Why This Matters to Distributors: The Southern Glazer’s settlement brings the Federal Trade Commission’s first Robinson-Patman Act enforcement action in a generation to a resolution and puts renewed attention on pricing differences between large accounts and smaller competing customers. The proposed order establishes specific conditions for prohibited price discrimination, provides payments to affected independent retailers, and subjects the nation’s largest wine and spirits distributor to six years of independent oversight.
Southern Glazer’s Wine & Spirits has reached a settlement with the Federal Trade Commission that would restrict how the nation’s largest wine and spirits distributor prices products sold to major retail chains and competing independent retailers in 26 states.
The proposed settlement, announced Oct. 2, resolves a lawsuit the FTC filed in 2024 alleging Southern Glazer’s violated the Robinson-Patman Act by giving large retailers access to discounts and rebates that were unavailable to smaller competitors.
The agreement covers all Southern Glazer’s wine and spirits sales, involving its five largest chain customers in the states covered by the proposed order. It also establishes a process for compensating independent retailers if an independent monitor determines that Southern Glazer’s has violated the order.
At the center of the settlement are what the FTC calls “paired” transactions. Those involve Southern Glazer’s selling a product to a chain retailer at one price while selling the same product during the same period to a nearby independent retailer at a significantly higher price.
Under the proposed order, Southern Glazer’s can be found in violation when, among other conditions, those paired transactions involve significant price discrimination exceeding a maximum threshold based on state-specific operating costs and recurring price discrimination exceeding $5,000 in aggregate over a 12-month period.
Southern Glazer’s can resolve a qualifying violation by paying the affected independent retailer 1.5 times the aggregate price difference. If the company does not resolve the violation and the FTC brings an enforcement action and prevails, Southern Glazer’s would be required to pay the retailer twice the aggregate price difference.
An independent monitor will oversee compliance with the agreement, which would remain in effect for six years.
The proposed order covers 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 sued Southern Glazer’s in December 2024, alleging the distributor sold identical bottles of wine and spirits to independent retailers at significantly higher prices than it charged competing chains, including Total Wine, Walmart, and Kroger. In some cases, according to the FTC’s complaint, the competing stores were only a few miles or blocks apart.
The agency also alleged Southern Glazer’s provided large customers with discounts and rebates that were inaccessible to smaller competitors and that those differences were not justified by differences in the cost of distributing products to the retailers. Those remain allegations, and the settlement resolves the case rather than establishing those allegations through a trial.
The lawsuit was the FTC’s first enforcement action under the Robinson-Patman Act in a generation.
Enacted in 1936, the Robinson-Patman Act prohibits certain forms of price discrimination between competing purchasers when the effect may be to harm competition. The law also recognizes defenses and exceptions, including circumstances in which price differences can be justified by differences in the cost of serving customers.
“This settlement marks a significant milestone for the FTC in its enforcement of the Robinson-Patman Act, which Congress enacted to empower small businesses to compete against large ones,” Daniel Guarnera, director of the FTC’s Bureau of Competition, said in announcing the agreement.
The commission voted 2-0 to issue the proposed stipulated order. FTC Chairman Andrew Ferguson and Commissioner Mark Meador issued separate statements.
The settlement is particularly notable because Ferguson dissented when the FTC voted to sue Southern Glazer’s in 2024. At the time, Ferguson said the Robinson-Patman Act remained federal law and should be enforced but disagreed with the commission’s decision to bring the case against Southern Glazer’s.
For distributors outside the beverage alcohol industry, the case provides a new example of federal enforcement of the Robinson-Patman Act involving pricing differences between large accounts and smaller competing customers.
The proposed order does not require Southern Glazer’s to charge all customers the same price. Instead, it establishes conditions for determining when pricing differences involving the chain and independent retailers covered by the agreement are significant and recurring enough to trigger the settlement’s remedies.
That distinction could make the case relevant to distributors that use volume discounts, rebates, special pricing agreements, and other customer-specific pricing programs. The settlement itself, however, applies to Southern Glazer’s and the transactions covered by the proposed order.
The proposed stipulated order was filed in U.S. District Court for the Central District of California. It will have the force of law if approved and signed by the federal judge overseeing the case.
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