The multi-billion dollar bid for Sysco to acquire Restaurant Depot has some in the restaurant industry in New York voicing their concerns.
It also has one state lawmaker urging the Federal Trade Commission to get involved.
“Sysco tried to take over another distributor, US Foods, and that merger was denied,” said state Assemblymember Michaelle Solages. “So, we see that this company takes risk and we just want to make sure that we’re protecting the small independent restaurants that exist in New York state.”
Earlier this month, Solages sent a letter to the FTC.
It’s after Sysco and Restaurant Depot jointly announced back in March that Sysco would acquire the company.
According to Sysco, Restaurant Depot operates 166 large-format warehouse stores across 35 states that serve more than 725,000 independent restaurants and food service operators.
“We hear every day from hospitality owners across New York who are struggling to keep the doors open,” said a spokesperson for the New York State Restaurant Association. “Everything costs more. It’s death by a thousand cuts, and any change that could negatively impact purchasing is cause for concern. However, we have met with Sysco, and they’ve indicated Restaurant Depot will operate as a separate division, while maintaining its existing business and pricing strategy.”
Assemblymember Solages said Sysco made similar commitments to her office expressing it will not change “Restaurant’s Depot’s business and will not introduce a membership fee or raise prices.”
“At the end of the day, a company could say one thing and do another thing,” said Solages.
In a statement to Capital Tonight, a Sysco Spokesperson said: “We are confident that after closing Sysco and Restaurant Depot will together offer customers and communities greater variety, value and affordability. Restaurant Depot has a successful business model and will continue to operate as a standalone company leveraging Sysco’s expansive supply chain to offer more value options to their customers. This transaction will not lead to higher prices but rather greater value and more options. Also, over the next 20 years we plan to open more than 125 Restaurant Depot warehouses in key markets nationwide, creating thousands of jobs while bringing a broader product range to those communities. Both the Federal Trade Commission and federal court found in 2015 that broadline and cash & carry operate in different markets, serving different customer bases with distinct modes of distribution.”
In her letter to the FTC, Solages said from her understanding the commission must conduct a thorough antitrust review with specific attention to its impact on independent businesses. She’s encouraging the commission to consider all options including blocking or condition this acquisition to protect competition.