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Southern Glazer’s hit with fraud lawsuit

A nationwide class action has been brought against Southern Glazer’s Wine & Spirits, accusing the US drinks distribution company of “unfair, unlawful, deceptive, and fraudulent” business practices.

A nationwide class action has been brought against Southern Glazer’s Wine & Spirits

The lawsuit was filed yesterday, 5 July, by Scott Cole & Associates, APC and Wakeford Gelini on behalf of James Nguyen, former liquor license holder for Arena Restaurant and Lounge in California, as well as on behalf of “all entities or persons who maintained an open account with Southern Glazer’s during, at least, the last four years”.

According to the complaint, Nguyen recently “found that he had been assessed thousands of dollars in taxes for liquor he supposedly purchased, but did not purchase, from Southern”. The suit alleges that Southern Glazer’s “knowingly engaged in unfair, unlawful, deceptive, and fraudulent business practices” regarding its sales and distribution scheme.

It accuses Southern of providing “class members” account numbers and/or government agency-provided liquor license numbers to third-parties without their knowledge. It adds that Southern would have reason to know that this information would be used by the third parties to charge alcohol to the accounts, create tax liabilities for class members and/or threaten their liquor licenses and business operations.

The class action also alleges that Southern Glazer’s allows its employees to purchase alcohol on the accounts or licenses of class members without their knowledge, and to provide these details to third parties who “then purchase alcohol by assuming class members’ business identities”.

The document claims that the drinks distributer sells and distributes alcohol “at reduced prices, if not free of charge” to persons or entities who “may or may not” hold valid liquor licenses, as well as “selling liquor to different parties at different prices”.

Other allegations state that the firm allowed employees to buy alcohol on class members accounts using cash, and then stored it in order to meet sales quotas; allowed its employees to buy alcohol on class members accounts, later returning it without refunding the money; and created unfair competition – giving away alcohol by printing sample labels for regular bottles.

The firm is also said to have falsified sales documentation, and unlawfully pressured retailers about the practices detailed above by threatening to cut off their supply.

According to the document, class members “had no way of knowing about Southern’s unlawful sales and distribution scheme”.

The plaintiff is seeking “damages, interest thereon, restitution, injunctive and other equitable relief, an accounting of all monies unlawfully collected and held by Southern, and reasonable attorneys’ fees and costs” as well as “disgorgement of all benefits Southern has enjoyed from its numerous unlawful and/or deceptive business practices”.

A spokesperson for Southern Glazer’s told The Spirits Business: “We have just received a copy of the lawsuit and are reviewing the information. It is premature for us to comment any further at this time.”

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