DOJ Fails to Stop Big Sugar Consolidation
A recent article published in Time Magazine accurately captured the failed attempt by the Department of Justice to block the sale of Imperial Sugar to US Sugar. The article entitled, “How a USDA Analyst Helped Stymie the Biden Administration’s Bid to Block a Sugar Merger” says it all.
Swayed by the testimony of a USDA economist, the judge ignored common economic sense to allow a deal that will inevitably lead to higher sugar prices and thus higher costs of food for the US consumer.
This new company (Imperial & U.S. Sugar) will control roughly 75% of the sales in the Southeastern United States. This concentration of sales creates a certainty in either same or higher prices (prices are at a 70 year high now) in the future. The belief that less competition creates better pricing for consumers is completely incongruent with economic reality. Because of the framework around the supply of sugar in the United States (finite) this new combined entity (Imperial and U.S. Sugar) will now also control a good portion of the supply, further prohibiting competition, nearly insuring higher prices. Beyond this, the combined company will yield significant competitive purchasing power of critical services and materials from suppliers to the industry.
Good data beats the “opinion of friends”. The USDA offered no analysis regarding the direction of prices which defies economic practice in an agency responsible for assessing economic impacts. The belief that the USDA has the ability to manage sugar pricing to prevent higher costs in the future is laden with hypocrisy with prices at a near all-time high. What the U.S.D.A. has demonstrated with the testimony in this case and other recently actions, is the ability to continue its preferential treatment path to Big Sugar and squelch competition and innovation for the benefit of a few and at the expense to every other American.
Though understandably troubled by this anti-competitive and inflationary action, CSC Sugar and Sugaright will face these headwinds by continuing to offer high quality, efficiently produced liquid sugar to the food industry.