Image may be NSFW. Clik here to view.(Photo: Southern Glazer's Wine and Spirits)
The Federal Trade Commission is reportedly preparing to file a lawsuit against Southern Glazer’s Wine and Spirits. If enacted, the suit would represent the latest in a string of legal actions accusing the nation's largest alcohol distributor of price discrimination and monopolization.
On Tuesday, Politico reported that the FTC is considering a lawsuit under the Robinson-Patman Act, according to four anonymous insiders with knowledge of the matter. Sometimes referred to as the "Anti-Chain Store Act," the legislation is designed to protect small businesses from price gouging at the hands of large companies. The law is often used to target suppliers that give preferential treatment to large chains at the disadvantage of local businesses.
Southern Glazer's — the 10th largest private company in the U.S. as of 2022 — distributes brands from spirits giants including Beam Suntory, Bacardi, Jameson and countless others. The company reportedly accounts for 18.8% of the nation's wine and spirits wholesaling.
Though the FTC hasn't filed any specific complaints against Southern Glazer's just yet, a laundry list of high-profile allegations paints a rough portrait of where the issues may lie.
In 2023, alcohol retailer Total Wine received a mandatory petition from the FTC seeking compliance in an ongoing antitrust probe against Glazer's. Accusations of preferred treatment fell neatly within the jurisdiction of the Robinson-Patman Act; Total Wine representatives now say that they're complying with the investigation.
Last week, a lawsuit filed by Provi, a leading online alcohol retailer, moved forward against Southern Glazer's in Illinois court. Provi accused the distributor of "forgoing substantial profits" with the sole aim of undercutting competition in contested markets. The retailer also claims that Glazer's gathered "competitive intelligence" under the guise of a proposed partnership before launching a rival online marketplace.
Other accusations of malfeasance date back to 2017, when Glazer's was hit with a $3.5 million fine for engaging in "pay to play" schemes to win over businesses. In their filing, New York State officials wrote:
"SGWS salespersons were running up large expenses on their corporate credit cards at favored retailer’s establishments, without receiving anything in return, to influence their purchasing decisions, an illegal practice commonly known as 'credit card swipes.'"
New York State Liquor Authority Chairman Vincent G. Bradley commented, “The multitude of violations found during the course of these investigations is truly staggering."
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