How to Join Forces To Take on Wine & Spirit Distributors Southern-Glazers

The recent lawsuit against Southern Glazer’s Wine and Spirits filed this month in a California federal district court accuses the wine and spirits distribution giant of defrauding not just the plaintiff in the case, but retailers across the state and country. As I noted in a previous post, if even half the accusations in the suit are true you’ve got a degree of fraud and illegality that is shocking. Moreover, the complaints listed in the lawsuit include actions that retailers and restaurateurs have somewhat quietly acknowledged go on regularly.

I recently spoke with Kelley Gelini of Wakeford Law, one of the principal attorneys working on the case of Nguyen, et al. v. Southern Glazer’s Wine and Spirits now in the United States District Court of Nothern California. I asked her about the meaning of the case and efforts she is making to bring the case to class action status.

Why is this lawsuit of importance to the beer, wine and spirits industry in America, and not simply to the primary plaintiffs?
According to its website, Southern Glazer’s distributes more than 150 million cases of wine and spirits annually, and covers nearly 90% of the legal drinking age population in the United States, making it the country’s largest distributor of wine and spirits. As detailed in the lawsuit, Southern Glazers has engaged in a long term unlawful practice of using the account numbers of its own customers for illegal, fraudulent and anticompetitive purposes. It is clear that Southern Glazers is harming its own customers by these practices. Perhaps less obvious is the effect these same illegal practices have on suppliers who struggle to bring their products to market, and smaller distributors who are virtually crushed by Southern’s anticompetitive tactics.

This lawsuit has the potential to bring about powerful change in the wine and spirits industry at all levels of the 3 tier system. 

2. In proceeding with the lawsuit, what kind of information are you seeking from retailers as well as others who have worked in the wholesale and producer sectors of the alcohol industry?
We would like to hear from any Southern Glazers customer who has received shipments of products from Southern that they did not order, or who was charged for products they did not order, or who was forced to purchase products they did not want in order to get those they did. We would also like to hear from any retailer who suffered tax implications from any of these types of fraudulent practices. We would especially like to hear from anyone who has documents such as statements or invoices which reflect any of the above-described practices.

We also invite any suppliers who are either currently or formerly represented by Southern Glazers and who believes their route to market was blocked or hindered by virtue of this representation to contact us. And finally, we would like to hear from other distributors who struggle to compete in the face of Southern’s anti-competitive tactics.

We invite anyone with information to email us at information@wakefordlaw.com or kbarrett@scalaw.com, or contact us by phone to 415-578-3510 or 510-891-9800.

3. Can a retailer in California or outside the state join the lawsuit as a main plaintiff or as a member of the class you are gathering as part of the suit?
Yes.

 4. What prompted the filing of the lawsuit?
Initially, we were contacted by one retailer whose Southern Glazers account was fraudulently charged by Southern Glazers for products never ordered nor received. Once we began to investigate this particular retailer’s case, we were astounded by the sheer numbers of other retailers who have been damaged by these very same tactics.

5. What kind of response or feedback have you received from the industry, including from wholesalers, retailers, and individuals working in those sectors?
The response has been absolutely overwhelming. We have been contacted by literally hundreds of people including other of Southern Glazers’ affected customers, suppliers, and even distributors. There is a common theme here – hundreds, if not thousands, of Southern Glazers own customers who trusted Southern Glazers to treat them fairly, and hundreds, if not thousands, of customers who were harmed by Southern Glazers illegal, fraudulent and anti-competitive practices.

It’s hard to say how this lawsuit will end up. It is, however, far more likely that justice will be done if any retailers or restaurateurs who experienced any of what Ms. Gelini mentions comes forward and works with her and her colleagues.

 


5 Responses

  1. Paul Moe - July 24, 2017

    I read today in sn Industry News Update daily email that the TTB has begun the same investigation in Miami, which is where Southern-Glazers sleeps. The report was from Wine and Spirits Daily, which requires a subscription to read their articles. The Update stated the investigation had just begun, and since the “pay-to-play investigations are pretty complex and tend to take longer to resolve”, it will be some time before they announce their findings. News at 11, film to follow.

  2. Ralph Armbruster - July 25, 2017

    I worked for Southern glazer when it was southern wine and sports Inc. I worked for them for 27 years part of that time was selling off Sale and on sale, my supervisors did not ask me to sell or do anything to jeopardize the company. I am shocked by this accusation and am appealed by This! Sws was always aware of misrepresenting the company in any way, I retired in 2009 sorry to hear that new management has the issues.

  3. Josh - July 25, 2017

    Sounds about right.

  4. Guy Azera - July 29, 2017

    The comment from Ralph Armbruster is rather surprising as one : there has never been a Southern Wine and Sports inc. but rather a Southern Wine and Spirits inc.
    SWS reputation has clearly been described multiple times as a company that does not play by the rules, they write the rules so that they can have a monopoly of distribution where ever they are.
    My little knowledge comes from my Nevada experience against them in district court and supreme court. All I can tell you is that both Courts are manipulated by SWS.
    Their own lawyer is their own lobbyist and when your last name is REID, all the senators seating at the legislative sessions are very easily persuaded that whatever bill is presented to them to amend The Nevada Revised Statutes as it pertains to liquor , distribution, the bill will become LAW even if it affects a pending case in District Court.
    This, in essence, is the way that SWS kills its competition by litigating smaller distributors till they run out of money to fight them or in my case to obtain a judgement against a distributor asking for millions of dollars of legal fees forcing the distributor to file bankruptcy and I am not talking about chapter 11 but Chapter 7.
    SWS does not fairly compete as it is not in their business model.
    From a business practice standpoint, SWS

  5. James Wilfield - July 30, 2017

    Hmmm Here is the other side of Guy’s story listed above. Looks like he was the one engaging in shady business practices including avoiding paying state taxes
    https://vegasinc.lasvegassun.com/business/2014/jun/06/judge-awards-ruvos-company-5-million-plus-case-aga/


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