FTC Sues Southern Glazer's for Illegal Price Discrimination

 

Southern Glazer's Wine and Spirits, LLC is the largest wine and spirits distributor in the United States with operations in 44 states and Washington, D.C. Its portfolio is 45% wine and 55% spirits. It was the 10th largest private company in the United States in 2022, with sales of approximately $26 billion.

(From NBC News) The Federal Trade Commission announced today a new lawsuit that accuses the largest U.S. distributor of wine and spirits of illegal price discrimination that gave large chains — among them Costco, Kroger and Total Wine & More — much better prices than those offered to neighborhood grocery stores, convenience shops and independent liquor stores.

(The following is a statement from Margie A.S. Lehrman, CEO of the American Craft Spirits Association.) 

The American Craft Spirits Association (ACSA) welcomes FTC’s efforts to crackdown on anticompetitive pricing practices that hurt small independent retailers, who are invaluable partners for craft distillers.

Market access remains one of the biggest challenges facing America’s craft spirits industry. This action by the FTC is an important step to protect small businesses but also should serve as a clarion call to all legislators and regulators to enact policies that enable craft spirits manufacturers to compete in this complex and consolidated marketplace. 

Today, more than 3,000 craft distillers in the United States operate in all 50 states. Despite this number, craft spirits only account for less than 5% of all spirits volume.

At the same time the number of craft distillers continues to rise, the number of wholesalers and retailers continue to consolidate at an accelerated pace raising barriers to market access for small business manufacturers.

The current 3-tier regulatory structure of the beverage alcohol market is outdated and in need of reform. ACSA urges policymakers to develop additional routes-to-market including direct shipping to consumers and retailers. Enacting these measures would result in a rare win-win-win for distillers and consumers as well as our wholesale and retail partners.