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Feds sue Total Wine in Southern Glazer’s ‘antitrust’ case
The Federal Trade Commission has filed for a federal court order to force Total Wine to comply with requests for documentation in an ongoing investigation into US distributor Southern Glazer’s.
Southern Glazer’s, the largest distributor of wine and spirits in the US, is being investigated by the Federal Trade Commission (FTC) for alleged discriminatory practices in its sales to retailers including Total Wine, as well as allegedly engaging in other unfair methods of competition.
The aim behind the Southern Glazer’s investigation is to establish whether the company “is giving preferential pricing and services to certain, favoured, large chains” such as Total Wine, that it does not offer to smaller independent retailers.
According to the FTC, Total Wine has refused to comply with requests to provide documents and other information for more than four months. The FTC says that Total Wines has “categorically refused” to search its employees’ files for required information relating to the Southern Glazer’s case, and has failed to give any valid reason for its refusal to comply.
The FTC claims that Total Wine’s stalling has impeded and delayed its investigation, and the FTC has therefore turned to a federal court in Virginia to enforce the order, which will see Total Wine directed to supply the documents within 20 days or provide evidence to prove why it should be exempt from doing so.
“A civil investigative demand issued by the FTC is not a voluntary request, it is a demand made by the federal government that companies must comply with,” said Henry Liu, director of the FTC’s Bureau of Competition.
“Failing to comply with a CID ultimately hinders the FTC’s ability to protect consumers and businesses from anticompetitive practices. The FTC will not hesitate to use the full force of the law and take companies to court if they fail to comply.”
Total Wine, based in Maryland, has 257 stores in 28 US states.
In November 2022, the drinks business reported that agents from the Internal Revenue Service (IRS) and the federal Alcohol and Tobacco Tax and Trade Bureau raided the offices of Southern Glazer’s.
The US distribution giant has also previously come under fire from trade officials, receiving a US$5 million fine in 2017 over a “pay to play” case in Pennsylvania in which the company was found to have offered incentives to staff of the state’s liquor control board in order to win business.
The violations uncovered were described as “truly staggering” by one official.
In July 2023, Sheldon Stein, president of Southern Glazer’s, stepped down from the role but will continue to serve as an advisor to the company’s board of managers.
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