Frost, Nadler Demand Antitrust Investigation Into Sysco’s $29.1 Billion Acquisition of Restaurant Depot Over Threats of Higher Costs for Restaurants

Frost, Nadler Demand Antitrust Investigation Into Sysco's $29.1 Billion Acquisition of Restaurant Depot Over Threats of Higher Costs for Restaurants Frost, Nadler Demand Antitrust Investigation Into Sysco's $29.1 Billion Acquisition of Restaurant Depot Over Threats of Higher Costs for Restaurants

WASHINGTON, D.C.- Today, Congressman Maxwell Alejandro Frost (FL-10) and Congressman Jerry Nadler (NY-12) are calling on the Department of Justice (DOJ) and Federal Trade Commission (FTC) to closely scrutinize Sysco's proposed $29.1 billion acquisition of Restaurant Depot and investigate its potential anticompetitive effects. In the letter sent to the DOJ and FTC, the Congressmen warn that the deal could reduce competition, drive up costs for independent restaurants, and ultimately make dining out more expensive for consumers

Restaurant Depot currently operates 166 locations across 35 states and serves more than 700,000 restaurants and food service operators. As a direct competitor to Sysco, Restaurant Depot provides independent restaurants with an important alternative when purchasing food and negotiating prices.

"Restaurants are already struggling with rising costs, and eliminating competition in food distribution could make the problem worse. If this merger drives up the cost of food for small restaurants, those costs will ultimately be passed on to consumers. Families can't afford another hit to their wallets, and that's why the DOJ and FTC need to closely scrutinize this deal," said Congressman Maxwell Frost (FL-10).

"Soaring food prices are forcing Americans to struggle to put food on the table for their families. The last thing our districts need is another bloated corporation using their unfair market power to raise food prices further. The Department of Justice must take its job seriously by fairly and carefully examining this proposed transaction to ensure that American consumers are protected," said Congressman Jerry Nadler (NY-12), Ranking Member of the Subcommittee on the Administrative State, Regulatory Reform, and Antitrust Committee on the Judiciary.

"Independent restaurants operate on razor-thin margins, and Restaurant Depot gives them an essential alternative to large distributors like Sysco and a critical price benchmark when negotiating with suppliers. If Sysco is allowed to acquire a major competitor, independent restaurants will lose that leverage, face higher food costs, and ultimately have little choice but to pass those costs on to diners. We thank Representatives Frost and Nadler for urging federal regulators to thoroughly investigate this deal before it does lasting harm to independent restaurants and the communities they serve," said Erika Polmar, Executive Director Independent Restaurant Coalition.

The proposed acquisition would eliminate a major competitor to Sysco, the nation's largest food distributor, and could give the company greater leverage over the prices restaurants pay for ingredients and supplies. For independent restaurants operating on already-thin margins, even modest increases in food costs can have significant consequences, including higher prices for customers.

Frost warned that the impact of the merger could extend beyond restaurant owners to consumers and workers. If restaurants face higher costs, they may have little choice but to pass those costs on to customers at a time when families are already cutting back on dining out because of rising prices.

The proposed acquisition could also have implications for independent farmers and growers. Sysco has touted the increased purchasing power that would result from the acquisition, raising concerns about how greater market concentration could affect the prices paid to producers.

Frost is calling on the Department of Justice and Federal Trade Commission to closely examine the proposed acquisition and launch an antitrust investigation into its potential effects on competition, independent restaurants, farmers, workers, and consumers.

Read the full letter here.

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