A Chicago startup that helps restaurants and bars order alcohol is suing two of the largest wine and spirits distributors in the U.S., alleging they are preventing retailers from using its service.
Provi filed the antitrust lawsuit Tuesday in federal court in Illinois, accusing Southern Glazer's Wines and Spirits and Republic National Distributing Co. of illegally blocking retailers from its ordering platform. Provi alleges that the two distributors have "acted together and individually to boycott, disparage and tortiously interfere with Provi’s business," according to the suit.
The lawsuit follows an executive order signed by President Biden last July on promoting competition in the American economy and a report last month from the U.S. Treasury around promoting fairness in the alcohol industry and better leveling the playing field for small businesses and new entrants to the market.
Founded in 2016, Provi has created a beverage marketplace that simplifies the ordering process between retailers and distributors. Its online platform lets bars and restaurants order all their beverages in one central location, rather than making multiple phone calls and creating additional invoices. Provi also provides companies with data on which drinks are performing well at particular locations.
Provi has raised $125 million to date at a $750 million valuation. In January, the startup announced plans to merge with SevenFifty, a New York-based alcohol e-commerce company. Combined, the companies will have about 300 employees.
Provi's lawsuit alleges that Southern, for example, sent letters and left voicemails to retailers that it would "no longer accept orders transmitted by third-party e-commerce platforms or services, such as Provi, SevenFifty or others." Southern also forced retailers to use its own e-commerce marketplace, according to the lawsuit. Provi claims RNDC has vowed to "block all incoming email traffic and/or orders sent to RNDC using Provi."
An RNDC spokesperson said, “RNDC strongly denies the allegations in the complaint and we intend to vigorously defend the case," according to trade publication Shanken News Daily.
“We have reviewed the lawsuit and believe it to be meritless," Southern executive VP and general counsel Alan Greenspan told Chicago Inno in a statement. "We plan to vigorously defend and ultimately prevail."
"We're a tool to help the industry modernize and move forward," Provi CEO Taylor Katzman said in a statement. "Unfortunately, Southern and RNDC are illegally stifling innovation by blocking retailers from using open market solutions like Provi, which promotes transparency and more efficient operations, particularly for small businesses. They have a tight grip on distribution physically — and now they want to control it and any related next-generation businesses digitally through data."
Provi says it currently services 10% of all bars and restaurants in the U.S. and is active in 35 states.
