FTC Challenges Proposed Sysco-US Foods Merger  

The Federal Trade Commission (FTC) has filed an administrative complaint
arguing that a proposed merger of US Foods and Sysco would violate antitrust
laws, resulting in higher prices and diminished service for the companies’
customers. In re Sysco Corp., No. 9364 (FTC, filed February 19, 2015).

The complaint asserts that a merger of Sysco and US Foods, the largest
broadline foodservice distributors in the United States, would account for 75
percent of the national market for broadline distribution services. The sale of
11 US Foods distribution centers to another distributor would not counteract
the significant competitive harm caused by the merger, FTC argues. “This
proposed merger would eliminate significant competition in the marketplace
and create a dominant national broadline foodservice distributor,” Debbie
Feinstein, the director of FTC’s Bureau of Competition, said in February 19,
2015, press release. “Consumers across the country, and the businesses that
serve them, benefit from the healthy competition between Sysco and US
Foods, whether they eat at a restaurant, hotel, or a hospital.” See FTC Press
Release, February 19, 2015.

Issue 556