The Justice Department filed a lawsuit Tuesday to block major sugar manufacturer U.S. Sugar from acquiring one of its biggest competitors.
The suit, filed in Delaware, comes eight months after U.S. Sugar announced it had reached a deal to acquire Imperial Sugar Company, the Associated Press reported.
In July, President Joe Biden signed an executive order calling the Justice Department and Federal Trade Commission to strongly enforce their antitrust efforts. Justice Department officials said this strong enforcement aims to ensure a fair and competitive market.
Assistant Attorney General Jonathan Kanter, who leads the Justice Department's antitrust division, told the AP the companies were "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," he said.
U.S. Sugar denied this and said it plans to fight the lawsuit. In a statement, the company argued that the merger would increase production and distribution and provide a more secure supply.
"This transaction will improve supply chain logistics and will not result in higher prices or any harm to customers and consumers," the company said. "We look forward to making our case in court."
For more reporting from the Associated Press, see below.
The Justice Department disagreed. It says the proposed acquisition would "further consolidate an already concentrated market for refined sugar." It would cut down on competition, leaving only the new consolidated company and one other major sugar company selling a significant share of refined sugar in the southeastern U.S., the Justice Department contends.
The Justice Department says U.S. Sugar, which operates a large refinery in Florida, sells all of its sugar through a marketing cooperative known as the United Sugars Corporation. Imperial Sugar operates a refinery in Savannah, Georgia, and a sugar transfer and liquidation facility in Ludlow, Kentucky.
"Robust antitrust enforcement is an essential pillar of the Justice Department's commitment to ensuring economic opportunity and fairness for all," Attorney General Merrick Garland said in a statement. "We will not hesitate to challenge anticompetitive mergers that would harm American consumers and businesses alike."
The companies announced the acquisition in March, saying that it would return Imperial Sugar to all-American ownership. Imperial Sugar is a subsidiary of Louis Dreyfus Company, which is headquartered in the Netherlands. The Justice Department says Imperial Sugar's revenues were over $700 million in 2020.
When the acquisition was announced, the companies said it would help expand production and reduce manufacturing costs and would increase the security of the U.S. sugar supply. The companies also said a new combined company would offer better competition and expand distribution in the U.S.
Representatives for Imperial Sugar did not immediately respond to requests for comment.
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
