As we previously reported, the Federal Trade Commission (FTC or the Commission) sued Southern Glazer’s in December 2024, alleging that the wine and spirits distributor favored large retail chains at the expense of independent stores. The FTC challenged discounts and rebates that smaller retailers could not obtain and that, according to the agency, exceeded Southern Glazer’s cost savings from serving larger customers. The distributor denied the allegations. This case was the first Robinson-Patman Act (RPA) litigation that the FTC had filed in more than two decades.
The parties filed a stipulated consent decree in the US District Court for the Central District of California on October 2, 2026, after the court previously denied Southern Glazer’s motion to dismiss the case and the parties conducted discovery. The court entered the consent decree that same day, making its terms effective.
SETTLEMENT TERMS
The settlement establishes a detailed process for comparing the prices Southern Glazer’s charges large chains and smaller retailers, determining when the differences violate the order, and compensating retailers for those violations. It permits some price differences to account for the costs of serving different customers and financial support supplied by wine and spirits producers.
An independent monitor compares prices paid by Southern Glazer’s five largest off-premise retail customers in each of 26 states with prices paid by eligible nearby retailers, generally those with 75 or fewer US stores. The comparisons involve comparable wine and spirits purchased at approximately the same time. The monitor considers the price after all discounts, rebates, and other adjustments, including those that do not appear on an invoice.
Before determining whether a price difference violates the order, the monitor must deduct negotiated allowances for Southern Glazer’s cost savings from serving large chains, an additional 2.5% of the chain’s price, and qualifying differences in supplier funding. For each smaller retailer, the monitor totals the price differences remaining after these deductions, accounting for the number of cases purchased. A violation arises if that total exceeds $5,000 over a 12-month reporting period, unless Southern Glazer’s establishes a defense preserved by the order.
If the monitor identifies an alleged violation, Southern Glazer’s may resolve it within 60 days after notice by paying the affected retailer 1.5 times the full difference between what the retailer paid and what the chain paid on the purchases at issue. That payment would include the portion of the price difference disregarded when applying the $5,000 threshold.
THE COMMISSION’S APPROACH
FTC Chairman Andrew Ferguson supported the settlement despite having opposed the decision to bring the case. In his statement accompanying the settlement, Chairman Ferguson noted that discovery had narrowed the alleged harm and reinforced his concerns about the FTC’s ability to prevail at trial. He nevertheless viewed settlement as an appropriate resolution given the litigation risks and costs facing both sides. He also reaffirmed his willingness to pursue RPA cases in which price discrimination harms smaller competitors and consumers.
Commissioner Mark R. Meador expressed a more measured view, suggesting that the FTC “should consider developing guidance explaining its current views on the RPA’s requirements and the circumstances under which it would pursue an enforcement action” before bringing additional RPA cases. He also suggested focusing any future inquiries on food, groceries, and other consumer-facing sectors.
The FTC took a related step on October 8, 2026, announcing that it had closed a separate investigation of Gildan and S&S Activewear, companies in the t-shirt industry, after the companies removed contractual restrictions on Gildan’s ability to offer certain prices and discounts to S&S’s competitors. The agency investigated Gildan as the seller under Section 2(a) of the RPA and S&S as the buyer under Section 2(f) of the RPA, which addresses knowingly inducing or receiving unlawful price discrimination. That investigation indicates that the FTC is continuing to examine pricing practices under the RPA, such as purchasers’ efforts to secure preferential treatment as well as sellers’ discount practices.
IMPLICATIONS
- A New RPA Settlement Framework? With the first major RPA case from the FTC in decades now settled, it remains to be seen whether the detailed settlement mechanism the FTC adopted in the Southern Glazer’s case will provide a template for other cases or challenges or remain specific to the Southern Glazer’s case.
- RPA enforcement remains on the Commission’s agenda. The Southern Glazer’s settlement and the Gildan and S&S investigation indicate that the FTC remains willing to scrutinize pricing arrangements under the RPA. Chairman Ferguson’s initial objections to the Southern Glazer’s case should therefore not be read as a broader retreat from RPA enforcement altogether. Commissioner Meador’s separate statement regarding the Southern Glazer’s settlement reflects a desire on his part to see the Commission issue RPA guidance.
- Retailers, wholesalers, and distributors should consider reviewing their pricing practices as appropriate. Given that the RPA remains part of the FTC’s enforcement agenda, businesses that are potentially subject to the RPA should continue to ensure that their pricing practices are in line with any applicable requirements.
