Corn sweetener controversy heads back to the courts
a seven-year-old civil lawsuit that alleges Archer Daniels Midland
and its rivals rigged what is today a $2.4 billion (€2.5bn) market
for the corn sweetener high-fructose corn syrup, used widely across
the food industry.
In the US this week the Seventh Circuit Court of Appeals reinstated a seven-year-old civil lawsuit that alleges Archer Daniels Midland Co . and its rivals rigged what is today a $2.4 billion (€2.5bn) market for the corn sweetener high-fructose corn syrup, used widely across the food industry.
The decision on Tuesday resurrects an ongoing price-fixing scandal that began in the 1990s. In 1996 the US Justice Department ordered a $100 million fine from ADM for fixing the prices of two much smaller products - lysine and citric acid - and, in the same case, a federal jury in Chicago sent three Archer Daniels executives to prison, reports the Wall Street Journal.
"I have no idea about the merits of the case," said David Nelson, an analyst at Credit Suisse First Boston . "But a trial would bring back that taint."
The plaintiffs, a group of about 30 companies that make everything from confectionery and soft drinks to baking goods, are seeking billions of dollars in damages, said Robert N. Kaplan, of Kaplan Fox & Kilsheimer of New York, a lawyer defending the plaintiffs.
According to the WSJ report, the circuit court has not taken sides on the guilt or innocence of Archer Daniels and its rivals but concluded that there is enough evidence for a jury to consider.
A spokeswoman for Archer Daniels, which controls roughly one-third of the high-fructose corn syrup market, said on Tuesday that the company was still studying the decision, and did not comment on whether it planned any appeal.
The news will no doubt dampen company celebrations this week as the agribusiness giant toasts its 100-year anniversary.
