Food Conglomerate Acquires Popular Supply Source for Small Restaurants
A large food company, partly backed by the asset management firm BlackRock, has purchased a privately owned supplier that many small restaurant owners have relied on. Cisco announced on Monday that it has expanded its operations to include 166 stores across 35 states. This acquisition of Restaurant Depot, founded by 94-year-old Nathan Kirsch, has drawn criticism from observers who argue it creates a monopoly detrimental to independent restaurant owners.
“With the partnership of Cisco and Jetro Restaurant Depot, we’re aiming to increase access to affordable fresh food, enhancing value for small, independent restaurants, and the customers they serve, by offering more choice and convenience,” stated Cisco CEO Kevin Hourican in a press release.
The press release highlights Restaurant Depot as a significant wholesale cash-and-carry foodservice provider in America, catering to small, independent restaurants seeking high-quality food at lower prices.
Erica Polmar, the executive director of the Independent Restaurant Coalition, remarked, “For decades, Restaurant Depot has been a vital resource for independent restaurants, allowing small operators to access the same prices as larger establishments without the complexities of contracts or bargaining.”
However, Polmar also expressed strong concerns about the acquisition, suggesting it will stifle competition and severely limit options for independent eateries already facing increasing costs and shrinking profit margins. “Handing over such a crucial wholesale channel to the largest food distributor in the nation is a serious blow to restaurants across America—and a challenge for the FTC to address,” she asserted.
Matt Strickland, a restaurant owner and former Republican Senate candidate in Virginia, also voiced his concerns on social media. He noted how Cisco’s prices are often too steep for small businesses, which typically turn to Restaurant Depot for inventory.
Pointing out the entwined ownership of Cisco and its major shareholders, BlackRock and Vanguard, Strickland questioned the implications of this deal, referring to it as an antitrust issue. He also mentioned the scrutiny that these asset management firms faced from Congressional Republicans over their environmental, social, and governance practices.
While the Department of Justice’s Antitrust Division has yet to comment, the growing apprehension among small restaurant owners raises key questions about market competition in the food supply industry.
