Baldwin, Booker Demand FTC Investigate Sysco–Restaurant Depot Merger, Protect Consumers & Small Businesses From Higher Costs
WASHINGTON, D.C. – Today, U.S. Senators Tammy Baldwin (D-WI) and Cory Booker (D-NJ) are demanding the Federal Trade Commission (FTC) thoroughly investigate Sysco’s proposed $29.1 billion acquisition of Jetro Restaurant Depot, over concerns that the deal could further consolidate the nation’s food distribution system, weaken competition, and drive-up costs for independent restaurants and consumers.
“A single dominant company monopolizing the food distribution system will allow one company unprecedented power to raise prices and reduce purchasing options for independent restaurants. The higher food and supply costs restaurants will likely incur from this merger will almost certainly be passed on to diners, as most of these small businesses operate on the margins of three to five percent even under favorable conditions. Or, these combined pressures could force many independent restaurants to close, resulting in layoffs and an economic loss to their local community,” wrote the senators in a letter to FTC Chairman Andrew Ferguson.
The senators warned that the proposed acquisition would eliminate an important source of competition for independent restaurants, caterers, farmers, and other small businesses. Restaurant Depot’s “cash-and-carry” model — which has no contracts, delivery fees, or minimum orders — provides small businesses with an alternative to traditional broadline distributors like Sysco and allows them to compare prices and purchasing options.
The deal comes as restaurants and consumers continue to face rising costs. According to the National Restaurant Association, menu prices have increased by at least 34 percent since 2020. The senators also raised concerns about the impact of further consolidation on farmers, noting that independent restaurants are often their largest commercial buyers of produce.
The FTC has previously intervened to prevent consolidation in the restaurant distribution industry. In 2015, the Commission blocked Sysco’s proposed acquisition of US Foods, determining that the transaction would significantly reduce competition and likely result in higher prices and lower levels of service for restaurant-goers.
“Sysco’s action represents an effort to vertically integrate the food distribution space and eliminate a competitor price check that helps maintain lower-cost options. We urge the FTC to review this merger to ensure that consumers, farmers, and restaurant owners maintain their independence and competition can flourish,” the senators concluded.
A full version of the letter is available here.
NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.
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