Court Serves Up Early Victory to FTC in First Robinson-Patman Act Enforcement Action in Decades

On April 17, 2025, a federal district court denied a motion to dismiss the first government enforcement action brought in decades under the Robinson-Patman Act (“RPA”), a statute that prohibits price discrimination and other anticompetitive distribution practices.¹ The court held that the Federal Trade Commission (“FTC”) had adequately alleged that Southern Glazer’s Wine and Spirits, LLC (“Southern Glazer’s”), the largest wine and spirits distributor in the United States, discriminated against small, independent retailers by charging them higher prices than large national and regional chains. This decision further bolsters the revival of the RPA and could lead to new risks for manufacturers and distributors in numerous industries.

The RPA was enacted in 1936 to protect smaller retailers with less power to obtain price concessions from sellers than their larger rivals. The RPA prohibits a variety of practices related to reselling goods, including discrimination in price or in payment of promotional services or allowances for downstream sales.² The FTC, the Department of Justice, and private plaintiffs can all enforce the RPA. While private plaintiffs have steadily filed RPA lawsuits in recent years, the RPA had fallen out of favor among regulators and even faced bipartisan calls for its repeal.³ Between 2000 and 2024, the government did not file a single action to enforce the RPA.⁴

As previously reported, on December 12, 2024, the FTC changed course and filed a complaint in the U.S. District Court for the Central District of California alleging that Southern Glazer’s violated the RPA by giving quantity discounts and other rebates exclusively to large chains, even when not justified by any cost-saving efficiencies.⁵ The FTC alleged that Southern Glazer’s charged small, independent retailers “as much as 12% to 67% more for the same bottles of certain wine and spirits than national and regional chains in the exact same geographic area.”

Shortly thereafter, on January 23, 2025, the FTC filed another RPA enforcement action in the U.S. District Court for the Southern District of New York, alleging that PepsiCo, Inc. (“PepsiCo”) unlawfully provided a “big box retail customer” with promotional payments and allowances not offered to that retailer’s competitors.⁶

Southern Glazer’s moved to dismiss the FTC’s complaint, but the court denied the motion on April 17, 2025.⁷ The court found that the FTC had adequately pled the four necessary elements of a “secondary-line” price discrimination claim under the RPA, which involves harm to a discriminating seller’s “disfavored” customers.

• First, the FTC pled that the challenged sales were made in interstate commerce, even though the complaint focused on intrastate sales, because the FTC alleged that Southern Glazer’s “purchased specific products to fulfill the anticipated demands of favored purchasers in several states.”
• Second, the FTC pled that the items sold to different customers were of like grade and quality because the FTC alleged that “large retailers purchased the exact same good at significantly lower prices than small stores” and on similar nonprice terms.
• Third, the FTC pled that Southern Glazer’s discriminated between favored and disfavored buyers by charging smaller purchasers “significantly more than favored chains.”
• Fourth, the FTC pled harm to competition by alleging that larger and smaller buyers competed with each other, and that larger, favored chain stores were able to resell Southern Glazer’s products at retail prices below the wholesale prices paid by smaller, disfavored retailers.

This preliminary victory for the FTC validates the FTC’s decision to revive enforcement of the RPA. However, the FTC’s new leadership may be more cautious in pursuing RPA enforcement actions. Republican Commissioners Andrew N. Ferguson, the current FTC Chair, and Melissa Holyoak dissented from the filing of the Southern Glazer’s and PepsiCo actions, describing the cases as legally flawed and as imprudent uses of the FTC’s enforcement resources.⁸ Still, the Southern Glazer’s court found in favor of the FTC on some legal issues on which Ferguson and Holyoak had expressed doubts, including the case’s connection to interstate commerce. Moreover, Ferguson and newly appointed Republican Commissioner Mark Meador have expressed support for RPA enforcement under certain circumstances. In fact, Commissioner Meador has described the prior enforcement vacuum as “lawless” and argued that RPA enforcement could help lower prices for consumers.⁹

The Southern Glazer’s and PepsiCo enforcement actions could encourage private plaintiffs to file more RPA cases. Indeed, on February 17, 2025, small retail stores filed a class action alleging that PepsiCo discriminated against them in price by selling Frito-Lay snack chips in grocery store sales channels at prices 43–46% lower than the prices PepsiCo charges in convenience store sales channels.¹⁰ The plaintiffs also claim that grocery stores, but not convenience stores, are able to negotiate “allowances” that function as discounts to the list price of snack chips. This class action was filed by the same attorney behind a successful plaintiff-side jury victory in 2024 in a case involving the sale of Clear Eyes branded eye drops.¹¹

Together, these developments have increased the risk of RPA investigations and litigation, especially for companies that sell consumer goods to both smaller retailers and larger chains. Companies should regularly review their pricing practices and promotional allowance programs to ensure compliance with the RPA. Companies should also stay attuned to customer complaints of receiving less favorable or unfair pricing or promotional support. Experienced antitrust counsel can help companies identify the greatest sources of RPA risk and implement effective training and risk-mitigation programs.

¹Order Denying Defendant’s Motion to Dismiss, FTC v. Southern Glazer’s Wine and Spirits, LLC, No. 8:24-cv-2684 (C.D. Cal. Apr. 17, 2025) (Dkt. 72).

²See 15 U.S.C. § 13.

³Antitrust Modernization Comm’n, Report and Recommendations 311 (2007), available at https://govinfo.library.unt.edu/amc/report_recommendation/amc_final_report.pdf.

⁴See McCormick & Co., Dkt. No. C-3939 (F.T.C. Apr. 27, 2000) (the most-recently filed RPA government enforcement action until 2024).

⁵Complaint, FTC v. Southern Glazer’s Wine and Spirits, LLC, No. 8:24-cv-2684 (C.D. Cal. Dec. 12, 2024) (Dkt. 1), available at https://www.ftc.gov/system/files/ftc_gov/pdf/redacted_version_of_complaint_2.10.2025_dkt._57.pdf.

⁶Complaint, FTC v. PepsiCo, Inc., No. 1:25-cv-664 (S.D.N.Y. Jan. 23, 2025) (Dkt. 1).

⁷PepsiCo was granted an extension to file its motion to dismiss until May 23, 2025. See Order, FTC v. PepsiCo, Inc., No. 1:25-cv-664 (S.D.N.Y. Feb. 10, 2025) (Dkt. 23).

⁸Dissenting Statement of Commissioner Andrew N. Ferguson (Dec. 12, 2024), available at https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-southernglazers-statement.pdf; Dissenting Statement of Commissioner Melissa Holyoak (Dec. 12, 2024), available at https://www.ftc.gov/system/files/ftc_gov/pdf/holyoak-statement_southern-glazers.pdf; Dissenting Statement of Commissioner Andrew N. Ferguson (Jan. 17, 2025); available at https://www.ftc.gov/system/files/ftc_gov/pdf/dissenting-statement-commissioner-ferguson-regarding-non-alcoholic-beverages-price-discrimination-investigation.pdf; Dissenting Statement of Commissioner Melissa Holyoak (Jan. 17, 2025), available at https://www.ftc.gov/system/files/ftc_gov/pdf/pepsi-holyoak-dissenting-statement.pdf.

⁹Mark Ross Meador, Not Enforcing the Robinson-Patman Act is Lawless and Likely Harms Consumers, The Federalist Soc’y (July 9, 2024), https://fedsoc.org/commentary/fedsoc-blog/not-enforcing-the-robinson-patman-act-is-lawless-and-likely-harms-consumers.

¹⁰Complaint, Alquosh Enters., Inc., v. PepsiCo, Inc., No. 2:25-cv-1327 (Feb. 17, 2025) (Dkt. 1).

¹¹See Judgment After Trial, L.A. Int’l Corp. v. Prestige Brands Holdings, Inc., No. 2:18-6809 (C.D. Cal. May 28, 2024) (Dkt. 374).

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.