The Federal Trade Commission (FTC) announced a settlement related to the first Robinson Patman Act complaint brought in over twenty years. The Settlement with Southern Glazers Wine and Spirits will require six years of monitoring by an independent monitor, bi annual price investigations by the FTC and an independent Monitor to ensure compliance, and specified monetary penalties if there are violations where small indpendent retailers are charged more than allowed.
The Robinson Patman Act is an atrophied muscle of federal price regulatory scheme so this is a first step in its physical therapy rehabilitation for federal efforts to examine pricing disparities. Most states have state level Robinson Patman Acts and there are several investigations in state agencies underway under their laws.
This settlement covers 26 states and only addresses wine and spirits. As FTC Commissioner Mark Meador noted in his statement on this settlement, “The Twenty-First Amendment gives States a particularly significant role in regulating the transportation and distribution of alcohol within their borders, and the resulting regulatory regimes vary substantially from State to State. The three-tier distribution system itself, as well as many of the rules governing the relationships among suppliers, distributors, and retailers, are largely a product of these state regulatory choices as well as federal law. Those rules shape pricing and discount practices in ways that make application of the Robinson-Patman Act particularly complicated and can produce pricing differences whose motivation and legal significance depend on state-specific regulatory requirements rather than straightforward evidence of competitive injury or consumer harm.”
It is expected that the Judge will approve this Consent Decree and a Monitor will be appointed in the upcoming month.
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