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Frosh challenge to foodservice merger is successful


Attorney General Brian E. Frosh announced on June 23 that a challenge to the merger of the nation's two largest foodservice distributors has been successful, with a federal judge blocking the transaction pending further review.

The Maryland Office of the Attorney General Antitrust Division joined with the Federal Trade Commission, nine other states and the District of Columbia to halt the merger of Sysco Corp. and USF Holding Corp., or US Foods. US District Court Judge Amit P. Mehta, in the District of Columbia, issued a temporary injunction blocking the merger. The Federal Trade Commission must now complete a full administrative review of the proposal before it can proceed.

"This is terrific news for anyone who eats. And that means all Marylanders," said Attorney General Frosh. "This proposed merger would reduce competition and lead to higher prices for Marylanders who dine out, as well as for food service providers."

Sysco and US Foods are the two largest foodservice distributors in the United States, and compete to sell to restaurants, hotels, hospitals schools and other facilities in Maryland and throughout the country. The combined entity would control approximately 75 percent of the national market and 80 percent of the market in Annapolis and the Baltimore-Washington corridor, the Attorney General's Antitrust Division noted in its complaint.

Judge Mehta agreed with Attorney General Frosh that the $8.7 billion merger, if allowed to proceed, could reduce competition in these markets.

Attorney General Frosh thanked Assistant Attorney General Gary Honick, and Ellen Cooper, the chief of the Antitrust Division, for their work on this case.

Maryland and the Federal Trade Commission were joined by California, Illinois, Iowa, Minnesota, Nebraska, Ohio, Pennsylvania, Tennessee, Virginia and the District of Columbia in this enforcement action.