Southern Glazer’s — the largest alcohol distributor in the United States — is being targeted by the Federal Trade Commission (FTC) in a new antitrust probe investigating how the company prices its beer, wine, and liquor. Sources report to Politico that the FTC is seeking information regarding the distributor’s potential violations of the Robinson-Patman Act and Section 5 of the FTC Act.
Ratified in 1936, the Robinson-Patman Act is intended to protect businesses from price discrimination, which “may give favored customers an edge in the market that has nothing to do with their superior efficiency.” According to the Act, any seller “charging competing buyers different prices for the same ‘commodity’ […] may be violating the Robinson-Patman Act.”
As such, the three anonymous sources bited by Politico claim that the investigation is looking into sales data from Southern Glazer’s and its competitors, as well as information regarding “pricing and benefits Southern Glazer’s offers to retailers including quantity-based discounts, rebates, promotion, as well as marketing, warehousing, merchandising, and other services.”
In regards to potential violations of Section 5 of the FTC Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce,” the FTC is examining how Southern Glazer’s chooses who and where it works with. Additionally, the three sources claim that the probe is also investigating whether the company limits distribution to certain retailers.
While Southern Glazer’s is the only known subject of the investigation to date, the probe could be indicative of the Biden administration’s larger move toward increased control over companies suspected of antitrust violations. In 2021, the President issued an executive order specifically targeting competition in the beverage alcohol space, calling for the end of “unlawful trade practices in the beer, wine, and spirits markets, such as certain exclusionary, discriminatory, or anti-competitive distribution practices that hinder smaller and independent businesses or new entrants from distributing their products.”
The investigation marks the first time a corporation will be probed for potential offenses of the Robinson-Patman act in over two decades.
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