WASHINGTON, D.C. — Southern Glazer’s Wine and Spirits LLC will face six years of restrictions on pricing practices that allegedly favored large chain retailers over smaller competitors under a proposed settlement with the Federal Trade Commission.
The agreement resolves a 2024 FTC lawsuit accusing the nation’s largest wine and spirits distributor of violating the Robinson-Patman Act by offering discounts and rebates to large customers that were not available to independent retailers.
The order would cover nearly all Southern Glazer’s wine and spirits sales to the five largest chain retailers across 26 states.
The FTC alleged Southern Glazer’s charged independent retailers significantly more for identical bottles sold during the same period to chains including Total Wine, Walmart and Kroger, sometimes when competing stores were only blocks or miles apart.
According to the complaint, the differences stemmed in part from discounts and rebates available to large buyers but inaccessible to smaller competitors and not justified by differences in distribution costs.
The proposed order focuses on “paired” transactions in which Southern Glazer’s sells the same product to a chain retailer and a nearby independent retailer at materially different prices.
A violation could occur when the price difference exceeds a maximum threshold tied to state-specific operating costs and when recurring discriminatory pricing exceeds $5,000 in aggregate over a 12-month period.
Southern Glazer’s could resolve certain violations by paying the affected independent retailer 1.5 times the combined price differential.
If the company does not provide that compensation and the FTC later prevails in an enforcement action, Southern Glazer’s would be required to pay the retailer double the aggregated price differences.
“This settlement marks a significant milestone for the FTC in its enforcement of the Robinson-Patman Act,” FTC Bureau of Competition Director Daniel Guarnera said.
The case was the FTC’s first Robinson-Patman Act enforcement action in a generation. The law generally prohibits price discrimination that harms competition by charging disfavored retailers more for comparable goods.
An independent monitor will oversee compliance with the proposed order. The settlement also creates a mechanism for direct payments to small retailers found to have been harmed by violations of the order.
The 26 states covered are Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Hawaii, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Minnesota, Missouri, Nebraska, Nevada, New Mexico, New York, North Dakota, Oklahoma, South Carolina, Tennessee, Texas and Washington.
The FTC voted 2-0 to issue the proposed stipulated order, which was filed in the U.S. District Court for the Central District of California.
The order will take effect if approved and signed by the federal judge.
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