Top U.S. liquor distributor favored Costco, Kroger, other chains over small businesses: FTC

The Federal Trade Commission in a new lawsuit accuses the largest U.S. distributor of wine and spirits of illegal price discrimination that gave large chain buyers, including Costco and Kroger, much better prices than those offered to neighborhood grocery stores, convenience shops and independent liquor stores.

The distributor, Southern Glazer’s Wine and Spirits, is the tenth largest privately held company in the United States, generating about $26 billion in revenues from sales to retail customers in 2023, the FTC said Thursday in announcing the suit.

The complaint says Southern deprived smaller businesses of access to discounts and rebates, which harmed their ability to compete with large national and regional chain stores.

“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,” said FTC Chair Lina Khan in a statement.

“The law says that businesses of all sizes should be able to compete on a level playing field,” Khan said. “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 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 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.

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