Why the RNDC and Southern Settlement with Provi Matters for Craft DistillersSource:
https://distilling.com/
May 15, 2025
Big waves are rarely created in the liquor marketplace, but the recent announcement that Southern Glazer’s Wine and Spirits, LLC and its affiliates (collectively, “Southern”) and Republic National Distributing Company, LLC and its affiliates (collectively, “RNDC”) are agreeing to settle an anti-trust lawsuit with Provi constitutes a major event.
Southern and RNDC are the two biggest wholesalers in the country and hold great sway over the liquor industry. Their political power and well-funded legal teams make them the Leviathan of the liquor industry. In other words, they are used to getting their way.
In 2022, Provi — a company not many people had heard of — filed a federal lawsuit against the two industry giants accusing them of committing numerous violations of the Sherman Anti-Trust Act and numerous state legal provisions. The suit claimed that, between 2016 to the second half of 2021, Southern and RNDC sales through the Provi platform totaled nearly $200 million. Then, the suit claims, Southern and RNDC “began to coordinate and collude” to stop fulfilling orders through Provi. “[A]fter initiating the boycott, these combined sales numbers dropped precipitously,” the suit claimed. The suit’s request for relief included an order awarding treble damages, plus attorney fees.
Three years later, RNDC and Southern have now both settled with Provi for undisclosed sums. This is staggering because it was so unexpected, and because of the allegations that RNDC and Southern tried to use their market power to knock Provi out of the marketplace. Not only did they not succeed, they paid a price for doing so.
But we also must look at what this settlement means for the marketplace. The settlement cements Provi’s place in the market, means greater access to the marketplace for small producers and that Southern and RNDC will need to work with Provi.
What is Provi?
Provi is an online marketplace that facilitates transactions between retailers and distributors. Its innovative approach allows for greater choice for retailers and more exposure for smaller brands.
To illustrate, let’s say a retailer desires to stock a coffee flavored whisky. Under the traditional model, it can search what individual wholesalers maintain in their inventory. If the retailer desires, it can look for this niche product from numerous wholesaler sources, which requires going through numerous systems. After finding one they want to order, they would then contact the wholesaler’s sales representative.
Provi changed the paradigm and created market efficiencies by allowing retailers to utilize a single database to search numerous wholesalers and suppliers who can legally self-distribute in a state to find that coffee flavored whiskey.
This allows retailers to compare quality and price, and allows a small supplier not represented by a major wholesaler to serve retailers it would otherwise not have access to. Furthermore, retailers can order directly through Provi’s online system instead of placing orders with the wholesaler’s sales representative. As numerous retailers can tell you, wholesaler sales representatives are often stretched too thin and it can be difficult to complete transactions in a timely manner.
Provi’s services did not go unnoticed in the marketplace, and it grew rapidly. In 2021 Provi was in 11 states. Less than a year later it was in 35 states. Its services were praised not only by national retail accounts such as P.F. Chang’s but also by large suppliers such as Brown Forman. By providing greater selection and efficiencies for retailers and detailed data on liquor ordering trends for suppliers, Provi began developing a position in the marketplace.
The only ones not so happy with Provi were Southern and RNDC.
The Conflict
Provi’s success in providing solutions and expanding the marketplace posed a threat to Southern and RNDC. Both offered online ordering for retailers and data for suppliers through their own online platforms (Southern’s Proof platform and RNDC’s eRNDC platform).However, RNDC and Southern’s platform was narrower in scope than Provi’s.
An online marketplace is attractive because it provides more potential revenue streams, including data analytics that a business can sell to the wine and spirits industry and revenue from selling advertising to suppliers.
RNDC and Southern were clearly motivated to enhance their own revenue streams and, according to the complaint allegations, to take out the only competitor, Provi. Sometime in 2021, both Southern and RNDC decided they would no longer work with Provi, and would not accept orders that retailers “choose to submit through Provi’s marketplace.” (page 4 of the complaint). From early 2016 to the second half of 2021, it is estimated the two wholesalers had fulfilled nearly $200 million in orders from retailers through Provi.
Cutting Provi off from Southern and RNDC portfolios became problematic, as many popular liquor brands are available only through their networks and in numerous states they control a dominant share of the market. In 34 states, Southern and RNDC control over 50% of the market, and in 10 states they control 80% of the market. In California at the time of the lawsuit RNDC controlled distribution of Tito’s and Jack Daniels, and Southern distributed Bacardi and Jim Beam. Without access to these brands, Provi could not facilitate a transaction of the most popular liquor brands.
Provi’s Lawsuit
The allegations stated that Provi had numerous national accounts including Darden, Cinemark, AMC Theatres, Chili’ s,Red Robin, Benihana, and P.F. Chang’s and pilot programs in place for Buffalo Wild Wings, Hilton, Circle K, Applebees, and the Cheesecake Factory. They also stated that many of these national accounts stopped working with Provi or did not go ahead with the pilot program based on RNDC and Southern’s boycott of Provi.
Left with little alternative when there are two industry Levithans fighting you in the marketplace and trying to take you out, Provi turned to the court system and filed suit. In 2025, RNDC and Southern separately reached agreements in principle with Provi that will bring the case to a conclusion The settlement agreement has not yet been finalized by the court, but it is on its way to the finish line. The terms of the settlement are not public.
Why Does This Matter for Small Brands?
A strong Provi is good for the industry. Proof and eRNDC only carry their respective owner’s inventory, which means limited choice and pricing options for retailers. No products from small distributors or suppliers who can legally self-distribute are available. Unlike Southern and RNDC, Provi is not limited to its own portfolio of products. It provides an open market with more free choice — and more potential exposure for smaller brands.
In the end, Provi did the industry a favor by filing this case and being successful. It opened up a liquor market that is all too often too exclusive. A world where a giant wholesaler dictates the ordering platform is a world with no alternatives possible, and a market that favors the few and excludes the many.