Anti-monopoly, farm and industry groups are calling on US regulators to take action against some of the nation’s largest foodservice distributors, alleging ‘pandemic profiteering’ and broad violations of the nation’s antitrust laws.

In a letter sent on Thursday to the Federal Trade Commission and the Justice Department’s Antitrust Division, the groups urged expansive antitrust enforcement, including blocking new mergers and acquisitions. They also called enforcers to“not hesitate” to pursue prosecutions or even to break up the companies.

Using their market power, the foodservice distributors are “doubling and tripling” the prices for many products, as well as cutting off supply to some buyers entirely, disproportionately impacting rural and small businesses, the groups argue.

The letter marks the latest in an ongoing effort by anti-monopoly and restaurant groups to challenge the foodservice industry. It also comes as both the FTC and DOJ are stepping up scrutiny of consolidation in the food and agriculture sectors.

A Sysco spokesperson pushed back on the characterization of the foodservice distribution sector as consolidated, pointing to Sysco’s annual financial report. The company estimated that it controls 17 percent of the roughly $300 billion annual foodservice market in 2021. According to the report, the company says it competes with “a large number of companies” on a regional and national basis. “Since switching costs are very low, customers can make supplier and channel changes very quickly,” the report states. “There are few barriers to market entry.”

US Foods, another company named in the letter, did not immediately respond to a request for comment.

The groups that wrote the letter, however, estimate that the top 10 food service distributors control as much as 70 percent of national sales, the top five control over 50 percent and that Sysco Corporation alone controls 30 percent.

The letter was signed by American Economic Liberties Project, Farm Action, the American Sustainable Business Network, the Independent Restaurant Coalition and Protect Our Restaurants.

Context: The letter comes as the FTC and DOJ are taking an increasingly active look at consolidation in production agriculture and food. Associate Attorney General for Antitrust Jonathan Kanter has no intention of letting up. “We are litigating more than we have in decades,” he said in a recent speech, noting the division is litigating the largest number of civil antitrust cases in litigation in the last 20 years. “People who had never before heard of the antitrust laws are realizing the costs of underenforcement,” he continued, “rampant oligopoly behavior deprives consumers and workers of the benefits of robust competition.”

FTC Chair Lina Khan has taken a similar stance. In an interview earlier this year, Khan said that the FTC’s “inaction” has“severe costs”.

“I think the [FTC] agency really does see small businesses that are struggling as an emerging priority for them and this is just a case where the small businesses have really been victimized way disproportionately,” said Moe Tkacik,a senior fellow at the American Economic Liberties Project who worked on the letter.

Tkacik compared the pricing issues with Sysco and other foodservice distributors known as ‘broadliners’ to the fees delivery apps charged restaurants during the pandemic, which ultimately elicited enormous pushback.

The scrutiny on the foodservice distribution industry also comes as companies like Sysco are facing pushback from their workers who say that the company has not re-hired drivers after pandemic layoffs to meet the renewed demand. In Boston, 300 Sysco workers struck on Monday, demanding better wages, benefits and hours. The Teamsters, who represent some Sysco workers, did not immediately respond to a request for comment.

Backdrop of consolidation: Because the industry is so concentrated, the groups say, the biggest food distributors no longer care if they lose “the business of any single restaurant,” a practice akin to how some say the freight railroads operate.

The groups argue that although the foodservice distributors faced supply shocks and steep input increases throughout the pandemic, “by the middle of 2021 supply chains were reportedly on the mend” and the companies continued to raise prices, rather than using price to undercut competitors. In earnings calls, the letter alleges, companies made clear their intentions not to compete on price and that the new, higher prices were entrenched.

According to Bureau of Labor Statistics data, the groups suggest that the companies raised prices such that their margins continued to grow, even against inflation.

Curbing tacit collusion: In markets with few players, legal experts say that it’s easier to collude on price, such as through public statements like earnings calls. Known as tacit collusion, it has come under closer review recently.

Rep. Katie Porter (D-Calif.), a vocal critic of corporate power, introduced legislation last month to curb tacit collusion by making it more explicitly illegal. When asked about the statements Sysco made in its most recent earnings call and highlighted in the letter, she identified it as something her bill would target.

“Capitalism requires competition, but this evidence shows that Sysco was trying to coordinate its prices with its competitors and force its customers to pay more,” said Porter in a statement. “This type of profiteering is a major driver of inflation and should be prohibited by our laws. The Competitive Prices Act would clarify and amend our existing antitrust laws so that Americans can hold companies accountable when they exploit loopholes in the law to price gouge consumers.”

A Sysco spokesperson said the allegations were “without merit” and ”not evidence of collusion.”

“The comments represent an explanation about the benefits our new pricing technology is having on our ability to manage double digit inflation while also ensuring customers receive fair and market relevant pricing,” the spokesperson said.