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Sugar companies say Justice Department is withholding information in merger case

United States Sugar Corp., a Florida company that markets sugar cooperatively with Red River Valley sugarbeet growers through United Sugars, is seeking to purchase Imperial Sugar Co. The U.S. Department of Justice is suing to block the purchase. A U.S. Sugar letter says the Justice Department is withholding correspondence with the U.S. Department of Agriculture.

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U.S. Sugar Corp., a partner in Minnesota-based United Sugars Corp., announced March 24, 2021, that it will purchase the Imperial Sugar Co., including its big port refinery near Savannah, Georgia, shown above.
Courtesy / United Sugars Inc.

WILMINGTON, Delaware — Sugar companies say the Department of Justice is withholding evidence as the federal government tries to block the purchase of Imperial Sugar by U.S. Sugar.

The sugar companies include United Sugars, a sugar marketing partnership involving U.S. Sugar and three sugarbeet processing co-ops — American Crystal Sugar Co., Minn-Dak Farmers Cooperative, and Wyoming Sugar Co. The sugar companies involved in the court battle say in a letter filed in U.S. District Court in Delaware that the Justice Department is withholding correspondence with the U.S. Department of Agriculture.

"These materials, we believe, may contradict DOJ’s allegations that the Transaction will result in harm and, as such, may constitute critical evidence and admissions from the United States. Defendants require these materials in order to depose USDA personnel and cross-examine them at trial," according to the first paragraph of the letter, filed, Thursday, Feb. 3.

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In March 2021, Florida-based U.S. Sugar Corp. announced its plan to purchase Imperial Sugar Co., including Imperial's facility near the port city of Savannah, Georgia, where sugarcane is refined into sugar for consumers. The Department of Justice filed a lawsuit in November 2021 to block the deal, arguing that the merger would hurt competition and consumer options in the Southeast, where U.S. Sugar and Imperial operate.

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Judge Maryellen Noreika in December said a trial should start by the week of April 11.

The Department of Justice filed its lawsuit in Delaware, where Louis Dreyfus Company, the Netherlands-based parent company of Imperial Sugar, is organized. United States Sugar Corporation also is incorporated in Delaware, but has its headquarters in Florida, where it runs a sugar refinery. Minnesota-based United Sugars also is named as a defendant in the lawsuit.

The sugar companies say the correspondence with USDA is key because "USDA’s mandate is to 'manage the program to provide adequate supplies of both raw and refined sugar at reasonable prices,'" the letter says. But the Justice Department argues that it is not obligated to turn over the correspondence.

Reach Jeff Beach at jbeach@agweek.com or call 701-451-5651 (work) or 859-420-1177.
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