U.S. District Court Judge Nancy Maldonado ruled the antitrust lawsuit filed by Provi alleging Southern Glazer and RNDC illegally stifled competition related to the alcohol industry can proceed and move into discovery.

An ongoing antitrust suit by a B2B marketplace against two large national beverage distributors is moving forward.

In March 2022, Provi, an online marketplace that connects buyers with sellers in the wholesale alcohol market, filed a complaint in the U.S. District Court for the Northern District of Illinois Eastern Division alleging that Southern Glazer Wine and Spirits LLC and Republic National Distribution Co. “for illegally stifled competition related to the alcohol industry.”

On May 30, U.S. District Court Judge Nancy Maldonado ruled the antitrust lawsuit alleging Southern Glazer and RNDC illegally stifled competition related to the alcohol industry can proceed and move into discovery.

Maldonado wrote that the “defendants’ allegedly anticompetitive conduct affects both competitors and customers in the relevant markets, making it even more reasonable to infer that defendants’ allegedly anticompetitive conduct harms competition in the relevant markets, as opposed to Provi individual.”

The ruling denied a motion to dismiss by Southern Glazer and RNDC.

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In its original complaint, Provi alleged that “as the industry moves online, defendants want to keep retailers from spending with competing wholesalers and are steering retailers to defendants’ proprietary online alcohol marketplaces, which do not include other distributors’ products. Not only does the defendants’ strategy maintain their control of the distribution markets and extend that control to online alcohol marketplaces, but it also gives them access to valuable purchasing data that further entrenches them with retailers and allows them new monetization streams, including advertising and data analytics.”

Provi’s complaint alleges:

  • Southern and RNDC blocked and rejected orders for wine and spirits products when retailers chose to communicate through Provi.
  • Conspired to boycott Provi by forcing or coercing retailers not to use Provi.
  • In the case of Southern, forcing retailers to use its own ecommerce marketplace by requiring all online sales to come through its own online marketplace — which a Southern sales representative described as “an abysmal failure of epic proportions.”

The case is important for the industry’s future, as it necessarily transitions to digital solutions. “We look forward to our case proceeding and obtaining valuable relief for Provi and the industry more broadly,” says Provi CEO Taylor Katzman.

“We respectfully disagree with the court’s ruling,” says Southern Glazer. “We believe this lawsuit’s claims are baseless and we will continue to vigorously defend the company against these allegations.”

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RNDC declined comment.

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