FTC reaches settlement with Southern Glazer’s over allegations of discrimination against smaller alcohol distributors.
The Federal Trade Commission (FTC) announced a significant settlement on Friday with Southern Glazer’s Wine and Spirits, the largest distributor of wines and spirits in the United States. This resolution arises from claims of discriminatory practices against smaller and independent retailers. The FTC initially filed a lawsuit against Southern Glazer’s in December 2024, highlighting that the company had been providing discounts and rebates exclusively to larger retailers, including major chains such as Total Wine, Walmart, and Kroger, while denying similar access to smaller establishments located in close proximity.
The legal foundation of the FTC’s action is the seldom-enforced Robinson-Patman Act of 1936, which allows for volume discounts only when sellers can substantiate the existence of genuine cost efficiencies achieved through bulk sales. Under the terms of the settlement agreement, Southern Glazer’s is mandated to compensate smaller retailers if they experience significant or recurring price discrimination compared to larger stores in the same vicinity. To ensure compliance, an independent monitor will oversee the settlement for a duration of six years, with Southern Glazer’s required to submit comprehensive records biannually.
Southern Glazer’s, one of the largest privately held corporations in the United States, reported billion in revenue from wine and spirits sales to retail customers in 2023. The company is responsible for distributing one-third of all bottles of wine and spirits sold across the U.S. While expressing satisfaction with the settlement that allows for resolution outside of a trial and without an admission of wrongdoing, Southern Glazer’s maintains that it did not violate the Robinson-Patman Act. The company has indicated that the proposed order does not impose broad restrictions on its business practices and does not foresee substantial changes to its operational model.
The settlement specifically pertains to Southern Glazer’s sales to the five largest chain retailers across 26 states, although the FTC’s original lawsuit had alleged discriminatory practices in 33 states. Following further investigation, it was determined that no discrimination had occurred in seven of the states under scrutiny.
The FTC’s action originated during the latter part of the Biden administration. Andrew Ferguson, who became the FTC chairman under the Trump administration in January 2025, initially expressed skepticism regarding the lawsuit, believing that Southern Glazer’s could demonstrate justifiable reasons for the price differences based on varying supply costs for different retailers. Despite these initial reservations, the case advanced after a federal court rejected Southern Glazer’s motion to dismiss in April 2025. Ultimately, Ferguson stated that the settlement represents a constructive resolution that aligns with compliance standards while minimizing costs for Southern Glazer’s, provided the company adheres to legal guidelines.
This settlement underscores the ongoing scrutiny over pricing strategies in the distribution of alcohol and the importance of equitable practices in the retail sector.
