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Teamsters pushes against Sysco-US Foods deal

A week after Sysco aired a plan to allay regulatory concerns about the pending acquisition of US Foods, the International Brotherhood of Teamsters blasted the proposal as inadequate to restaurants and the other parties likely to be affected by the merger.

The powerful union has opposed the possible $8.2 billion deal since it was first announced, presumably because of the potential shift in contract bargaining power and the possible loss of drivers’ jobs and hours. About 8,000 Sysco and 4,000 US Foods associates are members of the Teamsters Warehouse Division, the union said.

The Teamsters said its concerns about a Sysco-US Foods combination are shared among “elected officials, consumer advocates, foodservice establishments, workers and others.” It did not name any of the foodservice places by name.

The union asserted that the parties’ worries were not allayed by Sysco’s offer last week to sell 11 distribution centers to Performance Food Group, the industry’s third largest distributor, after the merger of Number One and Number Two is completed. Even after the assets shifted into PFG’s portfolio, the Sysco-US Foods conglomerate would have 159 broadline facilities, compared with PFG’s 35, 10 of which would only service pizzerias and Italian restaurants.

"It seems highly unlikely that the proposal would recreate anywhere near the level of competition that exists today," said Steven P. Vairma, director f the Teamster Warehouse Division. "On its face, the proposed fix seems unlikely to do much to reduce Sysco's dominance following the acquisition of US Foods. Even if the proposal included a few more facilities, it would still be a deeply risky experiment, one that could cost consumers and workers dearly."

Neither Sysco, US Foods or PFG has publicly responded to the Teamsters’ allegations.

Last week Sysco said it would present its post-merger divestiture plan to the five directors of the Federal Trade Commission. The timing on that presentation was not revealed.

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