Small businesses were not favored by the top U.S. liquor distributor, according to the FTC.

• Southern Glazer's Wine and Spirits was accused of illegal price discrimination by the Federal Trade Commission, who filed a lawsuit against the company.
• The largest U.S. distributor of wine and spirits is Southern, and it ranks as the tenth largest privately held company in the country.
• The FTC claims that Southern discriminated against small grocery stores, convenience stores, and independent liquor stores in favor of large chain buyers such as Costco and Kroger.

The largest U.S. distributor of wine and spirits is being sued by the Federal Trade Commission for engaging in illegal price discrimination, which allegedly gave large chains, including Costco and Total Wine & More, better prices than those offered to small businesses such as neighborhood grocery stores, convenience shops, and independent liquor stores.

Southern Glazer's Wine and Spirits, a privately held company, is the tenth largest in the US, generating $26 billion in revenues from retail sales in 2023, the FTC announced on Thursday.

Southern, which offers approximately 5,600 wine and spirit brands, allegedly denied smaller businesses access to discounts and rebates, thereby hindering their competitiveness against large national and regional chain stores.

The distributor is accused of violating the Robinson-Patman Act by offering "steep discounts" to a specific group of retailers without any market justification.

Lina Khan, FTC Chair, stated that when local businesses are unfairly priced out by large chains, Americans have fewer options and pay higher prices, resulting in community suffering.

""The FTC's action today will help protect fair competition, lower prices, and restore the rule of law by enforcing the mandate from Congress that businesses of all sizes should be able to compete on a level playing field," Khan said."

CNBC has requested comment on the lawsuit from Southern.

Since at least 2018, Southern has been accused of price discrimination in a suit filed in U.S. District Court for the Central District of California.

The FTC states that Southern distributes wine and spirits for major suppliers such as Pernod Ricard, Bacardi U.S.A., Diageo, and Beam Suntory, which supply brands like Jameson Irish Whiskey, Patron Silver Tequila, Grey Goose Vodka, Bacardi Rum, Smirnoff Vodka, and Jim Beam Bourbon and Makers Mark Whiskey.

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