FTC files impending antitrust lawsuit against Southern Glazer | Wilnesh News

The U.S. Federal Trade Commission is preparing to file an antitrust lawsuit against Southern Glazer’s Wine and Spirits, the largest alcohol distributor in the United States, two people familiar with the matter told CNBC. The lawsuit could be filed within weeks.

The FTC case has not yet been finalized. But a source said the commission is likely to accuse Southern Glazer’s of having been offering “secret kickbacks” to large retail customers and violating the 1936 Act. Robinson-Patman Act. Politico first reported the possible legal action.

Florida-based Southern Glazer’s Wine and Spirits distributes alcohol for more than 7,000 brands in 44 states. The company was founded in 1968 as an intermediary between alcohol producers and the stores where consumers purchase liquor. According to statistics, the company’s revenue in 2023 will be $26 billion Forbes.

The Robinson-Patman Act is a little-known antitrust law enacted in 1936 that prohibits companies from offering one buyer a better price than another for the same goods. No cases have been brought under the law since 2000.

under FTC explanation, the Robinson-Patman Act does not prohibit price discrimination across the board and may allow volume discounts. The law only applies if price discrimination interferes with competition — a charge that is legally “complex” to prove, according to the FTC website.

critic The Robinson-Patman Act famously inadvertently banned discounts that helped lower consumer prices — a dangerous prospect for President Joe Biden, who has staked his economic platform on lowering prices for voters on the cost.

Some believe the law actually makes it illegal to offer discounts on bulk items because smaller buyers may not be able to handle such large quantities, sources said.

The alcohol industry’s fragmented regulatory structure also complicates the FTC’s case. Alcohol distribution laws are often state-specific rather than based on uniform federal policy. That could make it tricky for the FTC to bring a lawsuit against Southern Glazer, one source said.

Spokespeople for the FTC and Southern Glazer declined to comment.

The FTC lawsuit is not the first legal action to accuse Southern Glazer of anticompetitive business practices.

In 2022, alcohol distribution startup Provi (formerly known as Tiz Inc.), be accused Southern Glazer’s and Republic National Distributing Company, another major liquor distributor.

Providence claims the liquor giant has agreed to boycott the startup and encourage other retailers to avoid doing business with it, effectively impeding its ability to compete in the industry, the lawsuit said.

On May 30, the judge reject South Glazer and Republic National requested that Providence’s case be dismissed.

The FTC’s lawsuit against Southern Glazer would join a series of legal actions by the commission that have become a hallmark of aggressive antitrust enforcement under Biden.

In fiscal year 2022, the Federal Trade Commission (FTC) filed 24 challenges to block potential mergers, according to a report. annual report. Yuan, Amazon, Microsoft and hook up is one of dozens of companies the Federal Trade Commission has filed antitrust lawsuits against over the past three years.

“We’ve lived in a regime where the board made deals that were illegal on their face,” FTC Chairwoman Lina Khan said at the CNBC CEO Council Summit in Washington on Tuesday.

“This means we have to spend public resources going to court,” Khan said.