December 1, 2011 / 3:04 PM / in 6 years

Supreme Court to hear corn syrup price-fixing

(Reuters) - Canada’s Supreme Court said on Thursday it will hear a case that alleges producers of high-fructose corn syrup, including U.S. agribusiness giants Cargill Inc and Archer Daniels Midland Co, conspired to fix the sweetener’s price.

The case involves efforts to set up a class action lawsuit. It was brought by Sun-Rype Products Ltd, a Canadian juice and fruit-snack company based in British Columbia, and by a consumer representing potential individual claimants.

The decision to hear the appeal signals at least a partial defeat for the producers, since it keeps alive the prospect of individual consumers, who are considered indirect purchasers, joining the class action. However, the Canadian high court also agreed to hear appeals by the grain companies of aspects of lower court decisions.

“Cargill is pleased with the court’s decision,” said Cargill spokeswoman Nicole Reichert. “We have always believed the lawsuit to be frivolous and without merit.”

The case was launched in 2006 and relates to transactions in the 1990s.

Sun-Rype Chief Financial Officer Don VanderZwaag and a spokeswoman for ADM declined to comment on the case. Lawyers representing consumers and some other producers could not be reached for comment immediately.

The United States is the biggest consumer and manufacturer of high-fructose corn syrup (HFCS), and soft-drink makers are the largest users.

The sweetener was added to beverages such as Coca-Cola in the early 1980s. But U.S. food makers have been edging away from it in recent years, returning to sugar in some products after studies linked corn syrup to obesity.

HFCS has regained market share recently amid surging sugar prices. Mexico and Canada are big importers of HFCS.

In 2004, an Illinois court ordered a settlement of a corn syrup price-fixing class action that dated back to 1995. Cargill agreed to the settlement but said it conducted no illegal activity.

In a 1996 settlement with the U.S. Justice Department, ADM agreed to pay $100 million for fixing the prices of two smaller products, lysine and citric acid.

The case is Sun-Rype Products Ltd. et al. v. Archer Daniels Midland Company et al. (B.C.) (Civil) (By Leave) (34283).

Reporting by Rod Nickel and Randall Palmer in Toronto; additional reporting by Christine Stebbins and Karl Plume in Chicago; Editing by Peter Galloway

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