FTC Alleges Top Liquor Distributor Favored Costco, Kroger, Others over Small Businesses Elizabeth Conley/Houston Chronicle via Getty Images

The Federal Trade Commission (FTC) alleged in a lawsuit on Thursday that the largest U.S. distributors of wine and liquor engaged in illegal price discrimination by giving an advantage to large chains over mom-and-pop grocery stores.

The FTC complaint alleges that Southern Glazer’s Wine and Spirits, the tenth largest privately held company in the country, deprives small businesses of access to discounts and rebates, making them less competitive to larger national and regional chain stores.

The antitrust agency’s lawsuit claims that the distributor violated the Robinson-Patman Act by giving “steep discounts” without market justification to some retailers.

FTC Chair Lina Khan wrote in a statement, “When local businesses get squeezed because of unfair pricing practices that favor large chains, Americans see fewer choices and pay higher prices — and communities suffer.”

“The law says that businesses of all sizes should be able to compete on a level playing field. Enforcers have ignored this mandate from Congress for decades, but the FTC’s action today will help protect fair competition, lower prices, and restore the rule of law,” the FTC chair continued.

CNBC News reported:

The suit, filed in U.S. District Court for the Central District of California, accuses Southern of price discrimination since at least 2018 up to now.

Southern distributes wine and spirits for many big suppliers, including Pernod Ricard, the supplier of Jameson Irish Whiskey and Absolut Vodka; Bacardi U.S.A., the supplier of Patron Silver Tequila, Grey Goose Vodka, and Bacardi Rum; Diageo, the supplier of Smirnoff Vodka; and Beam Suntory, the supplier of Jim Beam Bourbon and Makers Mark Whiskey, according to the FTC.

Southern Glazer’s Wine and Spirits generates roughly $26 billion in revenue from sales to retail customers in 2023.

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