FTC Said Readying Antitrust Suit Against SGWS Over Pricing

The Federal Trade Commission is said to be targeting Southern Glazer's Wine & Spirits over practices related to how it prices and sells wine and liquor around the country, according Politico, which cited four people knowledgable about the matter.

The FTC's action follows a lawsuit filed last year by Provi, an online retailer, which sued SGWS and Republic National Distributing Co. alleging the two engaged in practices the pushed out smaller businesses. Provi alleged Southern and RNDC blocked and rejected orders from retailers who ordered wines and spirits through Provi and Southern coerced businesses to use its platform instead of Provi.

Neither Southern Glazer's nor the Federal Trade Commission was immediately available to respond to the report.

According to Politico, the lawsuit – if it is filed – would likely be under the 1936 Robinson-Patman Act, which prohibits price discrimination, especially favoring large retailers over small retailers. The last time the FTC brought such a case was more than 20 years ago.

After that, the agency switched its philosophy to focus on whether or not an action resulted in higher prices for consumers.. The result has been that much of the arsenal of antitrust weapons have been unused. But the current FTC chair, Lina Khan, has led efforts to revitalize that part of the agency's practice.

The FTC is understood to be investigating actions by PepsiCo and Coca-Cola Co. that affect pricing in the soft-drink market, as well as the pricing practices of food conglomerate Kraft Heinz.

In March of 2024, Southern had to pay $5.5 million as part of a class action settlement in California for charging illegal late fees to retailers and restaurants.

Critics of the Robinson-Patman Act argue that enforcing it makes it more difficult for companies to offer volume discounts to be passed on to consumers and therefore harms consumers. The Justice Department in 1997, under President Bill Clinton, formally announced it would not enforce the law.

But Khan and her Democratic commissioners have taken the position that it's not up to them to decide whether or not to enforce a law that is currently on the books.

Southern Glazer's is understood to be planning to meet with FTC officials in the coming weeks in an attempt to convince them not to bring the lawsuit.

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