Southern Glazer’s to pay $5.5m for over-charging late fees

US distributor Southern Glazer’s Wine & Spirits has agreed to a US$5.5 million settlement to resolve a class action lawsuit over alleged illegal late fees.

The payments will be made to California-based consumers and businesses who were Southern Glazer’s customers between 13 June 2020 and 30 June 2023.

The wine and spirits distributor was accused of charging more than is allowed for late fees on the purchase of wine, beer or spirits.

Southern Glazer’s Wine & Spirits ‘strongly denies violating any laws and contends it complied with all applicable laws’.

According to the class action lawsuit, Southern Glazer’s Wine & Spirits charged 2% on late payments. However, California liquor laws only allow companies to charge a 1% per month late fee.

The settlement means class members can receive a proportional share of the net settlement fund, depending on the amount they paid in carrying charges (late fees) during the settlement period.

Furthermore, the distributor will clear US$44.1m of pending late fees. The distributor also agreed to charge only 1% late fees in future.

The amount to be paid to each class member who paid a late fee will be US$10 or more. No claim form is required. The settlement administrator will calculate the amount due to each account and make payments directly.

Based on a review of its records to date, Southern Glazer’s Wine & Spirits estimates there are 73,276 class members.

The company is the biggest alcohol distributor in the US. In October last year, the company unveiled a multi-purpose facility in New York.