November 20, 2015 / 6:33 PM / 5 years ago

UPDATE 2-Sugar vs corn syrup lawsuit settles mid-trial

(Adds quote from attorney for sugar companies)

By Dan Levine

Nov 20 (Reuters) - Major sugar companies and corn refiners, including Archer Daniels Midland Co, have settled high stakes litigation that probed the health claims of each industry amid falling demand for sweeteners.

Terms of the settlement, which was reached in the middle of trial, were not disclosed in a joint statement on Friday.

“The parties had been trying to work on an agreement for a month before trial, and these things take time,” W. Mark Lanier, an attorney for the sugar processors, told Reuters.

A representative for corn refiners declined to comment.

Several sugar refiners including global leader ASR Group alleged in a 2011 lawsuit that a Corn Refiners Association advertising campaign describing high fructose corn syrup as “corn sugar” and “natural” was false. The corn refiners countersued, saying the Sugar Association falsely said in its newsletter that corn syrup caused obesity and cancer.

Trial began earlier this month, and had been expected to be decided by jury in December. While the implications for the companies are unclear, the settlement means consumers will not receive an impartial verdict about which industry’s health claims are more accurate.

The case came amid an overall decline in sweetener demand, particularly of corn syrup. The U.S. slowdown is due in part to concerns about high rates of obesity and diabetes.

Corn refiners argued that sugar processors were not damaged because they enjoyed record sales and profits during the ad campaign. The sugar growers sought $1.1 billion in compensatory damages over the campaign. The corn refiners asked for about $530 million in their countersuit.

The case involved voluminous scientific evidence and heated arguments from both sides, but a joint statement on Friday was neutral about which product is healthier.

Both industries “continue their commitments to practices that encourage safe and healthful use of their products, including moderation in the consumption of table sugar, high fructose corn syrup and other sweeteners,” the parties said.

In 1999, the average American consumed 85.3 lb of corn sweeteners per year, compared with 66.4 lb of sugar, according to U.S. Department of Agriculture data. However, by 2014 corn sweetener consumption had dropped to 60.7 lb, while sugar consumption stood at 68.4 lb.

Overall, the average American consumed 131.1 lb of sweetener in 2014, down from 153.2 lb in 1999.

The U.S. Food and Drug Administration in 2012 ruled that corn syrup, used to sweeten foods including soda, could not be called sugar. (Reporting by Dan Levine in San Francisco; Editing by Grant McCool, Tom Brown and Marguerita Choy)

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