugar Corporation (U.S. Sugar) from acquiring its rival, Imperial Sugar Company.
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The complaint, filed in the U.S. District Court for the District of Delaware, alleges that the transaction would leave an overwhelming majority of refined sugar sales across the Southeast in the hands of only two producers.
As a result, American businesses and consumers would pay more for refined sugar, a significant input for many foods and beverages.
According to the department’s complaint, U.S. Sugar operates a large sugar refinery in Florida, and sells all of its refined sugar through United Sugars Corporation (United Sugars), a marketing cooperative owned by U.S. Sugar and three other refined sugar producers.
Imperial Sugar operates its own sugar refinery in Georgia, and sells its refined sugar directly to customers. American Sugar Refining, known more commonly by its “Domino” brand name, is the other producer supplying a significant share of refined sugar in the southeastern United States.
The complaint further alleges that United Sugars and Imperial Sugar compete head to head to supply refined sugar to customers across the Southeast in states stretching from Mississippi to Delaware. This competition has resulted in lower prices, better quality products and more reliable service for customers across the region.
If U.S. Sugar is permitted to acquire Imperial Sugar, Imperial’s production would be folded into the United Sugars cooperative, leaving two significant sugar producers in the region.
As alleged in the complaint, because transportation costs make up a significant portion of the total price customers pay for refined sugar, the nearest sugar producers tend to be a customer’s best competitive options.
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 Domino 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. ■
Under an intense surge of arctic air, Friday morning will begin with the coldest temperatures so far this season across much of the central and eastern U.S. with blustery conditions and a piercing wind chill.