Audit Notes: Sysco is hungry, Michael Wolff, Big Viral

The WSJ looks at consolidation in the food business

The Wall Street Journal takes a good look at the proposed merger of Sysco and US Foods, the middlemen of the restaurant economy, which would create a food-distribution goliath with $65 billion in annual revenue and more than a quarter of the market. It would be quintuple the size of its next biggest competitor.

The big national distributors hold significant sway over prices. Some customers say the competition between Houston-based Sysco and US Foods, of Rosemont, Ill., is one of the few weapons they have against the companies’ pricing power.

“There was definite panic in the restaurant industry among small businesses when the merger was announced. They know they’re going to get squeezed,” said Suzanne Aquila, who owns Bloomington Bagel Co., a three-restaurant chain in Bloomington, Ind. Ms. Aquila, a Sysco customer, said she has used bids from US Foods to negotiate lower prices from Sysco.

Sysco, the only publicly traded major food distributor, has super-low profit margins that imply that competition is healthy in its industry. But restaurants are also notoriously low-margin businesses and they fear, with very good reason, that Sysco will attempt to gain pricing power by gobbling up its top competitor. Sysco would also get buying power in price negotiations with its suppliers, who also have low margins.

Unfortunately, one big word is missing from the WSJ’s piece: antitrust.

— Michael Wolff writes a takedown of a book he hasn’t read—Gabriel Sherman’s upcoming Roger Ailes biography.

Ailes, for his part, is in the not-so-sympathetic position of being a public figure arguing that his story can’t fairly be told by someone who doesn’t actually know him.

Since David Herbert Donald didn’t know Lincoln, he can’t fairly write about him, presumably. Wolff is sanctifying access here. He says that “without direct access to its subject, it exists in a limbo of the speculative and questionable” and that “Lacking charm or wiles, he didn’t get access, pretty much the price of entry for a serious biographer.”

Uncooperative subjects, though, are an age-old journalistic problem. That’s why we have write-arounds and unauthorized biographies. And they’re often more insightful than the ones who gained access. This is just a smear:

The journalist’s handbook recommends that when you don’t get access to your subject and are forced to do what’s called a “write around,” you should go far and wide for sources, using sheer numbers of interviews as the basis of your authority. Sherman keeps announcing that he did “614” interviews — which, to any journalist, is a protest-too-much sort of specificity.

This is the Kitty Kelley method.

Here’s a good rule of thumb: Don’t review books you haven’t read and if you’re going to write such a thing, don’t write, “after all, it is a book, and who reads books?”

Luke O’Neil writes a righteous rant, mea culpa, and cry for help in Esquire about Big Viral:

These all had one thing in common: They seemed too tidily packaged, too neat, “too good to check,” as they used to say, to actually be true. Any number of reporters or editors at any of the hundreds of sites that posted these Platonic ideals of shareability could’ve told you that they smelled, but in the ongoing decimation of the publishing industry, fact-checking has been outsourced to the readers. Not surprisingly—as we saw with the erroneous Reddit-spawned witch-hunt around the Boston Marathon bombing—readers are terrible at fact-checking. And this, as it happens, is good for business because it means more shares, more clicks.
This is not a glitch in the system. It is the system. Readers are gullible, the media is feckless, garbage is circulated around, and everyone goes to bed happy and fed…
“This isn’t a new model in journalism,” the Wall Street Journal’s Farhad Manjoo noted in his profile of Gawker’s Neetzan Zimmerman, reigning king of viral content. “Bundling the cheap, revenue-generating content with expensive, high-minded content is how newspapers made money for decades—but it has now become the touchstone model of the Web, in use at Gawker, BuzzFeed, the Huffington Post, and dozens of smaller sites.”
This is a common refrain—Yeah, but they do some good long-form journalism. And it’s true, I’ve read some good reporting out there—but on the other hand, after the Army blows up a village they come back around with a couple of sacks of rice to smooth over the damage. The fact is, you cannot justify quality reporting produced from the spoils of the opposite. Journalism does not provide for such leeway. It’s better for a hundred quality stories to go unposted than to let one knowingly false one see the light of day.

Read it all.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,