Key Takeaways | Alcohol and Antitrust: Staying Ahead of Competitive Risks in a Shifting Market

Antitrust risks often hide in plain sight for alcoholic, low-alc, and non-alc beverage companies. From category management to retail price maintenance, everyday commercial practices can raise legal concerns when viewed through the lens of broader competition law.

During this webinar, Greg Heltzer, Alva Mather, and Ryan Tisch explained how antitrust concepts apply to beverage distribution, pricing, and supplier-retailer relationships in today’s evolving market and enforcement environment.

Top takeaways included:

1. The current antitrust enforcement approach remains hypervigilant on antitrust issues but is applying a more traditional approach to remedying concerns. In M&A, the Trump administration is focused on identifying problematic transactions that raise clear competition issues, but that it does not intend to use process to obstruct legitimate business and dealmaking Importantly, this administration has signaled a pragmatic approach by accepting remedies like divestitures, where such a fix will address the competitive concerns identified. Cartel prosecution also remains a priority. US Department of Justice’s Assistant Attorney General Abigail Slater stresses that protecting free markets from price-fixing and monopolies is a conservative value.
2. There is a renewed focus on the Robinson-Patman Act (RPA), which prohibits price discrimination. The Federal Trade Commission’s (FTC) lawsuit against Southern Glazer’s shows that regulators, and potentially class action plaintiffs, are still probing pricing discrepancies, especially where smaller retailers appear disadvantaged. Given the continued focus, alcohol suppliers and distributors should be considering whether the RPA applies to their programs or creates an undue risk. In short, companies should be taking stock of existing programs and considering if there are particular facts that could make them a target.
3. Category management is a strategic retail practice focused on data-driven product selection and placement, but it can raise competition concerns based on how it is handled. Retailers often delegate the development of shelf layouts, or planograms, to large suppliers known as “category captains,” who utilize sales data and consumer trends to optimize product offerings. While this collaboration can enhance sales, reduce complexity, and streamline operations, it also presents the opportunity for bias and exclusion to play into the process, particularly if used to disadvantage smaller or emerging suppliers. Although enforcement actions around category management have been limited, concerns remain high. This has prompted ongoing scrutiny by regulatory bodies like the US Alcohol and Tobacco Tax and Trade Bureau and the FTC, who emphasize retailer independence, transparency, and fair competition.
4. The new Hart-Scott-Rodino (HSR) rules mean more scrutiny earlier in the deal cycle. M&A filings now require more information upfront with the filing, including documents, competitive overlap descriptions, and data. For alcohol deals, which often involve overlapping product categories, companies should plan ahead, consider antitrust implications early, position themselves to provide the antitrust enforcers with the information they need for a smooth regulatory review, and address potential questions at the outset.
5. Diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) initiatives may unexpectedly trigger antitrust reviews. The FTC is signaling interest in whether collective industry efforts, like advertiser boycotts or social-impact campaigns, could suppress competition. Companies should ensure such programs are pro-competitive in design and execution.
6. The increasing convergence between alcohol and traditional beverages may complicate regulatory exposure. As alcohol companies expand into adjacent product lines, they may lose the protections of the three-tier system in certain areas and be exposed to new competitive and pricing pressures. Companies in the alcohol industry should maintain robust compliance practices to effectively navigate these competitive risks.