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Sugar, corn syrup face off over 'natural' lawsuit claims

Posted On: Nov. 4, 2015 12:00 AM CST

Sugar, corn syrup face off over 'natural' lawsuit claims

(Reuters) — Big sugar processors are set to take on major corn refiners including Archer Daniels Midland Co and Cargill Inc before a U.S. jury on Wednesday in a billion-dollar lawsuit that could shape how consumers view two bitter foes in the sweetener market.

Several sugar refiners including global leader ASR Group sued in 2011, alleging that a corn trade group's ad campaign describing high fructose corn syrup as "corn sugar" and "natural" was false. The corn refiners countersued, saying the Sugar Association falsely claimed in its newsletter that corn syrup causes obesity and cancer.

The case, which is scheduled for opening statements on Wednesday in federal court in Los Angeles, comes amid a decline in sweetener demand. The U.S. slowdown is due in part to concerns about high rates of obesity and diabetes.

The U.S. Food and Drug Administration in 2012 ruled that corn syrup, used to sweeten foods including soda, could not be called sugar. The sugar growers are seeking $1.1 billion in compensatory damages over the prior advertising campaign, plus punitive damages and fees, their attorney W. Mark Lanier said.

The corn refiners are seeking about $530 million in their countersuit.

Asked if a negative verdict would materially impact ADM, spokesman David Weintraub said the company has "ample flexibility to handle any range of situations" with access to $6.4 billion of short-term liquidity.

The sugar processors in their lawsuit argue that corn syrup is a man-made product composed almost entirely of dextrose, while sugar is natural sucrose found in cane and beet plants.

Corn refiners launched an advertising campaign in 2008 calling syrup "corn sugar," and saying it is natural and "nutritionally the same as table sugar." The sugar processors' lawsuit said those statements are false.

In their countersuit, ADM and corn refiners said that sugar and corn syrup are nutritionally equivalent.

"The Sugar Association preys on consumers' fears by falsely representing that HFCS will cause obesity, cancer, and cirrhosis of the liver," the counterclaim said, "while at the same time creating a health halo for processed sugar."

Corn refiners say sugar growers benefit from generous U.S. government subsidies. The Corn Refiners Association, one of the defendants, said earlier this year it had hired a Washington lobbyist to challenge sugar's protected status.

The trial is expected to last about three weeks.