The Federal Trade Commission (FTC) has filed a petition seeking a federal court order against major wine retailer Total Wine to force the company’s compliance in an ongoing antitrust investigation against distributor Southern Glazer’s.
The FTC launched the case against Southern Glazer’s, the largest distributor of wine and spirits in the U.S., in March of this year for alleged discriminatory sales practices. The investigation will determine whether Southern Glazer’s has been unlawfully given preferential pricing and services to large chains — such as Total Wine — that are not being extended to small, independent retailers.
This behavior would violate the Robinson-Patman Act and Section 5 of the FTC Act, which is intended to protect businesses from price discrimination, and “may give favored customers an edge in the market that has nothing to do with their superior efficiency.” According to the Act, any seller “charging competing buyers different prices for the same ‘commodity’ […] may be violating the Robinson-Patman Act.”
Maryland-based Total Wine, which operates over 250 stores across almost 30 states, has been implicated as one of the retail shops that Southern Glazer’s might be giving preferential treatment to. But according to the FTC, Total Wine has refused to comply with the investigation, which has delayed and impeded its progress for over four months. The FTC claims that Total Wines has failed to turn over documents or give permission to reach employees’ files for information pertaining to the case.
If successful, the FTC’s Friday petition would compel Total Wine to comply with an FTC civil investigative demand (CID), an administrative subpoena that seeks documents and other relevant information to the antitrust case.
“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 in a statement. “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.”