Southern Glazer’s Beverage Co. agreed to pay $12.5 million under a non-prosecution agreement resolving a federal investigation into years of improper payments and benefits to alcohol retailer employees, including grocery chain buyers in California.

Announced Sept. 10, the resolution includes the company’s acknowledgment of responsibility for employees’ conduct involving payments tied to the promotion, purchase and placement of products it distributed.

The Department of Justice said several California-based executives, including vice presidents, participated in the conduct. Benefits included cash, prepaid gift cards, flights, golf trips, resort stays and luxury goods. Employees used third-party vendors and false invoices to conceal the payments.

“Southern Glazer’s employees tried to distort the wine and spirits market in California through bribes and other improper conduct and in the end it was the consumer that lost out,” U.S. Attorney Craig Missakian said in a DoJ statement.

Southern Glazer’s — which dropped “Wine & Spirits” from its company name in July to reflect its product portfolio expansion — also agreed to enhance compliance with federal and state laws prohibiting bribery and improper payments, and to continue cooperating with related criminal prosecutions, including those involving current or former employees.

“We have always had an industry-leading compliance program, and we have redoubled our efforts to make our compliance program an example for any company, within our industry or otherwise,” Southern Glazer’s President and CEO Wayne Chaplin said in a statement. “This conduct does not reflect Southern Glazer’s values, culture, or standards and it will not be tolerated. Our success has always been built on winning the right way. We are gratified to resolve the investigation in this fashion, and to be able to focus on earning the trust of our customers, supplier partners, and employees through ethical business practices, strong compliance oversight, and accountability at every level of the organization.”

Southern Glazer’s said the investigation primarily concerned activities from years ago involving former employees who circumvented compliance controls, including through fraudulent third-party documentation. The company said the Alcohol and Tobacco Tax and Trade Bureau agreed to take no action against it for the conduct covered by the investigation.

The distributor said it cooperated fully and that the agreement credits investments in compliance staffing, policies, monitoring, auditing and internal enforcement. Its obligations extend over two years.

The investigation was handled by the National Security, Cyber & Special Prosecutions Section of the United States Attorney’s Office for the Northern District of California.

Southern Glazer’s Report Identifies Growth Opportunities

Separately, Southern Glazer’s released its inaugural “Raise the Bar: H2 2026 Edition” report Sept. 8, examining opportunities amid declining alcohol consumption and changing consumer preferences.

The report identified five areas: reaching younger legal-drinking-age consumers; expanding growing drink types and package formats; connecting products with drinking occasions; serving both value-conscious and premium buyers; and appealing to consumers moderating their alcohol intake.

Southern Glazer’s said spirits-based ready-to-drink cocktails account for 94% of total spirits volume growth, while cocktails account for 92% of total wine growth. Smaller formats are gaining traction as consumers seek convenience, affordability and ways to try products.

The report also found that non-alcoholic, low-alcohol and functional beverages increasingly complement traditional alcohol purchases. It described opportunities at both ends of the price spectrum, from everyday value offerings to premium products and experiences.

The findings combine third-party industry data with Southern Glazer’s distribution and sales data. The company plans to publish the report twice annually.