Randy Gordon Comments on Broad-Line Food Distributor Merger


The Houston Chronicle covered the proposed merger between the only two national broad-line food distributors, Houston-based Sysco Corp. and US Foods. Together the two control 75 percent of the national broad-line food market, and many customers have told the Federal Trade Commission that they oppose the merger. According to court documents, the FTC has concluded that if it allowed the purchase of US Foods, the new Sysco could charge customers higher prices and offer lower-quality service without facing significant competition. Sysco calls that analysis "ludicrous," arguing that it faces stiff competition from local and regional distributors and retailers.

These diametrically opposed perspectives of the market will drive the FTC's lawsuit to block the merger, said Gardere Partner Randy D. Gordon, chair of the Firm's Antitrust and Trade Regulation Practice. "A company like Wal-Mart has been able to consistently supply lower prices to consumers ... and that would be their economic argument, that everybody wins," he said of Sysco.

The complete article can be found here.


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