Sysco’s proposed acquisition of Restaurant Depot has prompted significant antitrust concerns from independent restaurant operators and industry groups amid fears it could reduce competition and drive up prices in the food service distribution sector.

The deal, announced earlier this year, would combine two major players in the U.S. food distribution market. Sysco, one of the largest broadline delivery companies, intends to purchase Restaurant Depot, a wholesale cash-and-carry chain favored by many small, independent restaurants for its lower prices and self-service model. Restaurant Depot generated approximately $16 billion in revenue last year, with nearly $2 billion in free cash flow, according to Sysco’s announcement. The acquisition, valued at around $21 billion, is subject to regulatory approval by the Federal Trade Commission (FTC).

Opponents of the transaction, including the Independent Restaurant Coalition (IRC) and various independent restaurateurs, warn that the purchase could significantly reduce competition and harm small operators already struggling with rising costs. The IRC, which represents about 54,000 members, plans to present findings to the FTC arguing that the merger would violate Section 7 of the Clayton Antitrust Act of 1914 by potentially lessening competition. The coalition describes the deal as the largest proposed merger in U.S. food service distribution history, creating a dominant entity across both broadline delivery and cash-and-carry wholesale channels.

Erika Polmar, executive director of the IRC, underscored the stakes for independent restaurants, which have suffered from high operating costs and closures nationwide. “These incredible businesses that are cornerstones of their local economies are thinking about closing because they just can’t bear one more increased expense,” Polmar stated, highlighting that savings from Restaurant Depot typically amount to $10,000 or more annually for operators.

Several independent business owners interviewed expressed concern the deal could drive price increases and limit product choices, effectively creating a monopoly. Gus May, co-founder of La Tejana in Washington, remarked that consolidation could lead to less competition and higher prices for operators and consumers alike.

Sysco, however, disputes these fears. CEO Kevin Hourican emphasized that Restaurant Depot would continue to operate independently, retaining its current leadership under CEO Richard Kirschner. Sysco does not plan to rebrand or alter the cash-and-carry model, nor does it intend to raise prices. Hourican noted that only around 10 percent of Restaurant Depot’s customers overlap with Sysco’s, suggesting minimal direct competition between the two companies under current market structures.

Supporters of the acquisition argue it could expand Restaurant Depot’s footprint, especially in underserved smaller markets, potentially increasing product availability and creating jobs. David Henkes, senior principal at research firm Technomic, suggested that efficiencies gained through the merger might lower prices for operators, though he acknowledged this could negatively impact other distributors or manufacturers.

The proposed acquisition echoes the 2013 Sysco-US Foods merger attempt, which was blocked by the FTC on antitrust grounds, marking ongoing regulatory scrutiny in this sector. As the FTC reviews the current transaction, stakeholders remain sharply divided over its potential impact on competition, market dynamics, and the resilience of America’s independent restaurant industry.