Southern Glazer’s Fails to Dodge FTC Price-Discrimination Suit

Southern Glazer’s Wine & Spirits LLC was unable to convince a federal judge to toss a Federal Trade Commission suit alleging the company illegally sold alcohol products to small businesses at prices far higher than to large national and regional chains.

The FTC sufficiently alleged that Southern Glazer’s discriminated in prices among its customers, Judge Fred W. Slaughter of the US District Court for the Central District of California said. He denied the alcohol distributor’s motion to dismiss, concluding the FTC adequately alleged each element of a claim under the Robinson-Patman Act.

Slaughter’s order comes roughly two weeks after Southern Glazer’s said it reached a deal to resolve antitrust claims in a private suit brought by rival Provi Inc., in which Provi had alleged Southern Glazer’s blocked alcohol orders for retailers that chose to communicate through Provi’s platform.

Southern Glazer’s is the largest US distributor of wine and spirits brands of alcohol including Bacardi, Jim Beam, and Grey Goose.

A Southern Glazer’s spokesperson said it respectfully disagreed with the court’s decision, “which, at this early procedural stage, did not reach the merits of the FTC’s case.”

“As we have said, we offer different levels of discounts based on the cost we incur to sell different quantities to customers and make all discount levels available to all eligible retailers, including chain stores and small businesses alike,” the company spokesperson said. “As we continue to defend ourselves vigorously in this litigation, we remain focused on supporting our suppliers and employees, and providing our customers the best-in-the-industry service for which we are known.”

The FTC sued Southern Glazer’s under the Biden administration, claiming the company violated the Robinson-Patman Act designed to prevent price discrimination, such as when distributors charge competing buyers different prices for the same product. It was the first time since 2000 that the FTC brought an action under the law.

Andrew Ferguson, now FTC chairman, last year dissented in the agency’s vote to bring the case, saying it would likely fail to clear legal hurdles and represent an unnecessary drain on resources.

In his order, Slaughter said the FTC made a plausible inference that Southern Glazer’s discriminated in price between purchases of goods of “like grade and quality,” a requirement to allege price discrimination under the Robinson-Patman Act.

“The Complaint alleges that large retailers purchased the exact same good at significantly lower prices than small stores,” Slaughter said. “Further, the Complaint alleges that small stores and large chains signed contracts that were materially similar outside of pricing. Southern’s arguments do not persuade the court that these allegations are insufficient.”

Slaughter also found the FTC’s complaint sufficiently alleged Southern Glazer’s goods remained “in commerce,” another requirement under the act that goods at issue must be sold in interstate commerce and that one of the discriminatory sales must cross a state line.

“The court finds the Complaint, which alleges Southern purchased specific products to fulfill the anticipated demands of favored purchasers in several states, sufficiently alleges that Southern’s goods remained in commerce under a demand-planning theory,” Slaughter’s April 17 order said.

Southern Glazer’s is represented by Kirkland and Ellis LLP.

The case is FTC v. S. Glazer’s Wine & Spirits LLC, C.D. Cal., No. 8:24-cv-02684, 4/17/25.