TOWN OF NEWBURGH – A handful of small, independent restaurant owners, food educators, chefs and a farmer sat around a table at the Alexis Diner in Newburgh on Monday to express their concerns to Congressman Pat Ryan (D, NY -18) about the proposed merger of the food industry giant Sysco Corporation and Restaurant Depot.

Above the frenetic sounds of a hectic lunch crowd with plenty of hot coffee, they candidly described what they said was the disaster that will strike if Sysco is successful in acquiring Restaurant Depot, which has a warehouse in the Town of Newburgh.

“The merger will drive the food prices up, and it will drive small restaurants right out of business,” said Tom Costa, chef and owner of North Plank Road Tavern in the Town of Newburgh and an active member of the Independent Restaurant Coalition.  “Right now, I can run out to Restaurant Depot, and I can get three pounds of Faroe Island salmon, but if I have to order a case of it from Sysco, I risk losing some of it before I actually sell it. Restaurant Depot is a godsend for the small, independent restaurant, which is a dying breed.”

Congressman Ryan held the roundtable discussion to get feedback from local restaurant owners and food service providers.

Last Friday, Ryan, who co-chairs the Congressional Monopoly Busters Caucus, sent a letter to Federal Trade Commission Chairman Andrew Ferguson, urging him to block the proposed $29.1 billion merger.

Ryan says the appeal to prevent the acquisition has bipartisan support.

“I cannot overstate how big of a deal this is as one of the biggest mergers in this country in the past decade,” said Ryan.  “At a time when costs are already exorbitantly high, this is incredibly problematic.”

Ryan said there are nearly 2,000 food service and accommodation businesses in his district, most of them with less than 20 employees.  

“There are over 30 thousand food workers in these three counties—a huge source of employment across our communities, so this affects everyone,” said Ryan.

Sysco is the single biggest distributor of food in the nation, serving over 700,000 customers globally, including schools, hospital systems and other organizations that have high volume.

Earlier this year, it announced plans to purchase Restaurant Depot, one of the nation’s largest food wholesale cash-and-carry warehouse companies, that sells to independent restaurant owners, caterers and non-profits.

Restaurant owners contend the proposed merger would reduce competition, drive up operating costs and make dining out more expensive. 

Rei Peraza, director of Operations and Executive Chef for Rossi & Sons, prides himself on the fact that he has never utilized Sysco.

“Sysco has an algorithmic pricing system.  The more you buy, the better your pricing is, and that’s why it doesn’t work for a lot of small, mom and pop operations.  I don’t think Sysco and the way they do business has ever been good for small businesses,” said Peraza.

With Sysco, the identities of restaurants get lost.  You’re using the same chicken fingers and the same toilet paper as everyone else.  As a whole, they have very little to offer in quality products outside of convenience.”

In 2013, Sysco attempted to acquire US Foods, but the Federal Trade Commission sued to block the merger and won.

Assemblyman Jonathan Jacobsen says he intends draft a letter to State Attorney General Letitia James, urging her to take action and enforce the current laws that prohibit monopolistic practices.

“It’s wrong in the insurance, healthcare and pharmaceutical industries, and it’s wrong here,” said Jacobsen.

“With this merger, we’ll be out priced, and this will be catastrophic,” said Gaby Pereyra, owner of Yara Farm in Middletown, New York and director of Operations for the Chester Agricultural Center.  “It would be impossible for small farmers to be able to sell to small restaurants or suppliers.”

Ryan says he is hopeful that the merger can still be stopped, despite the fact that negotiations are in the final stages.

“Sysco has a pricing structure based on volume,” said Tom Costa.  “It may be smart but it’s going to kill the little 

guy.”



Original article