Southern Glazer’s Wine & Spirits agreed to six years of pricing restrictions under a settlement announced Oct. 2 by the Federal Trade Commission, resolving allegations that the beverage alcohol distributor illegally favored large retail chains over smaller competitors.

The proposed order covers nearly all wine and spirits sales to Southern Glazer’s five largest chain customers in each of 26 states. An independent monitor would oversee compliance, with payments to affected independent retailers if the company violates the settlement’s terms. The order requires approval by a federal judge.

The FTC filed its lawsuit in December 2024 under the Robinson-Patman Act, alleging Southern Glazer’s offered large retailers discounts and rebates unavailable to smaller businesses and unjustified by distribution cost differences. The agency said independent stores sometimes paid significantly more for identical products than nearby chains, including Total Wine, Walmart and Kroger.

The settlement targets transactions in which nearby retailers buy comparable products around the same time at substantially different prices. Enforcement would apply when qualifying excess payments by an independent retailer exceed $5,000 over a 12-month reporting period, subject to specified allowances and defenses.

Southern Glazer’s could resolve an identified violation by paying the affected retailer 1.5 times the qualifying excess payments within 60 days of notice. If the company fails to remedy the violation and the FTC prevails in an enforcement action, the payment would double.

The Commission voted 2-0 to approve the proposed order, filed in the U.S. District Court for the Central District of California.

Southern Glazer’s denied wrongdoing. Chief Legal Officer Alan Greenspan told Reuters the company did not violate the law and had not admitted wrongdoing in the settlement.

“We do not anticipate material changes to our business or pricing practices,” Greenspan said.

The pricing agreement follows a separate $12.5 million resolution announced Sept. 10 involving a federal investigation into improper payments and benefits to alcohol retailer employees, including California grocery chain buyers.

In that matter, Southern Glazer’s entered a non-prosecution agreement with the Department of Justice and acknowledged responsibility for employees’ conduct. Prosecutors said California-based executives and employees provided cash, gift cards, travel and luxury goods connected to product purchases and placement, using third-party vendors and false invoices to conceal payments.

The distributor also agreed to strengthen compliance and cooperate with related criminal prosecutions. Southern Glazer’s said that investigation primarily concerned former employees’ activities from years earlier and that it had expanded compliance staffing, monitoring and auditing.