The Federal Trade Commission (FTC) has accused Southern Glazer’s Wine and Spirits, the largest U.S. liquor distributor, of favoring retail giants like Costco, Kroger, and Total Wine & More with steep discounts while sidelining smaller independent liquor stores.
The suit, filed in Los Angeles federal court, alleges the distributor violated the Robinson-Patman Act, which prohibits unfair pricing practices that harm competition.
Southern Glazer’s, a private company generating $26 billion in revenue in 2023, controls one-third of all wine and spirits sold in the United States, according to the FTC.
Since at least 2018, the complaint claims, the distributor has systematically deprived smaller retailers of discounts and rebates, undercutting their ability to compete against national chains.
FTC Chair Lina Khan emphasized the importance of fair competition, stating that pricing practices favoring large chains hurt local businesses, limit consumer choices, and drive up costs.
The lawsuit, Khan added, is part of the agency’s effort to restore competition and enforce long-overlooked laws like the Robinson-Patman Act.
The case has divided FTC commissioners. While Khan and two others approved the lawsuit, dissenting commissioner Andrew Ferguson questioned the evidence of significant harm to competition.
Ferguson, recently selected to replace Khan as FTC Chair, also argued that Southern Glazer’s likely has a valid cost-justification defense for its pricing practices.
Southern Glazer’s responded forcefully, describing the suit as “legally flawed” and “misguided.”
The distributor defended its use of volume discounts as a standard industry practice, claiming these discounts lower costs for consumers and reflect the expenses of selling different quantities of wine and liquor to customers.
The FTC’s investigation, which began over a year ago, also includes major suppliers like Pernod Ricard, Bacardi, and Diageo, whose brands include Jameson Whiskey, Grey Goose Vodka, and Smirnoff Vodka.
In October 2023, the FTC sought court enforcement of a subpoena demanding documents from Total Wine as part of its probe.
While the outcome of the lawsuit remains uncertain, it underscores the broader tension between large-scale business advantages and the survival of small enterprises—a dynamic with far-reaching implications for consumers and communities alike.
You May Also Like:
