Costco and Walmart Shoppers Risk Losing Bulk Discounts Thanks to a 1936 Law the FTC Just Brought Back to Life

The Federal Trade Commission alleges that Southern Glazer’s Wine and Spirits, the nation’s largest alcohol distributor, violated a 1930s law — the Robinson-Patman Act — by offering larger discounts to retailers that buy in bulk. Southern Glazer’s supplies roughly one out of every three bottles of wine and spirits sold in the United States. The FTC says it charged small liquor stores far more than it charged giants like Costco, Total Wine, and Walmart — and that those price gaps had nothing to do with real cost differences. The case is still active. Discovery is revealing serious problems with the FTC’s evidence. And the outcome could determine whether bulk pricing at America’s biggest retailers is legally protected or not.

Quick Facts: FTC v. Southern Glazer’s Wine and Spirits

Field	Detail
Plaintiff	Federal Trade Commission (FTC)
Defendant	Southern Glazer’s Wine and Spirits, LLC
Law Alleged Violated	Robinson-Patman Act of 1936, 15 U.S.C. § 13
Case Number	8:24-cv-02684-FWS-ADS
Court & Jurisdiction	U.S. District Court for the Central District of California
Judge	Hon. Fred W. Slaughter
Lawsuit Filed	December 12, 2024
Motion to Dismiss	Denied — April 17, 2025
Current Stage	Active discovery — ongoing as of May 2026
Related Case Dismissed	FTC v. PepsiCo, No. 1:25-cv-00664 — voluntarily dismissed May 2025
Settlement Status	No settlement — active litigation
Last Updated	May 17, 2026

What the Robinson-Patman Act Is — and Why It’s Back

Most Americans have never heard of the Robinson-Patman Act. That is exactly why this case matters.

Enacted during the Great Depression to shield small grocers from chain-store pricing power, the Robinson-Patman Act of 1936 targets price differences between buyers in the sale of goods. The idea was simple: if a supplier charges a small store more than it charges a big chain for the exact same product, the small store cannot compete — and competition suffers.

The law sat largely dormant for decades. The FTC has not enforced the Robinson-Patman Act in nearly a quarter of a century. Then the Biden-era FTC, under Chair Lina Khan, decided to revive it.

In the closing stretch of the Biden administration, the FTC sued Southern Glazer’s Wine and Spirits for giving better deals to national chains like Costco, Total Wine, and Kroger while charging independent liquor stores more for the same products. Days before President Trump’s inauguration, it filed a similar suit against PepsiCo, alleging that Pepsi gave pricing advantages to Walmart that were not offered to smaller grocers.

The Trump administration FTC reviewed both cases. It agreed to continue the Southern Glazer’s case but dropped the PepsiCo lawsuit. The Southern Glazer’s case — and the legal question at its heart — remains very much alive.

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How Bulk Pricing Actually Works — and Why the FTC Says It’s Illegal Here

Bulk discounts are the backbone of modern retail. A big reason why warehouse clubs like Costco or big retailers like Walmart have attractive prices is that they negotiate lower prices from suppliers in exchange for large orders. Those savings get passed along to consumers.

The Robinson-Patman Act does not ban volume discounts outright. The law contains an express cost-justification defense: price differentials are lawful when they reflect differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which goods are sold or delivered. The economics are straightforward — a distributor that ships a consolidated truckload of wine to a Costco regional warehouse incurs materially lower per-unit costs than one making dozens of separate deliveries to small retail accounts scattered across a metropolitan area.

The FTC’s argument is that Southern Glazer’s discounts went further than those cost savings can explain. The FTC alleged that Southern Glazer’s discounts could not be justified because the deepest available discounts required purchase levels that only a few specific large chain customers could attain, or could only be earned by combining purchases across many stores or using customer-owned warehouses. The FTC also alleged that independent retailers were often unaware of available discounts, even when it may have been logistically feasible for them to participate.

Southern Glazer’s says the FTC has no evidence to back any of that up. For context on how federal antitrust enforcement affects everyday retail prices, see our breakdown of the Greystar rent price-fixing class action and the broader antitrust enforcement wave hitting American consumers.

What Discovery Is Actually Showing — The FTC’s Evidentiary Problem

The FTC survived a motion to dismiss, but surviving that early hurdle is a low bar. The Southern Glazer’s case remains alive only because a district court denied the company’s motion to dismiss in April 2025 — a low procedural bar that says little about the merits. Ongoing discovery is now surfacing problems with the FTC’s theory that extend well beyond ordinary litigation friction.

The FTC’s central evidence is 17 million “paired transactions” — comparisons between what big chains paid and what small stores paid for the same products. When asked whether the FTC could identify any specific diverted customer, an agency witness responded under oath: “The FTC cannot identify any diverted customer. As of today, discovery is ongoing.” Pressed on whether the FTC could identify a retailer that lost profits due to alleged price discrimination, the same witness admitted: “I can’t identify an instance of a retailer suffering lost profits as a result of discriminatory conduct by Southern.”

There is also a logical contradiction at the heart of the case. To block the Kroger-Albertsons merger, the FTC told an Oregon federal court that large supermarket chains operate in a distinct, concentrated market, meaningfully insulated from smaller retailers and warehouse clubs like Costco. The Robinson-Patman case requires the opposite — that Costco and a neighborhood liquor store compete for the same walk-in customer. The FTC cannot credibly argue both positions.

Are You Affected by This Lawsuit? What It Means for Costco and Walmart Shoppers

This is not a class action. There is no claim form and no settlement fund open to consumers.

But the outcome of this case could affect every American who shops at a warehouse club or big-box retailer. Here is what it means for you:

• If the FTC wins, suppliers may be forced to charge Costco and Walmart the same prices they charge small retailers. Those higher wholesale costs would almost certainly be passed on to consumers through higher shelf prices. The Costco membership model — built on the premise of passing bulk savings to members — would face direct legal pressure.
• If Southern Glazer’s wins — which the current trajectory of the case suggests is more likely — the Robinson-Patman Act’s revival as an enforcement tool will be largely contained, and bulk pricing at major retailers will remain protected as a cost-justified practice.
• If the FTC drops the case — which current FTC Chairman Andrew Ferguson once argued it should — the legal threat disappears entirely, at least from federal enforcement. Private plaintiffs could still sue under the Robinson-Patman Act independently.
• You do not need to do anything right now. No consumer claim is possible in this case. Monitor this case if you shop regularly at Costco, Sam’s Club, Walmart, Total Wine, or Kroger — the outcome will show up in your grocery bill, not in a settlement check.

The PepsiCo Case: What Already Happened

The Walmart-facing Robinson-Patman case moved faster — and it is already over.

In January 2025, days before Trump’s inauguration, the Biden FTC filed a suit against PepsiCo alleging that Pepsi violated the Robinson-Patman Act by providing discounts to Walmart and other big-box retailers that were not offered to smaller grocers.

The three FTC commissioners reviewed the case and voted to dismiss it, arguing that the evidence was weak and the case politically motivated. In May 2025, under now-Chairman Ferguson’s leadership, the commission unanimously dismissed the PepsiCo action.

That dismissal effectively ended the direct Robinson-Patman threat to Walmart’s pricing model — for now. The Southern Glazer’s case, which implicates Costco, Total Wine, and Kroger rather than Walmart directly, is the remaining front.

FTC v. Southern Glazer’s — Full Case Timeline

Milestone	Date
Robinson-Patman Act enacted by Congress	1936
FTC last enforced the Robinson-Patman Act	Early 2000s
FTC investigation of Southern Glazer’s pricing practices begins	Approximately 2022–2023
Biden FTC sues Southern Glazer’s under Robinson-Patman Act	December 12, 2024
Biden FTC sues PepsiCo under Robinson-Patman Act	January 17, 2025
Southern Glazer’s files motion to dismiss	February 3, 2025
Judge Slaughter denies motion to dismiss — case proceeds	April 17, 2025
Trump FTC dismisses PepsiCo case	May 22, 2025
Discovery underway — FTC admits it cannot identify a single diverted customer	March 2026
Southern Glazer’s seeks FTC’s internal Kroger-Albertsons merger materials	January 2026
Case in active discovery	Ongoing as of May 2026
Trial date	TBD — not yet set

Frequently Asked Questions

Is there a class action lawsuit against Costco or Walmart over pricing?

No. The case at issue — FTC v. Southern Glazer’s Wine and Spirits — is a government enforcement action brought by the FTC against an alcohol distributor. Costco and Walmart are not defendants. No consumer class action exists over bulk pricing, and no claim form is available.

What is the Robinson-Patman Act and why does it matter to shoppers?

The Robinson-Patman Act is a 1930s law that prohibits suppliers from offering larger discounts to retailers that buy in bulk when those discounts cannot be justified by actual cost savings. If enforced broadly, it could legally expose the price difference that makes Costco and Walmart cheaper than your local corner store.

Did the FTC drop the Walmart-related pricing lawsuit?

Yes. The FTC voluntarily dismissed the PepsiCo lawsuit in May 2025, which had alleged PepsiCo gave Walmart unfair pricing advantages over smaller grocers. The Southern Glazer’s case — which involves Costco and other large chains, not Walmart directly — remains active.

How strong is the FTC’s case against Southern Glazer’s?

Based on publicly available discovery records, it is weakening. In sworn deposition testimony, FTC witnesses admitted they could not identify a single diverted customer or a single retailer that suffered lost profits as a result of the alleged price discrimination.

Could my Costco membership prices actually go up because of this?

If the FTC ultimately prevailed and courts applied the Robinson-Patman Act broadly to volume-based pricing, suppliers would face pressure to equalize prices across all buyers — raising the cost of goods for high-volume retailers and very likely raising shelf prices for members. That outcome is currently unlikely given the trajectory of the case, but it is the legal risk the case creates.

Is the Robinson-Patman Act still being enforced?

The current Trump-era FTC has signaled it will apply the law selectively — only in cases involving clear abuse of market power, not routine volume discounts. Current FTC Chair Andrew Ferguson dropped a similar case against PepsiCo and has indicated he does not want to use Depression-era law against consumer savings. The Southern Glazer’s case continues because it survived a motion to dismiss, not because the current FTC is enthusiastic about it.

Sources & References

• Federal Trade Commission — official case page: FTC v. Southern Glazer’s Wine and Spirits
• FTC Complaint: Case No. 8:24-cv-02684-FWS-ADS, U.S. District Court for the Central District of California, filed December 12, 2024 — ftc.gov full complaint PDF

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Legal claims and outcomes depend on specific facts and applicable law. For advice regarding your particular situation, consult a qualified antitrust or consumer protection attorney.

Prepared by the AllAboutLawyer.com Editorial Team and reviewed for factual accuracy against FTC official records, federal court docket filings, and verified legal reporting. Last Updated: May 17, 2026.