Sysco and U.S. Foods have sought to merge their food distribution businesses. If the companies are allowed to merge, the combined company would control approximately 75% of the food service marketplace, potentially leading to higher prices and diminished service for the restaurants, hotels, and schools that contract distributors. A judge granted a Federal Trade Commission (FTC) request to grant a restraining order and injunction on the merger as it would substantially impair competition. If the FTC had not obtained a restraining order to block the merger attempt, what type of competitive structure could the merged company (U.S. Foods & Sysco) have achieved?

Question

Quizplus · Accepted Answer

The merged company would have controlled approximately 75% of the food service marketplace, which would have given it a dominant position in the industry. This would have allowed it to set prices and control supply, creating a monopoly.