FTC Lodges Lawsuit Against Southern Glazer’s Over Pricing

After an investigation over the past two years, the FTC has filed suit against top U.S. wine and spirits distributor Southern Glazer’s, alleging that its pricing practices violate the 1936 Robinson-Patman Act, which hasn’t been the basis of an FTC lawsuit in decades. The suit was filed in the U.S. District Court for the Central District of California, with the FTC’s commissioners voting 3-2 in favor of the action.

The FTC’s complaint alleges that Southern has undermined competition by selling wine and spirits to small, independent businesses at prices that are “drastically higher than what Southern charges large chains.” The suit seeks an injunction prohibiting the alleged price discrimination, which the FTC says will create a more level playing field among retailers of various sizes.

In a statement following the news, Southern Glazer’s responded, “The RPA is a Depression-era federal antitrust law that has not been enforced in decades because of bipartisan concern that enforcement leads to higher prices for consumers. This suit was authorized by a 3-2 vote of the FTC commissioners along party lines, with dissents issued by Commissioner Holyoak and Commissioner Ferguson, whom President-elect Trump has selected to chair the FTC in his administration.

“The FTC’s lawsuit takes issue with the use of volume discounts that Southern Glazer’s—and nearly every distributor of consumer products in the country—uses to lower customers’ costs and enable consumers to pay lower prices for the everyday goods they need,” the distributor added. “Southern Glazer’s strongly disputes the FTC’s allegations and will defend itself vigorously in this litigation.”

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