Sysco To Contest FTC Decision To Block Merger

Sysco Corp. said Feb. 19 that it will contest the U.S. Federal Trade Commission’s (FTC) attempt to block its proposed merger with US Foods. The five FTC commissioners voted by a slim margin, 3-2, to seek a preliminary injunction in the U.S. District Court for the District of Columbia to prevent the parties from closing the transaction.

Sysco believes that the FTC’s decision is based on an erroneous view of the competitive dynamics of the food service distribution industry. “The facts are strongly in our favor and we look forward to making our case in court,” said Bill DeLaney, Sysco’s president and CEO. “Those of us who work in this industry every day know it is fiercely competitive. Customers of all types have access to food distribution services from a wide variety of companies and any number of channels. In fact, the overwhelming majority of restaurants and food operators choose their food service distributor locally, where they have choices among many excellent companies,” he said.

“For example, the FTC claims that Sysco and US Foods combined have a 75 percent market share in an ill-defined ‘national broadline market,’ ignoring the fact that the vast majority of ‘national customers’ use multiple regional or local distributors. Additionally, the FTC claims the merger would harm competition in 32 local markets, ignoring the existence of myriad local suppliers, including broadline companies, specialty companies, cash-and-carry and club stores with whom Sysco and US Foods compete on a daily basis, “ said DeLaney.

Sysco believes its merger with US Foods is in the best interest of all stakeholders for the following reasons: customer focus; substantial efficiencies; enhanced employee opportunities; and a substantial divestiture package of selling US Foods facilities in 11 markets to PFG upon consummation of the merger.

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Sonic Drive-In To Enter Rhode Island

Sonic Drive-In has signed two new franchise agreements in Rhode Island—the 45th state for the expanding brand. Already a mainstay in the South and Central Plains, Oklahoma City-based Sonic says it is expanding in the Northeast to meet what it calls “ever-growing demand” for its restaurants. The first franchisee is expected to open the state’s first Sonic Drive-In in the Providence market in mid-2015. The second franchisee plans to bring two new drive-ins to the state in the next few years. Beyond this initial growth, the brand is still actively seeking interested entrepreneurs in the state.

Sonic offers franchisees flexibility with multiple drive-in formats, including the traditional drive-in model with 14 to 29 dining stalls and a drive-thru; conversions, renovating existing restaurant buildings to create unique drive-ins; the counter service model, offering customizable footprints to fit a variety of indoor spaces; and indoor dining formats that allow guests to experience Sonic in multiple ways—either in their cars, at the drive-thru or seated at a table inside. The new Rhode Island drive-ins will feature an indoor dining area to fit the needs of its guests year-round.

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Preview of N.Y Int'l Restaurant & Food Service Show

Chef Sara Moulton, nationally recognized chef, television host, author and educator, will join Ferdinand Metz, CMC, president emeritus of the Culinary Institute of America (CIA), in a Culinary Demonstration on Monday, March 9, from 12:30 to 1:30 p.m. on the show floor of the International Restaurant & Foodservice Show of New York. Chefs Moulton and Metz will join many chefs who will be on stage during the three-day event, including David Santos, Anton Testino, Megan Johnson, Fritz Sonnenschmidt, Adin Languille, Olivia Roskowski, Robert Valencia, Bryan Tsao, Barret Bayer, Jason Walker and Rosanna Di Michele. The 22nd annual trade show will run March 8-10 at the Jacob Javits Convention Center in New York City. The show will bring together thousands of food service, restaurant and hospitality professionals from New York State and will feature more than 500 vendors. Restaurant and food service operators who attend the show will have the opportunity to participate in more than 40 educational sessions at the forum.

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Latest Word in Food Service...

New York State’s tipped wage will rise from $5 to $7.50 per hour effective Dec. 31.

• The Massachusetts Restaurant Association Educational Foundation (MRAEF) will host the eighth Annual ProStart Massachusetts Student Invitational, a high school culinary and restaurant management competition, on Tuesday, March 3, from 7 a.m. to 2 p.m. at North Reading Hillview Country Club.

• Saladworks, a major franchised fresh salad chain, has filed for bankruptcy but its more than 100 locations will remain open, it says.

• Heartland Payment Systems, a major payment processor and a provider of merchant business solutions, has purchased Dinerware and pcAmerica, two point-of-sale (POS) companies with solutions covering various hospitality and retail segments.

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