Government says the distributor commits illegal price discrimination against smaller stores.
The Federal Trade Commission (FTC) has filed a lawsuit against Southern Glazer’s Wine and Spirits, the largest wine and spirits distributor in the United States, alleging illegal price discrimination that harms small, independent businesses, as well as consumers. The FTC claims that Southern Glazer’s violated the Robinson-Patman Act by offering discounts and rebates to large chains that were not available to smaller retailers.
According to the FTC, Southern Glazer’s has been engaging in these practices since at least 2018, favoring large purchasers like Total Wine & More, Costco, and Kroger, while charging significantly higher prices to smaller, independent stores. This has created an uneven playing field, making it difficult for smaller businesses to compete and ultimately reducing consumer choice and increasing prices.
Southern Glazer’s has denied the allegations, calling the lawsuit “misguided and legally flawed.” The company argues that it complies with all legal requirements and that its pricing practices are standard within the industry. “We will vigorously defend our position in court,” a company representative said. [Source: Associated Press.]
The lawsuit has drawn significant attention from industry stakeholders, with many small business owners expressing support for the FTC’s actions. The case is expected to have far-reaching implications for the wine and spirits industry, potentially leading to increased market access for smaller businesses and more choices for consumers. [Source: MSN.]
Southern’s largest off-premise chain customers include large wine and spirits retail chains like Total Wine, Binny’s, Spec’s, and BevMo, large grocery chains like Kroger and Albertsons, national club stores like Costco and Sam’s Club, and national megastore chains like Walmart and Target.
The FTC’s complaint comprises two counts: 1) Southern Glazer’s engaged in unlawful price discrimination in violation of Section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a); and 2) Glazer’s practices constitute unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45. The FTC is seeks preliminary and permanent injunctive relief and a cease-and-desist order halting price discrimination practices.
