NY Lawmaker Urges FTC to Block Sysco's Restaurant Depot Bid Over Price Concerns

New York Assemblymember Michaelle Solages has urged the Federal Trade Commission (FTC) to block Sysco's proposed acquisition of Restaurant Depot, citing concerns about potential price increases for independent restaurants. Regulators previously blocked Sysco's attempt to acquire US Foods.

New York Assemblymember Michaelle Solages has formally requested the Federal Trade Commission (FTC) block Sysco's planned acquisition of Restaurant Depot. Her appeal stems from concerns regarding potential negative impacts on independent restaurants, particularly through increased prices. This action follows Sysco's March announcement of its intent to acquire Restaurant Depot.

Sysco has faced regulatory hurdles before; regulators previously blocked its attempt to acquire US Foods. This history informs current scrutiny. Restaurant Depot currently operates 166 warehouse stores across 35 states, serving over 725,000 independent restaurants and food service operators.

Sysco asserts the acquisition will benefit customers. The company plans to open more than 125 new Restaurant Depot warehouses nationwide within 20 years, stating this will create thousands of jobs. Sysco maintains the transaction will offer greater variety, value, and affordability, not higher prices.

The proposed acquisition raises questions about market competition. While Sysco states Restaurant Depot will maintain its current business and pricing strategy as a separate division, lawmakers express skepticism. The New York State Restaurant Association also notes member concerns about rising costs.

Sysco points to past FTC and court findings that broadline and cash & carry operate in distinct markets, serving different customer bases with distinct modes of distribution. The FTC's antitrust review will weigh these competing claims, assessing the acquisition's potential impact on independent businesses and overall market dynamics.

The FTC's decision will determine the future landscape for food service distributors and independent restaurant supply chains.