US liquor distributor Southern Glazer's agrees to pricing restrictions in FTC settlement

By Jody Godoy

Oct 2 (Reuters) - Southern Glazer's, the largest US liquor distributor that carries name brands such as Bacardi and Smirnoff, has agreed not to charge small retailers significantly more than nearby chain stores to settle a US Federal Trade Commission case, a senior FTC official said on Friday.

The FTC has ramped up its focus on affordability issues this year as the midterm elections approach. The agency is considering a new rule to bar misleading grocery and food delivery fees and probing personalized pricing practices.

The Southern Glazer's settlement is aimed at leveling the playing field between independent stores and bigger chains such as Walmart WMT.O, Costco COST.O and Kroger KR.N, which the FTC alleged had received better prices.

For six years, Southern Glazer's will be subject to penalties if it gives its biggest customers in 26 states significantly better prices than independent stores nearby, the official said. A monitor will oversee the settlement, the official added.

Southern Glazer’s Chief Legal Officer Alan Greenspan said the company did not violate the law and has not admitted wrongdoing in the settlement.

"The proposed order does not outright prohibit Southern Glazer’s from engaging in any particular business activity, and we do not anticipate material changes to our business or pricing practices," Greenspan said.

The FTC sued Southern Glazer's in 2024, accusing it of violating the Robinson-Patman Act, a law aimed at protecting small retailers from bigger competitors.

The case marked the first time in decades the FTC had enforced the RPA, which was a priority for former FTC Chair Lina Khan.

Current FTC Chairman Andrew Ferguson had voted against suing Southern Glazer's, saying that while the agency should enforce the RPA, the case was weak.

Passed in 1936 during the Great Depression, the Robinson-Patman Act prohibits a seller from offering different prices for the same goods to different buyers. The law has a few exceptions, such as when shipping costs are higher for one customer than another.