Confectioners support DOJ challenge to sugar merger
After the Justice Department announced it has filed a civil antitrust lawsuit to stop United States Sugar Corp. from acquiring its rival, Imperial Sugar Co., the National Confectioners Association, which represents candy companies that use sugar, announced it supports the Justice Department’s move.
The Justice Department 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,” DOJ said.
“Robust antitrust enforcement is an essential pillar of the Justice Department’s commitment to ensuring economic opportunity and fairness for all,” said Attorney General Merrick Garland. “We will not hesitate to challenge anticompetitive mergers that would harm American consumers and businesses alike.”
Christopher Gindlesperger, senior vice president of public affairs and communications for the National Confectioners Association, said in an email, “For far too long, the sugar industry has abused its market power to the detriment of small businesses, manufacturers, and consumers, and this DOJ action is further proof that the U.S. sugar program needs urgent reform. We support this action by DOJ, because, as the global supply chain crisis deepens and the cost of food and other consumer goods goes up, our elected leaders should focus on alleviating pressure on American small businesses and consumers, not making things worse.”
Calling itself “a lead partner of the Alliance for Fair Sugar Policy,” a broader group that represents sweetener users, NCA also tied the case to the U.S. sugar program, which growers defend but users have tried to change for years.
“The mega-processors in question are two of an exclusive group that already benefit from the U.S. Sugar Program – a complicated bureaucratic mess of price supports, market allocations, quotas, and government guarantees that kills food manufacturing jobs, increases the cost of food, and costs taxpayers about $4 billion per year,” NCA said in the release. “This outdated and outrageous program has not been modernized in 80 years. It is a rigged system that protects a concentrated group of 13 mega-processors at the risk of American small businesses and workers.”
“U.S. Sugar and Imperial Sugar are already multibillion-dollar corporations and are seeking to further consolidate an already cozy sugar industry. Their merger would eliminate aggressive competition in the supply of refined sugar that leads to lower prices, better quality, and more reliable service,” Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division said in the release. “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 said it plans to fight the lawsuit.
“We disagree with the Justice Department’s decision and fully intend to litigate this matter,” U.S. Sugar said in a news release. “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.”
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