June 5th 2024.
The Federal Trade Commission is currently in the process of taking legal action against Southern Glazer's Wine and Spirits for their pricing and sales methods throughout the United States. Being the largest distributor of alcohol in the country, Southern Glazer has been under investigation by the FTC since 2023, which has resulted in a lawsuit being filed under the Robinson-Patman Act, a law that dates back to 1936. This act was put in place to prevent suppliers from offering preferential pricing to certain customers over others.
If the lawsuit is filed, it will be the first time in over 20 years that the FTC has brought a case under this law. The last time the law was enforced was in 2000 with the spice company McCormick, and before that in 1988 with book publishers Simon & Schuster and Random House. While a final decision has not been made yet, the FTC's five commissioners, led by Chair Lina Khan, are planning to meet with Southern Glazer's in hopes of finalizing the case as early as June 2024. This could result in either a federal court filing or an in-house administrative court filing, which would allow the agency to prohibit the company from continuing their questionable business practices.
According to a 2023 report from Forbes, Southern Glazer is ranked as the 10th largest privately held company in the U.S. with an estimated revenue of $26 billion and 24,000 employees. The company distributes over 7,000 different brands of alcohol, wine, beer, and other drinks across the nation. In a similar investigation, the FTC also looked into the pricing practices of Pepsi, Coca-Cola, and Kraft-Heinz products back in 2022, as reported by Politico.
Under the leadership of Chair Lina Khan and fellow commissioner Alvaro Bedoya, both appointed by President Joe Biden, the FTC's goal is to regain enforcement of this legislation by arguing that the agency should have the power to enforce a law that is already in place. The Independent reports that the Biden Administration has been working towards reducing market abuses since 2021 by eliminating certain language from the Reagan Administration's antitrust law. In July of the same year, an executive order was signed specifically targeting "beer, wine, and spirits markets" and instructing the FTC to investigate any distribution practices that could be considered exclusionary, discriminatory, or anticompetitive and ultimately harm smaller businesses or new entrants. This trend of enforcing antitrust laws has also impacted larger companies such as Apple, Amazon, and Facebook's parent company, Meta.
In addition to the FTC, the Alcohol Tax and Trade Bureau of the Treasury Department also plays a role in regulating how alcohol is sold. Their involvement further emphasizes the importance of fair and ethical practices within the alcohol industry.
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