Beware of Big Sandwich
By Matthew Gagnon
Over the years there have been many “big” industries that have gained the contempt of the American people. We’ve heard about the dastardly villains of Big Tobacco, destroying the country one cigarette at a time. We’ve heard about the evil, monocle-wearing, mustache-twirling oligarchs who run Big Oil, enriching themselves by covering the United States in an oily black slick. Lately, we’ve heard about the malevolent scoundrels in charge of Big Pharma, swimming in money bins full of drug money.
But beware, ladies and gentlemen, there’s a new big scary industry that you need to know about: Big Sandwich.
You see, back in August it was announced that Subway, the most ubiquitous sub shop in the country, was being sold to Roark Capital for roughly $10 billion. It turns out that Roark also owns other fast food sandwich businesses, including Jimmy Johns and Arby’s.
Enter the Federal Trade Commission. The FTC, which has now existed for more than 100 years, was created to enforce federal antitrust law, and engage in “consumer protection” practices. Apparently, Subway’s sale to Roark set off alarm bells at the FTC, which announced last week that it would be investigating the sale to see if it was legal under antitrust law.
Quick to pounce on an opportunity to grandstand, politicians immediately sprung to action. U.S. Sen. Elizabeth Warren of Massachusetts tweeted, “the FTC is right to investigate whether the purchase of Subway by the same firm that owns Jimmy Johns and McAlister’s Deli creates a sandwich shop monopoly.”
A sandwich shop monopoly?
A quick Google search for “sandwich shop” and “deli” within a 25 mile radius of my house reveals that there are at least 50 options that aren’t Subway, Jimmy John’s (there aren’t even any Jimmy John’s shops in Maine) or Arby’s for me to go to if I want a sandwich. There are plenty of regional chains like Amato’s and local sandwich places like my beloved Clayton’s in Yarmouth.
Interestingly enough, though, I’ve always maintained that the best place to get a sandwich in Maine is at gas stations and convenience stores. Yes, I’m serious. Maine has a very odd but awesome deli-gas connection, and the best sandwiches I’ve ever eaten in the state have oddly enough been at some of these hidden gems. My absolute favorite was always R&K Variety on Route 1A in Hampden. I went there so often in college that they named a sandwich after me.
The point, of course, is that the idea of a “sandwich monopoly,” as Warren put it, is utterly ridiculous, and should be immediately laughed out of any serious policy discussion. One company owning a handful of chains that make sandwiches does not create a monopoly in a world where I have that many other sandwich options. Not that “sandwich shops” even makes sense as a market definition, anyway.
With whom does Subway compete? Is it only other sandwich shops or is it competing against burger and fry joints as well? Can’t you get a sandwich at Wendy’s? Does a Big Mac count as a sandwich? Did everyone forget about places like Quiznos and Panera? There were 198,153 fast food restaurant businesses in the U.S. as of 2022, many of which offer sandwiches, roughly 50,000 of which are chains. How do we classify all of these, and who decides what is in which category?
What about sit-down restaurants, most of which offer some kind of lunch sandwich option? This past weekend, I had considered going to Amato’s to get a delicious turkey Italian sub with bacon, but I ended up getting a fried chicken sandwich from a pizza joint.
And can someone explain Chipotle to me, by the way? Is there really any kind of “fast casual” Mexican dining option out there besides that one restaurant? If Subway being sold creates Big Sandwich, what does that make Chipotle? Big Burrito?
This would all be funny, if it wasn’t so serious. Under the Biden administration, the FTC has increasingly become weaponized, as it has spent the better part of the last year making ludicrous arguments that seek to break up Amazon while also attempting to take down Google.
Now it has set its sights beyond the big, unpopular tech companies, and is busy labeling petty corporate transactions in the world of basic consumer goods and services as potentially monopolistic. Not because they actually are (they aren’t) or because they threaten prices (they don’t; if anything, this type of merger could actually bring prices down with economies of scale). It is doing this because it sends a message to corporate America, big and small: Do things the way the government wants — or else.