The Federal Trade Commission sued Southern Glazer’s Wine and Spirits, the largest distributor of beer, wine and spirits in the country for price discrimination, alleging that Southern favored large chain buyers such as Costco, Total Wine & More and Kroger over smaller independent retailers.
It has been reported that the FTC has been investigating the giant wholesaler for more than a year.
This pricing disparity is said to be in violation of the Robinson-Patman Act, which aims to prevent price discrimination that harms competition. The Act allows for volume discounts but mandates that the benefits must be based on legitimate cost efficiencies, not on favoritism toward larger buyers. Many states also have restrictions on volume discounting for alcoholic beverages.
Southern Glazer’s reported $26 billion in revenue from retail sales in 2023 and operates in 44 states.
The FTC lawsuit, which was filed in the U.S. District Court for the Central District of California, seeks a permanent injunction against such behavior by Southern Glazer’s as well as “other equitable relief.”