Federal Judge Blocks Formation Of Foodservice Supply Voltron

(Don Buciak II)

Sysco and US Foods, the two biggest national foodservice suppliers, want to merge, and the meanies at the Federal Trade Commission won’t let them. Regulators think this merger would be bad for the companies’ customers–and their customers are food service institutions ranging from the most humble snack bars to the fanciest restaurants. Last month, the FTC sued to stop the merger, and today a federal judge has issued an injunction blocking it.

If the merger as proposed went through, even after both companies sold off some local distribution centers to competitors, the newly formed USyscoFoods (not its actual proposed name) would control 25% of the foodservice supply business in the United States. That seemed like a lot to the commissioners of the FTC, and it could threaten competition across the industry: even the customers of both companies’ customers.

“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,” the FTC’s Office of Competition said in a statement when commissioners voted to block the merger.

In a statement, Sysco expressed disappointment in the judge’s decision, and said that the company would consider its options, which may include ending the two companies’ courtship.

Federal Judge Halts Sysco-US Foods Merger [Wall Street Journal]

by Laura Northrup via Consumerist