FTC Prepares to Sue Southern Glazer’s, Citing ‘Secret Kickbacks’

The ongoing saga between the Federal Trade Commission (FTC) and Florida-based distributor Southern Glazer’s Wine and Spirits continues. According to CNBC, the FTC plans to file its long-expected lawsuit sometime in the next few weeks, with alleged “secret kickbacks” strengthening their case.

The FTC first opened an antitrust investigation into Southern Glazer’s, the largest alcohol distributor in the U.S., in March 2023. The probe sought to investigate if the distributor’s beer, wine, and liquor pricing was in violation of the Robinson-Patman Act and Section 5 of the FTC Act, which both prohibit unfair commerce practices.The Robinson-Patman Act was ratified in 1936 with the intent to protect businesses from price discrimination, which “may give favored customers an edge in the market that has nothing to do with their superior efficiency.” According to its restrictions, any seller charging “competing buyers different prices for the same commodity” would be in violation of the Act.

As part of the ongoing case, the FTC sued beverage retailer Total Wine in October 2023, seeking a federal court order to force the company’s compliance in the investigation against Southern Glazer’s. According to the FTC, Total Wine originally refused to comply with the probe, which delayed its progress for months. The FTC has continued building its case against Southern Glazer’s, and as CNBC reported Wednesday, the suit could finally be filed before the end of the month. According to the news outlet, the crux of the FTC’s case suggests the distributor has been providing “secret kickbacks” to large retailers.

This case is just one example in a series of antitrust cases implemented by the Biden administration. This year, the Justice Department has filed similar lawsuits against Ticketmaster and Apple, and blocked major consumer goods mergers.

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