Three household names - General Mills Inc., Mars Inc. and McKee Foods Corp. - have gone to Chicago federal court, claiming top US sugar suppliers worked in lockstep to elevate prices. Their filing centers on two vertically integrated heavyweights, American Sugar Refining Inc. and United Sugar Producers & Refiners, which they say dominate US refining.
According to the suit, the producers fed "competitively sensitive" information on prices and sales to Commodity Information Inc., described as an independent market analyst. Commodity Information then published those details to sugar industry subscribers. The food makers argue that setup created a real-time window into each other's prices, sold positions and go-forward strategies, intensifying the market power already created by long-standing US import limits.
American Sugar Refining pushed back. Spokeswoman Marianne Martinez said Tuesday that the suit, filed Friday, "repackages the same baseless allegations that have been pending for approximately two years. It's simply additional plaintiffs' lawyers peeling away parties who were already represented in the pending litigation. As with the earlier case, the facts don't support their allegations, and we will demonstrate that as we defend this case."
Related cases from other food manufacturers and grocers have been combined in proceedings overseen by a federal court in Minnesota. Last year, the judge allowed antitrust claims to proceed against American Sugar Refining and United Sugar, while dropping claims aimed at some smaller producers. Earlier this year, supermarket operators including Albertsons Cos. and food makers including Mondelez International Inc. lodged similar complaints that also name the sugar suppliers and Commodity Information.
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For years, food makers have complained that US sugar is overpriced, putting a squeeze on items ranging from peanut butter to pasta sauce and pushing some manufacturing beyond US borders. Shoppers also feel it directly at the checkout, including on American Sugar Refining's Domino brand. Contracts for raw sugar landing at US ports frequently change hands at over twice the level of a major global benchmark for export-grade raw sugar.
Plenty feeds into food inflation - fuel spikes and odd weather among them. For sugar specifically, prices have been shaped by a decline in domestic processing capacity and a long-running web of import restrictions. The sector is tightly consolidated, and agriculture more broadly - from eggs to meatpacking - has drawn separate lawsuits and government scrutiny as inflation weighs on voters heading into this year's midterm elections.
If sugar prices or supply dynamics shift because of these cases, costs for sweets, snacks and pantry staples could move with them. General Mills declined to comment on the new suit, while Mars and McKee Foods did not offer an immediate response; still, any lasting shift in sweetener costs tends to surface in shelf prices - and in the performance of brands many portfolios touch through consumer staples exposure.
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