FTC Takes Nontarget to Court in Robinson-Patman Act Investigation

By:Lisa A. Houssiere, Alyse F. Stach & Matt Schock (BakerHostetler)

Reports suggest that the Federal Trade Commission (FTC) is utilizing the previously dormant Robinson-Patman Act as the foundation for initiating civil investigations into potential price discrimination among distributors in both the alcoholic and nonalcoholic beverage sectors. These suspicions were recently substantiated when the FTC filed a lawsuit against the prominent wine retailer Total Wine & More in the Eastern District of Virginia. The FTC’s legal action aims to compel the production of documents to support its ongoing probe into Southern Glazer’s Wine & Spirits.

The FTC’s petition against Total Wine seeks information that will assist in its ongoing law enforcement inquiry. Specifically, it seeks to determine whether Southern Glazer’s has (1) engaged in discriminatory practices in its sales to retailers in violation of the Robinson-Patman Act, 15 U.S.C. § 13, as amended, and/or (2) employed other unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act, 15 U.S.C. §45. In a broader sense, the FTC’s investigation is concerned with assessing whether Southern Glazer’s has violated the Robinson-Patman Act by providing preferential pricing and services to certain favored, large chain retailers, such as Total Wine, while not extending these benefits to smaller independent retailers.

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