Three companies that use granulated sugar have filed antitrust lawsuits against U.S. companies, including United Sugar Producers and Refiners, which markets the commodity for American Crystal Sugar Co., Minn-Dak Farmers Co-op and other companies.
The lawsuits claim that sugarbeet and sugar cane companies have joined together to raise the price of sugar to end-users such as bakeries and restaurants.
Morelos Bakery LLC, St. Paul, Minnesota; Great Harvest Bread Co., Duluth, Minnesota; and Connecticut restaurants WNT LLC and WNT Farmington LLC argue that for more than 80 years the sugar industry has been involved in unfair business practices that have resulted in high prices.
American Crystal Sugar, based in Moorhead, Minnesota, is owned by about 2,800 farmers in eastern North Dakota and western Minnesota. The company has factories in Moorhead, Crookston and East Grand Forks in Minnesota and in the North Dakota towns of Hillsboro and Drayton. About 500 farmers own Minn-Dak Farmers Co-op in Wahpeton, North Dakota.
Besides American Crystal Sugar Co. and Minn-Dak Farmers Co-op, Wyoming Sugar Co., of Worland, Wyoming, and U.S. Sugar, based in Florida, are also members of United Sugar Producers and Refiners, also known as United Sugar Corp., and are named in the lawsuit.
The defendants in the lawsuits filed the week of March 17 also include Cargill Inc. based in Wayzata, Minnesota, and Michigan Sugar, a farmer-owned cooperative based in Bay City, Michigan; and Domino Foods Inc., the marketing and sales subsidiary for American Sugar Refining, which markets cane sugar.
Leaders of American Crystal Sugar Co., United Sugar Producers and Refiners, Michigan Sugar Co. and American Sugarbeet Growers Association did not immediately return messages seeking comment on the case.
The lawsuits list a history of unfairly setting prices, beginning with a lower court ruling in 1936 that found that major refined sugar producers unreasonably restrained trade by practices including creating the Sugar Institute, a trade association that enabled them to promulgate rules.
Under the rules, “defendants agreed to sell, and in general did sell sugar only upon open prices, terms and conditions publicly announced in advance of sales, and they agreed to adhere and in general did adhere without deviation, to such prices, terms and conditions until they publicly announced changes,” the lawsuit filed this week said.
The granulated sugar industry’s interference in the market continues today, the lawsuits claim.
Since at least 2019, the defendants have had an ongoing agreement to artificially raise, fix, stabilize or maintain U.S. granulated sugar prices, the lawsuit said.
The methods the sugar companies used included emailing one another about prices, the lawsuits allege. They also allege that the defendants engage in such conversations in other gatherings.
“For example, the American Sugar Alliance holds an annual symposium sponsored and attended by the Producing Defendant where attendees not only participate in industry discussions, but also informal activities such as golf outings,” the lawsuits said.
The sugar industry lends itself to price manipulation in part because it is highly concentrated and is nearly vertically integrated because the defendants and other sugar producers control most aspects of producing, processing, refining and marketing their commodities, the lawsuit said.
The U.S. Department of Agriculture sugar program, which long has been a source of contention with end-users, is also noted in the lawsuits. The lawsuits repeat the end-users argument that the sugar program, which limits the amount of sugar that can be imported into the United States, protects domestic sugar companies from competition, which results in them setting higher prices.
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