The nation’s largest sugar producers stand accused of violating antitrust law and conspiring to fix prices, according to lawsuits filed in federal court in Minnesota this week.
Cargill, United among sugar companies sued for alleged price-fixing conspiracy
Edina-based United Sugar and Minnetonka-based Cargill are among the defendants in federal antitrust lawsuits.
The Minnesota Star Tribune
March 20, 2024 at 8:10PM
The class-action lawsuits target Edina-based United Sugar Producers and Refiners Cooperative, which includes American Crystal Sugar; Minn-Dak Farmers Cooperative; and Wyoming Sugar.
The lawsuits — brought by Great Harvest Bread in Duluth, Morelos Bakery in St. Paul and a Connecticut restaurant group — also named Cargill, Domino Sugar and Michigan Sugar among the defendants.
“Since at least 2019, the producing defendants have had an ongoing agreement to artificially raise, fix, stabilize or maintain granulated sugar prices in the United States,” the suits alleged.
Monthly sugar price reports Utah-based company Commodity produced facilitated this “conspiracy,” the suits said.
United Sugar called the claims baseless.
“While it is our longstanding practice to not comment extensively on litigation, we believe this case has no merit, and we will vigorously defend ourselves from its baseless accusations,” the company wrote in a statement. “Even so, we will not let it distract us from our mission and our business: delivering the highest-quality sugar to our customers at the best possible prices.”
Cargill also denied the allegations.
“We take pride in conducting our business with integrity. We compete vigorously but do so fairly, ethically and in compliance with the law,” the Minnetonka-based agribusiness wrote in a statement.
The suits join a wave of similar antitrust litigation facing the nation’s largest meatpackers, including Cargill. Those cases accuse the companies of working behind the scenes to control the price of beef, pork and turkey for their benefit, claims the companies deny. Several of the cases are playing out in federal court in Minnesota.
The sugar industry, which a handful of industry giants have long controlled, has faced antitrust scrutiny for decades. A Department of Justice consent decree in 1978 banned sugar companies from communicating about future prices or coordinating on sugar sales.
Minnesota is one of the nation’s top sugar producers and grows more sugar beets than any other state.
The U.S. sugar industry has for a while enjoyed federal protections against international competition by limiting imports. As a result, domestic sugar prices are typically much higher than prices found around the world.
“The disconnect between international and domestic prices stems from subsidies to growers, import restrictions and other regulations,” according to the Federal Reserve Bank of St. Louis. A pound of white granulated sugar is averaging close to $1 in the U.S., according to federal data, while in Canada a bag of sugar at a Walmart in Toronto was going for less than $0.50 per pound on Wednesday.
The lawsuits lay out a scheme involving email communications between sugar company leaders and gathering spots, such as an annual conference, as evidence of price-fixing among suppliers of granulated sugar.
KPH Healthcare Services, a New York company, filed a similar lawsuit in federal court in Manhattan last week.
The lawsuits stem in part from the Department of Justice attempting to block United Sugar’s purchase of Imperial Sugar in recent years.
“United and Domino have for years shared competitively sensitive information — including current pricing, future pricing and sold positions — with one another through intermediaries,” the department wrote in 2022.
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