The Federal Trade Commission (FTC) alleges that Total Wine & More “will continue to evade its production obligations absent an enforcement order” from the U.S. District Court for the Eastern District of Virginia.
The agency and the national beverage-alcohol retailer are at odds over whether Retail Services & Systems, Inc. (RSSI), Total Wine’s parent company, is required to provide further information under the FTC’s civil investigative demand (CID) as it investigates multi-state wine and spirits wholesaler Southern Glazer’s Wine & Spirits.
The FTC filed a motion last week asking the court to reject RSSI’s motion not to compel it to comply with the CID.
In that motion, RSSI told the court it gave the FTC data from 14 million transactions involving 18,000 products sold by Southern in 19 states and the 38 million retail-level transactions for those same 18,000 products. RSSI said the FTC’s requests for more information could “create a dangerous precedent” and shows the agency is “conveniently ignoring the fact that RSSI and its affiliates are not targets.”
The FTC has also requested “a search of the custodial files of no more than eight individuals using only seven keyword searches” that would demonstrate prices from other distributors, which RSSI has thus far refused to provide.
The agency wrote: “These materials are directly relevant to the Commission’s investigation into whether large chain retailers like Total Wine are receiving discriminatory pricing and services unavailable to small independent retailers in violation of the Robinson-Patman Act, including information relevant to identifying and evaluating instances of discriminatory pricing and services, the effect of such discrimination on the downstream retail market, and potential statutory defenses.
“Contrary to Total Wine’s claim, information relating to Total Wine’s purchases from both [Southern] and competing distributors is probative to the Commission’s assessment of whether Southern’s potentially discriminatory pricing or services are illegal or whether they are good faith attempts to match a competitor’s price or services.”
According to the FTC, RSSI’s most recent motion “relies on hyperbole, misdirection and unsupported musings.”
The FTC argued the additional information it seeks is “relevant and tailored to its investigation” and that “Total Wine cannot sidestep the clear relevance of requested materials by unilaterally declaring that the commission already has what it needs.”
Southern is being investigated for alleged violations of the Robinson-Patman Act, which bars suppliers from offering favorable pricing to larger retailers at the expense of smaller stores. The investigation followed a lawsuit five small wine retailers in California filed against Southern in June 2022, alleging that the multi-state distributor offers lower prices to larger retailers, according to Wine Industry Insights.
The FTC has requested the court to order RSSI to produce the requested information within 20 days of its November 21 filing.