6 California Liquor Stores Sue SGWS, Allege Antitrust Violations
Six California liquor stores have sued Southern Glazer's Wine & Spirits, alleging it sold bev/al to some customers at lower prices than it sold to the individual stores. The action, if proved, would be a violation of the Robinson-Patman Act (RPA), which makes it illegal for distributors and manufacturers to charge higher prices to "disfavored" customers than the prices they charge to "favored" customers.
For years, the complaint alleges, Southern Glazer's "has continuously violated the RPA by selling" such mainstays as Hennessy, Tanqueray, Bacardi, Captain
Morgan, Grey Goose, Jameson, and Johnnie Walker and other liquor brands "to retail chain stores like CVS, Walgreens, Costco, SuperValu, and Kroger (hereafter “National Chains”) at prices that are far lower than Southern charges to those giants’ competitors for retail-level liquor sales in California."
The plaintiffs are seeking to have the case designated a class action, to recover millions of damages in actual damages plus treble punitive damages, and an injunction prohibiting further price discrimination against them.
The RPA's purpose is to protect individual competitors, the suit says citing Ninth Circuit precedentwhich stated, "competitive injury to individual buyers harms competition generally may not be overcome by proof of no harm to competition.”
But, it adds, the competitive landscape and "individual consumers themselves have also been harmed by Southern’s illegal price discrimination. The discriminatorily high prices charged to Plaintiffs and the class are necessarily passed on (at least in part) to the end consumers who purchase from those stores. Those end customers thus necessarily paid more for the same products
than they would have paid had Southern not discriminated against Plaintiffs, but had instead" complied with the Robinson-Patman Act and California law.
As an example of the price discrimination, the complaint notes that in March "California Albertson’s locations were selling 750 ml bottles of Johnnie Walker Black for $19.99, while Southern contemporaneously sold that same product to Plaintiffs and all members of the class at $22.25, no matter how many cases they purchased.
" Similarly, California Albertson’s locations were selling 750 ml bottles
of Grey Goose vodka for $17.99 each, while the best price Southern
contemporaneously offered to Plaintiffs and all members of the class was $25.08, no matter how many cases they purchased.
" Similarly, in May 2022 California Ralph’s locations were selling 750
ml bottles of Absolut Vodka for $9.99 each, while the best price Southern
contemporaneously offered to Plaintiffs and all members of the class was $13.83 at the highest volume-based discount offered to them, no matter how many cases. Likewise, Ralph’s was selling 750 ml bottles of Jagermeister at $12.99, while the best price contemporaneously offered to Plaintiffs directly from Southern was $18.89, no matter how many cases.
" Similarly in March, Costco stores in California were selling half-
gallon bottles of Jim Beam at $19.99, while Southern’s contemporaneous price to Plaintiffs and all members of the class, for the exact same product, was $22.46."
The complaint goes on to drive home the anti-competitive effects of Southern's alleged action: "In every one of those situations, the only reason the National Chain is able to sell identical products at prices that are below Plaintiffs’ acquisition cost is the illegally favorable pricing that Southern gives to those National Chains."
There aren't any significant difference in the methods or quantities (SGWS) sells and delivers liquor to independent markets versus the individual store locations of National Chains," the suit states, saying this means the "discriminatorily high prices to Plaintiffs and the class are not cost-justified."
The suit also alleges that Southern dispatches merchandisers to National Chain locations but does not provide comparable promotional services to Plaintiffs.
We've asked Southern Glazer's for comment, and will report it when we get it.