FTC prepares to sue largest U.S. alcohol distributor, alleging 'secret kickbacks'

• The Federal Trade Commission is building a lawsuit against the largest American alcohol distributor, Southern Glazer's Wine and Spirits, sources told CNBC. The suit could be filed in a matter of weeks.
• The FTC's case would likely allege that Southern Glazer's has been providing "secret kickbacks" to large retailers, in violation of an obscure 1936 antitrust law.
• The suit would join a wave of FTC legal actions that have become the trademark of the commission's aggressive antitrust crackdown under President Joe Biden.

The Federal Trade Commission is preparing an antitrust lawsuit against the largest U.S. alcohol distributor, Southern Glazer's Wine and Spirits, two sources familiar with the matter tell CNBC. The suit could be filed in a matter of weeks.

The FTC's case is not yet finalized. But one source said the commission is likely to allege that Southern Glazer's has been providing "secret kickbacks" to large retail customers, in violation of the 1936 Robinson-Patman Act. The potential legal action was first reported by Politico.

Florida-based Southern Glazer's distributes alcohol for over 7,000 brands in 44 states, and reported $26 billion in revenues in 2023, according to Forbes. Founded in 1968, the company serves as a middleman between alcohol producers and the liquor stores that consumers buy from. In 2023, the company reported $26 billion in revenue.

The Robinson-Patman Act is an obscure 1936 antitrust law which forbids companies from offering better prices to one buyer over another for the same commodity. A case has not been brought under the law since 2000.

Under the FTC's interpretation, the Robinson-Patman Act is not a wholesale ban on price discrimination and could allow volume discounts. The law only applies