By For decades, the Robinson-Patman Act has been something of a sleeping giant in U.S. competition law. Enacted in 1936 to address concerns that large retail chains were receiving preferential pricing that put smaller businesses at a competitive disadvantage, the law remained on the books but was rarely enforced by federal regulators.
That changed in a meaningful way this month.
On October 2, 2026, the Federal Trade Commission (“FTC”) announced a proposed settlement with Southern Glazer’s Wine and Spirits LLC (“Southern”), the nation’s largest wine and spirits distributor, resolving the FTC’s lawsuit alleging that Southern engaged in unlawful price discrimination against small and independent retailers. The settlement represents the FTC’s first Robinson-Patman enforcement action resulting in relief in a generation.
For the wine industry, this is more than an interesting antitrust footnote. The case provides a reminder that pricing practices, discounts, rebates, promotional programs, and other commercial arrangements can raise legal issues that go well beyond the three-tier system and state alcohol beverage laws.
So, is Robinson-Patman back?
Perhaps not in the sense of an immediate wave of enforcement actions—but wine and spirits businesses would be wise to start paying attention.
A Robinson-Patman Refresher
The Robinson-Patman Act generally prohibits certain forms of price discrimination between competing purchasers of the same or similar products when the discrimination has the requisite competitive effect.
The law does not, however, require every customer to receive exactly the same price.
There are important exceptions and defenses. For example, different prices may be justified by legitimate differences in the seller’s costs of supplying different customers. The law also recognizes circumstances involving changing market conditions and a seller’s efforts to meet a competitor’s equally low price. Quantity discounts are not automatically unlawful simply because a large customer receives a lower price.
The practical question is therefore not simply:
“Did Customer A receive a lower price than Customer B?”
It is more complicated:
“Why did Customer A receive a lower price, and can the difference be legally justified?”
That distinction is particularly important in the beverage industry, where pricing can involve volume, delivery costs, promotional programs, geographic considerations, chain-wide agreements, rebates, bill-backs, incentives, and other arrangements that may make two seemingly identical transactions meaningfully different.
What Did the FTC Allege Against Southern?
The FTC sued Southern in December 2024, alleging that the distributor charged independent retailers substantially more for the same wine and spirits products than it charged large national and regional chains.
According to the FTC’s complaint, the alleged disparities occurred even where the independent retailer and the chain retailer were located only a few miles—or, in some instances, a few blocks—apart.
The FTC alleged that large chains such as Total Wine & More, Costco, and Kroger received discounts, rebates, and other pricing benefits that were not similarly available to competing independent retailers. The agency further alleged that the price differences were not justified by actual differences in Southern’s costs of supplying the retailers.
The case therefore presented a classic Robinson-Patman scenario: a large supplier/distributor allegedly giving preferential pricing to large purchasers that compete with smaller purchasers buying the same products.
Southern, for its part, has consistently disputed the allegations. In connection with the settlement, Southern stated that it did not violate the Robinson-Patman Act and did not admit wrongdoing. The company also said it does not expect the settlement to result in material changes to its business or pricing practices.
That distinction matters. A settlement is not the same thing as a judicial finding that Southern violated the law.
What Does the Settlement Actually Require?
The proposed order is significant because it does more than tell Southern, in general terms, not to discriminate unlawfully.
For six years, an independent monitor will review certain transactions involving Southern’s sales to the five largest chain retailers in 26 states. Those states include several major wine markets, such as California and New York.
The order focuses on what are essentially “paired” transactions: sales of the same product to a major chain and to a nearby independent retailer within specified time periods.
The order establishes thresholds for identifying significant and recurring price discrimination. Among other things, recurring discriminatory pricing exceeding $5,000 over a 12-month period can trigger the order’s remedial provisions.
If the monitor determines that Southern has engaged in qualifying discriminatory pricing, the settlement provides a mechanism for compensating the affected independent retailer. In certain circumstances, Southern would pay 1.5 times the aggregated price differential. If Southern does not remedy the violation and the FTC obtains an enforcement order, the potential payment increases to twice the differential.
The order also requires Southern to provide detailed sales information to the independent monitor twice a year.
In other words, the settlement creates an ongoing compliance mechanism rather than simply resolving an old dispute.
Why This Matters to Wine Businesses
The Southern case is unusually relevant to the wine industry because pricing structures in the beverage business are rarely as simple as a posted wholesale price.
Generally speaking, and barring any applicable laws or regulations to the contrary, a supplier or distributor may offer:
- Volume discounts
- Promotional allowances
- Rebates
- Bill-backs
- Chain-specific programs
- Discounts tied to particular purchasing commitments
- Freight or delivery-related adjustments
- Promotional support
- Temporary pricing programs
- Other incentives or allowances
Some of these arrangements may be entirely legitimate. But the Southern settlement is a useful reminder that the existence of a sophisticated pricing program does not necessarily answer the legal question of wehther the resulting price difference is permissible.
For example, a distributor may legitimately incur lower costs serving a large chain that purchases substantial quantities at centralized locations. That cost difference can potentially support different pricing.
But the analysis should not stop at “they buy more.”
If the price difference is substantially greater than the actual cost savings associated with the larger transaction, or if comparable discounts are technically available to smaller competitors but structured in a way that makes them practically unavailable, additional questions may arise.
That is one reason the FTC’s original complaint focused not simply on price differences, but on whether those differences could be justified by legitimate cost savings or other recognized defenses.
The “Available to Everyone” Question
One particularly interesting issue for beverage companies is functional availability.
A supplier or distributor may argue that a particular discount is available to all customers that meet certain requirements.
On paper, that sounds straightforward.
But what if the requirements are realistically achievable only by a handful of the largest retailers?
That does not automatically make a pricing program unlawful. But it is a reason to look more closely at how the program operates in the real world.
For wine and spirits businesses, this is an important distinction.
A promotional or discount program should not necessarily be evaluated solely by asking:
Is this program technically available to everyone?
It may also be useful to ask:
Who can realistically participate, and why?
That type of practical analysis becomes increasingly important when the customers receiving materially different pricing compete directly with one another.
Does This Mean Large Chains Cannot Receive Better Pricing?
No.
This is perhaps the most important takeaway.
Robinson-Patman does not prohibit volume discounts.
Nor does the Southern settlement establish a rule that large retailers and small retailers must always receive identical pricing.
Large customers can create genuine efficiencies. They may purchase greater quantities, require fewer deliveries, use centralized distribution, reduce handling costs, or otherwise cost less to serve.
The FTC itself emphasized that the Robinson-Patman Act permits volume discounts when they are supported by legitimate cost differences.
The issue is whether the pricing difference has a legitimate basis—not simply whether the customers are different sizes.
That distinction should be kept in mind before anyone concludes that the Southern settlement means the end of chain-specific pricing.
What About Suppliers?
Although the Southern case involves a distributor, suppliers should be paying attention as well.
Wine suppliers frequently negotiate distribution and sales programs that ultimately affect the prices at which products reach retailers. A supplier may also provide incentives, allowances, or promotional funds that are passed through the distribution system.
Those arrangements can create complicated questions about who is setting the price, who is receiving the benefit, and whether comparable opportunities are available to competing purchasers.
For suppliers negotiating distribution agreements or commercial programs, it may therefore be worthwhile to understand not only the regulatory requirements of the applicable state alcohol beverage laws, but also the competition-law implications of the pricing structure being contemplated.
This is particularly true for suppliers pursuing national distribution arrangements involving large retail chains.
What About Independent Retailers?
For independent wine and spirits retailers, the settlement may be more immediately significant.
One practical consequence is that an independent retailer may have a stronger basis for asking questions when it learns that a nearby competing chain is receiving substantially more favorable pricing for the same product.
That does not mean every price discrepancy is evidence of illegal discrimination. There may be legitimate cost differences or other explanations.
But the Southern settlement demonstrates that pricing disparities between competing retailers are not necessarily just a fact of doing business.
For independent retailers, keeping records of pricing, discounts, rebates, and comparable transactions could become increasingly important if Robinson-Patman enforcement continues.
Is this the Beginning of a Robinson-Patman Revival?
This is where things get interesting.
The Southern settlement is undoubtedly significant. The FTC itself describes it as its first Robinson-Patman enforcement action in a generation.
But it would be premature to conclude that the FTC is about to launch a Robinson-Patman case against every supplier offering different prices to different customers.
In fact, the current FTC leadership has emphasized a more targeted approach.
FTC Chairman Andrew Ferguson, who had previously dissented from the decision to bring the Southern case, said in connection with the settlement that the agency’s investigation ultimately found no evidence of violations in seven of the 33 states originally examined. He also indicated that the case presented meaningful litigation risks and that the settlement was a practical way to obtain relief.
Commissioner Mark R. Meador likewise indicated that the FTC should consider developing guidance regarding how it views Robinson-Patman enforcement and when it would pursue cases.
That suggests something more nuanced than a wholesale return to the aggressive Robinson-Patman enforcement of the past.
Nevertheless, the message is clear:
The law is still on the books, and the FTC has demonstrated that it is willing to use it.
What Should Wine and Spirits Companies Do Now?
There is no reason for every beverage company to panic and rewrite its pricing structure overnight.
But this is a good time for suppliers, distributors, and retailers to take a fresh look at their commercial programs.
For companies offering different pricing to different customers, some useful questions include:
1. Why are the prices different?
Is there a documented business reason for the difference?
2. Are the differences tied to actual costs or other recognized justifications?
If a discount is described as a volume discount, what cost savings actually result from the volume?
3. Who can participate?
Are discounts and promotional programs genuinely available to similarly situated customers, or are the requirements effectively limited to the largest accounts?
4. Are pricing programs documented?
If the rationale for a price difference is legitimate, it is helpful to be able to demonstrate that rationale later.
5. Are distributors and suppliers aligned?
Pricing programs that involve multiple levels of the three-tier system should be reviewed with an understanding of how the arrangement will operate in practice.
6. Are commercial agreements consistent with the actual pricing program?
Distribution agreements, promotional agreements, rebate arrangements, and other commercial contracts should accurately reflect the program being implemented.
These are not new questions. What is new is the regulatory attention being directed toward them.
The Bottom Line
The Southern Glazer’s settlement does not mean that every difference in wine pricing is now an antitrust violation.
It does, however, make one thing clear: Robinson-Patman is no longer a law that the wine industry can comfortably assume regulators will ignore.
For decades, beverage companies operated in an environment where Robinson-Patman was more likely to appear in an antitrust textbook than in an FTC enforcement action. The Southern case changes that calculus—at least somewhat.
For wine suppliers and distributors, the lesson is not “charge everyone the same price.”
It is: Know why your prices are different. Make sure the difference has a legitimate basis. Document the reasoning. And periodically revisit whether your pricing programs still make sense as your customers, markets, and distribution arrangements change.
For independent retailers, the lesson may be even simpler: if a nearby competing chain appears to receive substantially more favorable pricing for the same wine, it may be worth asking why.
Whether Southern Glazer’s ultimately represents the beginning of a broader Robinson-Patman revival remains to be seen.
But after decades of relative regulatory quiet, the sleeping giant has at least opened its eyes.
For questions related to alcohol beverage law, food labeling, regulatory compliance, or related matters, please contact Lindsey Zahn at Lindsey Zahn P.C. to learn more about how we can assist your business.
DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.
This post is for general information purposes only and is not legal advice. Reading it does not create an attorney-client relationship.
