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Ohio Joins Challenge of Sysco and US Foods Merger

2/19/2015

(COLUMBUS, Ohio)—Ohio Attorney General Mike DeWine today announced that his office has joined the Federal Trade Commission and the attorneys general of nine other states and the District of Columbia in challenging the proposed merger of Sysco and US Foods — the nation’s two largest food distributors.

In a complaint filed today to block the merger, the FTC and attorneys general cite antitrust concerns, saying that if the merger goes forward as proposed, foodservice customers, including restaurants, hospitals, hotels, and schools, would likely face higher prices and diminished service.

“If an industry’s top two competitors merge, it reduces competition and creates the potential for higher prices in that industry,” Attorney General DeWine said. “We don’t want institutions like schools, hospitals, and restaurants to have fewer food delivery options which would lead to higher prices.”

Foodservice distribution companies like Sysco and US Foods deliver food products to restaurants, bars, taverns, supermarkets, chain stores, hotels, schools, hospitals, military facilities, corrections facilities, and other institutions.

Sysco and US Foods are the number one and number two food service distribution companies in the United States. They also are considered broadline distributors, meaning they carry a large range of products to a wide variety of customers. In some parts of the country (though not in Ohio) Sysco and/or US Foods are the only available broadline distributors.

According to the FTC’s complaint, a combined Sysco/US Foods would account for 75 percent of the national market for broadline distribution services.

Sysco and US Foods announced their plans to merge on Dec. 9, 2013.

In response, the Federal Trade Commission, Ohio, and several other states conducted a year-long investigation to determine how the merger would impact competition in the foodservice industry and affect manufacturers, business owners, and consumers.

The agencies determined that the merger would substantially reduce competition in the industry, opening the door for higher prices and fewer or no options for restaurants and other customers of foodservice distributors.

Today’s complaint, filed in the US District Court for the District of Columbia, seeks a preliminary injunction to stop the transaction, pending the outcome of a related FTC administration action.

Joining the FTC in its federal court action to stop the merger are the attorneys general of Ohio, California, the District of Columbia, Illinois, Iowa, Maryland, Minnesota, Nebraska, Pennsylvania, Tennessee, and Virginia.

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Media Contacts

Dan Tierney: 614-466-3840
Kate Hanson: 614-466-3840

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