The nation's largest wine and spirits distributor will pay $12.5 million to settle a federal bribery investigation that stretched across California's grocery shelves for nearly a decade.
Southern Glazer's Wine and Spirits signed a non-prosecution agreement with the U.S. Attorney's Office for the Northern District of California on Thursday, Sept. 10. The Florida-based company admitted its employees bribed supermarket workers with cash, luxury watches, purses, golf trips, resort stays and prepaid gift cards worth up to $1,000 each to secure prime shelf space for its products, according to Patch.
No Temecula winery has been named in the investigation. The region's 47 wineries sell primarily through tasting rooms and wine clubs rather than the grocery distribution chain at the center of the case.
"Southern Glazer's employees tried to distort the wine and spirits market in California through bribes and other improper conduct and in the end it was the consumer that lost out," U.S. Attorney Craig Missakian said.
Inland Empire ties
Three of the five former Southern Glazer's employees indicted on March 3 live in the Inland Empire and Southern California: Ryan Dow, 40, of Upland; Stephen Magliocco, 47, of Trabuco Canyon; and Adrian Ruiz, 54, of Corona. Michael Dehdashtian, 48, of Lake Forest and Loratina Muscara, 64, of Livermore were also charged.
The San Francisco Chronicle reported that the scheme centered on a lead wine buyer for Albertsons stores in California who met twice a year with Southern Glazer's executives to decide which products would be stocked and promoted. That buyer, Patrick Briones, pleaded guilty to accepting bribes.
Prosecutors said the payments were concealed through third-party vendors and falsified invoices, documented internally as "creative incentive" payments. The conduct violated the alcohol industry's three-tier system, which keeps producers, distributors and retailers independent of one another.
Temecula's direct-to-consumer model
Southern Glazer's is the largest alcohol distributor by volume in California, but Temecula Valley's 47 wineries operate largely outside the grocery distribution chain the bribery scheme targeted.
The Temecula Valley Winegrowers Association said in an Aug. 28 statement to NBC 4 that the region's wineries are predominantly direct-to-consumer businesses, with the vast majority of wine sold in tasting rooms, through wine clubs and to local buyers. That statement addressed trade policy concerns, not the Southern Glazer's case specifically.
Nationally, tasting rooms and wine clubs account for 53% of the average winery's sales, according to Silicon Valley Bank's 2026 wine industry report. Some regions rely on direct-to-consumer channels for as much as 78% of revenue.
What happens next
Under the non-prosecution agreement, Southern Glazer's will pay the first $6.25 million within 15 business days. The remaining $6.25 million is due within 12 months. The company expanded its compliance staff by 85% and boosted compliance funding by more than 65% between 2022 and 2024.
Southern Glazer's removed several vice presidents and other managers and replaced senior leadership for California and the West Region. Wayne E. Chaplin, the company's president and chief executive, said the conduct does not reflect the company's values or standards and will not be tolerated, according to the Los Angeles Times.
Individual criminal cases against the former employees and other industry figures remain ongoing.
