Will Sysco Buying Restaurant Depot Cause Dining Out to Be More Expensive in L.A.?
Sysco’s $29 billion acquisition of Restaurant Depot has raised concerns among independent restaurant owners, who fear higher prices and reduced competition. The Independent Restaurant Coalition is pushing the Federal Trade Commission to investigate, comparing the merger to the Ticketmaster-Live Nation deal, which led to antitrust violations and increased costs for consumers.
Sysco, one of the largest wholesale restaurant food distributors in the U.S., announced in March its $29 billion acquisition of Restaurant Depot, a move that has sparked fears among small restaurant owners. Many operators, including Gilberto Cetina Jr., owner of a Michelin-starred marisquería in Los Angeles, rely on Restaurant Depot for competitive pricing and accessibility, which they believe Sysco cannot match due to higher volume requirements. The merger has drawn criticism from the Independent Restaurant Coalition, a nonprofit advocating for independent restaurant owners. They argue that consolidating two major food distributors under one company will eliminate competition, leading to higher costs for small businesses. The coalition launched a questionnaire to gather evidence for the Federal Trade Commission (FTC), aiming to block or delay the merger, which is expected to finalize in early 2027. Sysco’s CEO, Kevin Hourican, has publicly denied plans to raise prices at Restaurant Depot, stating in an April interview that ‘We will absolutely not be raising prices.’ However, skeptics compare the deal to the 2010 merger of Ticketmaster and Live Nation, which was later ruled an illegal monopoly and contributed to inflated ticket prices in the live entertainment industry. Restaurant owners worry a similar outcome could harm their profitability. The Independent Restaurant Coalition’s Director of Community Engagement, Andrea Borgen Abdallah, dismissed Sysco’s claims of cost efficiencies, arguing that the merger will not benefit small operators. The coalition is urging the FTC to investigate, citing concerns that the combined entity could dominate the market and stifle competition for essential supplies like seafood, produce, and equipment. Restaurant Depot has long served as a lifeline for small restaurants, offering cash-and-carry services with lower minimum orders. If Sysco’s acquisition leads to higher prices or reduced service, independent eateries—especially in cities like Los Angeles—may struggle to stay afloat. The outcome of this merger could set a precedent for how consolidation affects small businesses nationwide.
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