US lawsuits to stop the merging of sugar say it will hurt competition

US lawsuits to stop the merging of sugar say it will hurt competition

Washington The Justice Department filed a lawsuit on Tuesday seeking to block a major US sugar maker from taking over its rival, arguing that allowing the deal would hurt competition and consumers.

The lawsuit was filed in federal court in Delaware. This comes about eight months after the US Sugar Company announced that it had reached an agreement to acquire Imperial Sugar Company, one of the largest sugar refineries in the country.

The lawsuit is the latest example of the Justice Department’s approach to strict enforcement of federal antitrust law that officials say is aimed at ensuring a fair and competitive market. It comes months after President Joe Biden signed an executive order that called on the Department of Justice and the Federal Trade Commission to aggressively enforce antitrust laws and promote competition in the marketplace.

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“Antitrust enforcement is a fundamental pillar of the Department of Justice’s commitment to ensuring economic opportunity and justice for all,” Attorney General Merrick Garland said in a statement. “We will not hesitate to challenge anticompetitive mergers that would harm US consumers and businesses alike.”

The Department of Justice argues that the proposed acquisition would “boost an already concentrated market for refined sugar.” It will reduce competition, and leave the new consolidated company and only the other major sugar company selling a significant share of refined sugar in the southeastern United States, the Department of Justice asserts.

The US Department of Justice says the American Sugar Company, which operates a large refinery in Florida, sells all of its sugar through a marketing cooperative known as the United Sugar Corporation. Imperial Sugar operates a refinery in Savannah, Georgia and a sugar processing and refinery facility in Ludlow, Kentucky.

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Assistant Attorney General Jonathan Kanter, who leads the Justice Department’s antitrust division, said the companies “seek to further strengthen the already comfortable sugar industry.”

“Their merger will eliminate the fierce competition in the supply of refined sugar, which leads to lower prices, better quality and more reliable service,” he said.

The companies announced the acquisition in March, saying it would return Imperial Sugar to full US ownership. Imperial Sugar is a subsidiary of Louis-Dreyfus Corporation, which is headquartered in the Netherlands. The Department of Justice says Imperial Sugar’s revenue exceeded $700 million in 2020.

When the acquisition was announced, the companies said it would help expand production, reduce manufacturing costs, and increase the security of sugar supplies in the United States. The two companies also said the new combined company would offer better competition and expand distribution in the United States

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Representatives of the two companies did not immediately respond to requests for comment.

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