On November 22, the Department of Justice filed suit to stop the merger of U.S. Sugar and Imperial Sugar. If consummated, the merger will leave most refined sugar sales in the Southeastern United States in the hands of only two entities: the merged company and its rival, American Sugar (which sells the Domino brand). In announcing its suit, DOJ emphasized that it “seeks to preserve the important competition between U.S. Sugar and Imperial Sugar and protect the resiliency of American domestic sugar supply.”
But will it? What DOJ failed to mention is that even if its suit prevents prices from rising, it will pale in comparison to what our own government does to sugar prices through its meddling. We’re already paying far more than we should, and even missing out on products we might prefer.
An anticompetitive federal scheme has long featured production controls, subsidies, and limits on American sugar imports, and amounts to a government-run sugar cartel. It has made U.S. sugar prices twice as high (and sometimes more) as global market price levels.
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