The Federal Trade Commission has filed a lawsuit against alcohol distributor Southern Glazer’s Wine and Spirits for alleged price discrimination, as reported in a filing on Dec. 12 in the U.S. District Court for the Central District of California.
According to the complaint, Southern Glazer’s is accused of offering volume discounts and rebates to large national and regional retail chains since 2018, while denying similar offerings to smaller independent businesses. This practice threatens the viability of independent businesses and limits consumer choice in the market, potentially leading to higher prices for consumers.
In response to the allegations, Southern Glazer’s issued a statement on Dec. 12 strongly disputing the FTC’s claims and labeling the lawsuit as “both misguided and legally flawed.” The company asserts that it offers discounts based on the cost incurred to sell different quantities to customers and makes all discount levels available to eligible retailers, including chain stores and small businesses.
The lawsuit alleges that the large-quantity discounts provided by Southern Glazer’s to large retail chain customers are not justified by cost savings and that the company receives “discount support” from suppliers in exchange for favorable pricing. The FTC is seeking a permanent injunction to prevent further price discrimination against small independent businesses by Southern Glazer’s.
The agency claims that these actions violate the Robinson-Patman Act, a law enacted in 1936 to prevent distributors from offering exclusive discounts to larger corporate chains at the expense of small businesses. While it has been over two decades since a lawsuit alleging a violation of the Robinson-Patman Act was filed, the FTC has increased its oversight efforts following an executive order by President Joe Biden authorizing more thorough investigations into potential violations.
FTC Chair Lina Khan emphasized the importance of fair competition and the need to protect small businesses, stating that businesses of all sizes should be able to compete on a level playing field. The FTC’s action aims to uphold the rule of law, promote fair competition, lower prices, and ensure compliance with antitrust regulations.
This development underscores the importance of ensuring fair competition in the marketplace and preventing discriminatory practices that could harm smaller businesses and limit consumer choice. By taking legal action against Southern Glazer’s, the FTC is signaling its commitment to enforcing antitrust laws and protecting the interests of all businesses, regardless of size.
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