The following appeared in a New York Times editorial:
A proposed merger between two of the largest suppliers of food to restaurants, hotels and school cafeterias could significantly reduce competition and drive up prices of the meals Americans eat outside their homes.
Sysco, the country's largest distributor of food, offered to buy its biggest competitor, US Foods, in a deal valued at $8.2 billion. The combined business would control about 25 percent of the total food distribution business in the country.
By reducing meaningful competition, the new company would be able to demand higher prices of restaurants and cafeterias. Sysco and US Foods have argued that the merged company will be able to offer more products in more parts of the country.
That will mean little to restaurant owners, who depend on the competition between the companies to keep costs down. The merger will be particularly damaging to independent restaurants that do not have the power of chains to negotiate lower prices and guaranteed supplies.
The harm will be greatest in places where the companies' operations overlap. In some states, the combined company would own more than half of the big distribution centers, according to an analysis by Food & Water Watch, a Washington-based research group. There is another potential problem. Some restaurants and government agencies have accused food distributors of fraudulently inflating invoices. Such practices could be harder to detect.
The Federal Trade Commission will review the merger. If it finds that it will hurt competition by giving the combined company greater market power, the FTC should consider blocking the deal or requiring the companies to divest parts of their distribution networks.