A food conglomerate partly owned by asset manager BlackRock acquired a privately-owned company that small restaurant owners have long relied on to supply them.
Sysco announced Monday that it had reached a $29 billion deal to acquire Jetro Restaurant Depot, which has 166 stores in 35 states and had previously been owned by its 94-year-old founder, Nathan Kirsch, according to the Wall Street Journal (WSJ). Observers instantly blasted the deal as a monopoly and detrimental to Restaurant Depot’s primary clientele: small business owners who run standalone, non-chain restaurants.
“Together, Sysco and Jetro Restaurant Depot will enhance value for small independent restaurants and the consumers they serve by expanding access to more affordable, fresh food products and delivering more choice and convenience,” Sysco CEO Kevin Hourican said via a Monday press release.
The release described Restaurant Depot as “a leading U.S. wholesale Cash & Carry foodservice provider serving smaller, independent restaurants and businesses seeking high-quality food at low prices.”
“For decades, Restaurant Depot has been the great equalizer for independent restaurants — the place where a small operator could walk in and get the same price as everyone else, no contract, no negotiation, no leverage required,” Erika Polmar, Executive Director of the Independent Restaurant Coalition told the Daily Caller News Foundation in a statement.
“Sysco’s acquisition of Restaurant Depot doesn’t just limit competition, it changes the playing field entirely in Sysco’s favor, leaving independent restaurants with fewer real choices. Independent restaurants are already fighting every single day against rising costs and shrinking margins,” Polmar added. “Handing the nation’s largest food distributor a monopoly over the wholesale staples channel is a gut punch to every neighborhood restaurant in America, and the FTC [Federal Trade Commission] has both the authority and the obligation to stop it.”
“This isn’t a small deal. Restaurant Depot is where most mom & pop restaurants go to buy inventory because Sysco is so expensive,” restaurant owner and former Republican Virginia State Senate candidate Matt Strickland wrote in a Tuesday X post that went viral.
“Restaurant Depot was privately owned. Sysco is owned by… you guessed it, BlackRock & Vanguard,” he added. “This should be an anti-trust violation, but we have politicians that work for Big Corp, not us.”
Sysco, which even before the deal was the largest foodservice company in the U.S., is a publicly held corporation with its two biggest shareholders being asset management firms The Vanguard Group and BlackRock, according to Yahoo Finance. Vanguard has a 13.01% stake in the company while BlackRock has a 8.43% stake.
Congressional Republicans investigated both asset managers in 2023 for their environmental, social and governance (ESG) efforts, which lawmakers said may have run afoul of federal antitrust laws.
The Department of Justice (DOJ) Antitrust Division did not respond to the DCNF’s request for comment.
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