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The 5 additional distribs pushing back against a subpoena from Southern Glazer's say they struggle to see the relevance of their data to the case brought by the FTC, and seem to find the sensitivity of the info requested disconcerting. The distribs "cannot agree to produce their most sensitive business information for every single transaction over the last six years in every state they conduct business when the majority of that information is likely irrelevant," they told a fed ct in CA last wk. Crucially, these distribs compete with Southern not just for sales to retailers, "but also in securing the right to distribute suppliers' products in a specific jurisdiction or locale," data and AI veep for Breakthru, Elton Martins explained in a declaration attached to the new docs. That only heightens the sensitivity of handing over data on transactions with both retailers and suppliers, including supplier contracts and negotiations over their terms.Leave it to the smallest of the 5 distribs, Winebow (also an importer), to spell out the existential threat posed by the prospect of complying with Southern's request. Southern is the "market leader that is at least over 3000% larger than Winebow," exec veep and cfo Michael Manzo noted. Cooperating would not only "create a staggering burden," it would also "pose a significant risk" to his co, he believes. Handing over "sales and purchase data at the level of granularity Southern is seeking would allow Southern to reconstruct our entire business model," he explained. Forcing such production from all of the co's major competitors is "akin to giving Southern the keys to the alcohol distribution universe."Burden Compiling Data on Many Millions of Transactions Excessive, Distribs Say Trying to total up just how much data Southern seeks, the distribs turned up some eye-popping stats (tho different distribs may be using different methods of totaling up their transactions). Reyes Bev Group completes 1.5 mil transactions per year, it explained. For Breakthru, data associated with Southern's request for 6 yrs or so "would reflect over 145 million individual sales" to 60K retailers "and over 4.6 million purchases of alcoholic beverages from suppliers." Over the time period in question, Johnson Bros made 4.6 mil purchases from over 1,600 suppliers.Collecting Data Gets Complicated, Contracts Even More So A lot of the data and documents requested are not held together and many data points aren't collected regularly, especially on a transaction-by-transaction basis, as requested by SGWS. Distribs cited extensive complications requiring new software, data pulls from multiple sources, manual entry and new calculations. And while fed ct rules don't require creating new docs solely for this purpose, even the task of compiling what they've got "would require them to expend significant resources," the group wrote in a collective response.Delivering supplier contracts and the negotiations that led to them is especially complicated and sensitive. Contracts are guarded quite closely, Breakthru wrote. And they're almost never kept in the same place. With big distribs working with 1,500-2,000 suppliers apiece in multiple states, thousands upon thousands of docs are implicated, many amended in less formal ways over many years. Pulling contracts also requires notification of suppliers and custom redactions to make sure private, non-relevant info isn't disclosed.$200K+ Estimates RNDC, But Southern "Skeptical," Cites Huge Scale of Distrib Bizzes While many distribs estimated the weeks and months of work involved in complying with Southern's subpoena, RNDC quoted at least $200K purely to generate data on its hundreds of thousands of annual transactions with retailers, given cost of additional software and a dedicated worker. But SGWS is "skeptical" of this total, having just produced a whole bunch of data to the FTC. Just yesterday, Southern pointed out that RNDC recently produced a bunch of its supplier contracts in the separate, now settled dispute with Provi (to which it was also party), so producing those docs again shouldn't be too troublesome. It also highlighted that the specific data fields it requested "mirror what the FTC sought from SGWS," so are merely a "starting point." They can be negotiated, as well, it told the court.Again, for Southern, these distribs "cry burden but are simply unwilling to produce any documents," it wrote this wk. And all of these complaints about scope "ring hollow" from some of the "largest wine and spirit distributors in the United States," it explained previously. The "massive" RNDC operates in 39 states with 13K employees, Southern wrote (tho perhaps not accounting for its competitor's recent struggles). "Reyes is the sixth largest privately held company in the US," with distribs in 12 states and 12K employees. Breakthru works in 16 states and Canada with 10K employees, Johnson Bros in 20 states with over 5K. Winebow distributes in 18 states, plus its importing biz. And if they think it's asking too much, that's the FTC's fault, not its own, SGWS repeats.

FTC v SGWS: Data Requested Would Give SGWS "Keys to the Alcohol Distribution Universe"

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