Report: FTC Planning Lawsuit Against Largest US Alcohol Distributor

Report: FTC Planning Lawsuit Against Largest US Alcohol Distributor
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The Facts

  • Politico has reported that the US Federal Trade Commission (FTC) is planning to sue Southern Glazer's Wine and Spirits — the largest alcohol distributor in the US — for allegedly giving favorable pricing to larger retailers over smaller ones.

  • According to four anonymous sources, FTC staff have recommended suing the distributor under the Robinson-Patman Act, a 1936 law passed to stop suppliers from offering favorable prices to certain retail customers instead of others. It's been 20 years since the FTC last brought a case under that law.

The Spin

Pro-establishment narrative

Protecting smaller retailers and companies from being boxed out by large companies who stifle competition by manipulating pricing is at the forefront of the Biden administration's efforts to make sure the economy is a level playing field. At the same time, enforcing antitrust laws to their fullest extent by filing lawsuits like this is the best way for the government to assure consumers they're paying the fairest prices for goods.

Establishment-critical narrative

If the FTC's goal is to make sure consumers are paying fair prices, it should be careful bringing a suit under a law that's nearly a century old and hasn't been used in a quarter-century. Robinson-Patman could make it illegal to offer discounts that typically reduce costs for customers. The government may be overreaching in this instance.

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