April 13, 2026

The Honorable Andrew N. Ferguson

Chairman
Federal Trade Commission
600 Pennsylvania Avenue NW
Washington, DC 20580

Chairman Ferguson,

The Independent Restaurant Coalition (IRC) submits this letter on behalf of independent restaurant operators across the United States to urge the Federal Trade Commission (FTC) to conduct a rigorous antitrust review of, and ultimately block the proposed acquisition by Sysco Corporation of Jetro Holdings, the parent company of Restaurant Depot.

The IRC represents hundreds of thousands of independently owned and operated restaurants and bars nationwide. Our members range from single-location neighborhood diners and family-owned ethnic restaurants to regional taverns, food trucks, and community cafeterias. What unites them is their reliance on competitive, accessible, and fairly priced food supply chains — without which they cannot survive. Our members are fearful this acquisition will only drive up costs, especially at a time when so many other costs and fees continue to rise.

This proposed merger is not a routine consolidation. It is an attempt by the single largest broadline foodservice distributor in the United States to acquire and absorb the single largest cash-and-carry wholesale channel in the country. If completed, this transaction would extinguish the most meaningful independent price check that small restaurant operators have on Sysco's own delivery pricing — concentrating control of the nation's restaurant supply ecosystem to an unprecedented degree and creating a dangerously fragile, single-point-of-failure food system.

We urge the Commission to immediately undertake a review of this transaction under its statutory authority. We believe a fulsome review will conclude that this merger is not in the best interest of competition, restaurants, or the public.

Sysco Corporation is the largest foodservice distributor in the United States and one of the largest in the world. With annual revenues exceeding $76 billion, Sysco serves approximately 730,000 customer locations including restaurants, healthcare facilities, educational institutions, and hospitality companies through its broadline distribution model. Its two largest shareholders are The Vanguard Group (approximately 13%) and BlackRock (approximately 8.4%) — institutional investors whose cross-ownership of competing food and distribution companies raises additional competitive concerns.

Prior to this transaction, Sysco controlled roughly 17% of the U.S. foodservice distribution market by revenue, making it far larger than its next-closest competitors, U.S. Foods (approximately 10%) and Performance Food Group (approximately 8%).

Restaurant Depot operates 166 warehouse locations across 35 states and serves more than 725,000 primarily small, independent restaurant operators. Many of these operators are also served by Sysco. Restaurant Depot operates on a self-service, no-delivery model that offers independent operators access to food, paper goods, and kitchen supplies at substantially lower prices than broadline distributors, like Sysco.

For countless independent restaurants, Restaurant Depot is not simply a convenient alternative — it is the most viable low-cost purchasing channel available in their market. Industry analysts have long recognized Restaurant Depot as the primary price benchmark that restrains broadline distributor pricing discipline, keeping Sysco and others honest in their negotiations with small customers.

On March 30, 2026, Sysco announced a definitive agreement to acquire Restaurant Depot for approximately $29.1 billion in a combination of cash and stock. Sysco characterizes the transaction as "transformational" and argues that the two businesses serve distinct customer segments through different distribution models with "minimal overlap." We strongly dispute that characterization, and the analysis below explains why the Commission should as well.

This is not the first time Sysco has attempted to eliminate a major competitor through acquisition. In 2015, the FTC successfully blocked Sysco's proposed $8.2 billion acquisition of U.S. Foods. A t the time, U.S. Foods was the second-largest broadline distributor, and the FTC rightly concluded that the combination would substantially lessen competition and harm independent restaurants and other foodservice customers through higher prices and reduced service quality. A federal court affirmed that the merger would reduce competition, and Sysco ultimately abandoned the deal.

The Commission was right in 2015. The structural logic of that case applies with even greater force here. The current proposal does not merely eliminate a direct rival in a single distribution segment; it consolidates Sysco's control over two distinct but economically interrelated distribution channels, eliminating independent restaurants' ability to use one channel as leverage against the other.

Antitrust law recognizes that competition can be harmed not only when direct rivals merge, but when an acquisition eliminates a credible outside option that disciplines pricing by dominant players. Restaurant Depot serves precisely this function in the foodservice supply market.

For years, Restaurant Depot's existence has imposed competitive discipline on Sysco. When Sysco's broadline delivery prices rise excessively, independent operators can — and do — shift portions of their purchasing to Restaurant Depot's cash-and-carry model. This substitution threat is not theoretical; it is a documented pricing constraint that analysts at Technomic, Foodservice Equipment Reports, and other industry authorities have identified as central to competitive dynamics in the sector.

If Sysco is allowed to acquire Restaurant Depot, that constraint disappears entirely. Sysco will profit from both channels simultaneously, eliminating any incentive to use cash-and-carry pricing as competitive pressure on its own delivery business. The two options that independent restaurants currently play against one another will be unified under a single corporate owner with a single profit motive.

While Sysco's national broadline market share of approximately 17% may appear modest in isolation, the relevant competitive analysis must account for regional market structure. In many major metropolitan areas, particularly in the Northeast corridor, Restaurant Depot warehouses are the dominant or only accessible cash-and-carry option for independent foodservice operators. In these markets, the merger is not merely a reduction in competition; it is effectively the elimination of meaningful competition.

The Commission has consistently recognized that antitrust harm can occur in geographically concentrated markets even when national figures appear diluted. This principle was central to the 2015

U.S. Foods decision and applies with full force here. The IRC urges the Commission to map regional market concentration carefully, particularly in the following contexts:

▪ Metro areas with high densities of independent restaurants but few broadline competitors.

▪ Geographic regions where Restaurant Depot operates the only cash-and-carry locations within practical driving distance.

▪ Markets where Sysco's delivery operations and Restaurant Depot's warehouse locations overlap in their service areas and customer bases.

Sysco and its supporters may argue that competitors such as U.S. Foods' Chef’Store locations provide adequate alternatives to Restaurant Depot in the cash-and-carry segment. This argument does not withstand scrutiny. As of early 2024, U.S. Foods announced plans to divest the Chef'Store operation, noting that competitive benefits from its cash-and-carry portfolio had been "very limited." With approximately 100 locations compared to Restaurant Depot's 166, Chef'Store does not provide national scale or geographic coverage comparable to Restaurant Depot. It also begets the same problem of integration and competition with two major broadline distributors controlling the two targets cash-and-carry options. Just because U.S. Foods does it, does not mean all its competitors should be allowed to do the same.

No other competitor is positioned to replicate Restaurant Depot's national footprint, its price points, or its familiarity and trust among the independent restaurant community. The Open Markets Institute has stated explicitly that "rolling Restaurant Depot into Sysco will leave restaurants with shockingly few options and allow the giant to amass even more harmful market power to raise prices." The IRC agrees entirely.

The Commission's analysis should not be limited to the downstream effects on restaurants. The merger also raises profound concerns about harm to food producers — particularly small and mid-size farms, specialty suppliers, and regional food manufacturers.

Restaurant Depot currently serves as an important channel through which smaller producers reach independent restaurant customers. Its cash-and-carry model allows smaller vendors to stock warehouse shelves without the contractual requirements, volume minimums, and logistical integration demands that Sysco imposes on its broadline supplier network. If Sysco absorbs Restaurant Depot and begins integrating its procurement with its own supply chain, smaller producers are likely to be squeezed out in favor of Sysco's existing large-scale national suppliers.

This consolidation would harm the food supply chain at multiple levels:

▪Specialty, ethnic, and seasonal food producers who depend on cash-and-carry's flexible inventory model would face consolidation pressure.

▪Regional food economies, which support local employment, agricultural diversity, and food security, would be undermined as procurement decisions shift to Sysco's centralized national buying model.

These upstream harms to producers are not speculative. They reflect the well-documented market power effects of vertical consolidation in agricultural supply chains, which the Commission and the Department of Agriculture have studied extensively in other contexts.

Beyond the immediate competitive harms, the IRC urges the Commission to consider the broader systemic implications of allowing Sysco to become a near-monopoly controller of the independent restaurant supply chain.

When a single corporation controls both primary distribution channels for an entire sector of the food economy, the system becomes extraordinarily vulnerable. The COVID-19 pandemic exposed how rapidly supply chain concentration can lead to cascading failures: broadline distributors, overwhelmed by simultaneous demand shocks and logistical disruptions, left independent restaurants with no reliable fallback purchasing option. Restaurant Depot served as a crucial survival mechanism for tens of thousands of restaurants during that period precisely because it operated outside the broadline distribution model.

If this merger is approved, that resilience disappears. A disease outbreak affecting Sysco's distribution infrastructure, a cyberattack on its enterprise systems, a labor disruption at its warehouses, or any other systemic shock would now propagate across both the broadline and cash-and-carry channels simultaneously. Independent restaurants would have no structural alternative. The Commission should weigh this systemic fragility as a harm to the broader public interest, beyond the traditional competitive analysis.

The pricing effects of this merger will be felt disproportionately in lower-income neighborhoods and rural communities, where independent restaurants are often the primary food access points and economic anchors. When independent restaurants face unsustainable cost increases due to reduced supply chain competition, they close. When they close, communities lose jobs, tax revenue, cultural identity, and often the only full-service food provider in their area.

The Commission should recognize that antitrust enforcement in the food sector is not merely a matter of abstract market efficiency. It has direct, measurable consequences for the economic vitality and food security of American communities, particularly those already underserved by the national restaurant economy.

Restaurant Depot's warehouse model supports a broader diversity of food products, suppliers, and culinary traditions than Sysco's broadline catalog. Independent restaurants — particularly those serving immigrant and ethnic communities — rely on Restaurant Depot's flexible, eclectic inventory to source ingredients that Sysco's standardized distribution network does not carry. Consolidating procurement

under Sysco's model will reduce that diversity, homogenizing the food supply available to independent restaurants and reducing culinary choice for American consumers.

Section 7 of the Clayton Act prohibits any acquisition where "the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly" in any line of commerce in any section of the country. The proposed Sysco-Jetro transaction satisfies this standard in multiple respects:

▪ It eliminates the primary competitive constraint on Sysco's pricing power in both the broadline delivery and cash-and-carry segments.

▪ It creates extreme concentration in the regional markets where independent restaurants are most dependent on Restaurant Depot as an alternative to Sysco.

▪ It forecloses the entry of future competitive alternatives by giving Sysco control over both the delivery and self-service purchasing channels, leaving no viable independent niche for competitors to occupy.

▪ It enables structural leverage over both upstream food producers and downstream restaurant customers that no prior market participant has possessed.

Section 5 of the FTC Act further provides the Commission with broad authority to prevent unfair methods of competition, including mergers that threaten to harm competition even where the Section 7 standard might be narrowly construed. The totality of competitive harms described in this letter, including systemic fragility, upstream producer harm, and disproportionate effects on disadvantaged communities, support a finding of unfair competitive methods under this provision.

The Commission should also be aware that the current administration has established a Food Supply Chain Security Task Force to investigate price transparency and competitive conditions in food distribution. The Sysco-Jetro transaction is precisely the kind of consolidation that task force was created to scrutinize. We urge the Commission to coordinate with that body and with the Department of Justice Antitrust Division in its review.

The IRC respectfully requests that the Commission take the following actions:

▪ Open a Formal Investigation. The Commission should immediately open a formal merger investigation into the Sysco-Jetro transaction and issue a Second Request for Information pursuant to the Hart-Scott-Rodino Antitrust Improvements Act.

▪ Conduct Regional Market Analysis. The Commission should map regional market concentration in both the broadline and cash-and-carry segments, with particular attention to metropolitan areas and communities where Restaurant Depot represents the sole or dominant alternative to Sysco delivery.

▪ Examine Upstream Producer Harm. The Commission should investigate the impact of the proposed merger on small and regional food producers who depend on Restaurant Depot's procurement model as a route to market.

▪ Assess Systemic Risk. The Commission should consider the public interest implications of allowing a single corporation to control both primary foodservice distribution channels serving independent restaurants, including the risk of cascading supply chain failures.

▪ Block the Transaction. Based on its investigation, the Commission should seek a preliminary injunction and, if necessary, a permanent injunction to prevent the consummation of this merger.

▪ If Divestiture Is Considered: In the event the Commission concludes that structural remedies short of a full block are appropriate, we strongly urge that any divestiture package be meaningful, enforceable, and sufficient to preserve Restaurant Depot as a genuinely independent competitive alternative — not merely a paper fix. History has shown that behavioral remedies and partial divestitures in foodservice distribution have failed to protect competition.

America's independent restaurants are the backbone of our communities, our culinary culture, and our local economies. They employ millions of workers, pay billions in local taxes, and serve as gathering places and cultural institutions for neighborhoods across the country. They operate on thin margins and depend on competitive supply chains to survive.

The Federal Trade Commission has both the authority and the obligation to prevent this outcome. The IRC urges the Commission to act with urgency, rigor, and courage in fulfilling its mandate to protect competition and the American public.

We respectfully request the opportunity to present additional evidence and testimony in support of this letter, and we are available to meet with Commission staff at the earliest opportunity. We thank the Commission for its attention to this critical matter.

Sincerely,

Erika Polmar
Executive Director, Independent Restaurant Coalition