The US Federal Trade Commission (FTC) has initiated proceedings against beverage company PepsiCo, alleging discriminatory pricing practices that favoured an unnamed major retailer.
A source has confirmed to Reuters that the retailer in question is Walmart.
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The lawsuit, filed on 17 January 2025, contends that PepsiCo’s preferential treatment of a retailer constituted a breach of the Robinson-Patman Act (RPA), a legislation designed to protect fair competition by prohibiting anticompetitive price discrimination.
According to the FTC, PepsiCo’s actions have systematically disadvantaged a broad spectrum of retailers, from substantial grocery chains to independent convenience stores, by consistently bestowing advantages such as promotional payments upon the retailer.
These benefits were allegedly withheld from other retailers, engendering an uneven playing field and contributing to inflated consumer prices.
FTC chair Lina Khan said: “When firms like Pepsi give massive retailers a leg up, it tilts the playing field against small firms and ultimately inflates prices for American consumers.
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By GlobalData“The FTC’s action will help ensure all grocers and other businesses — no matter the size — can get a fair shake and compete on the merits of their skill, efficiency and talent.”
PepsiCo has contested the FTC’s charges, maintaining that its commercial practices align with industry standards.
“We do not favour certain customers by offering discounts or promotional support to some customers and not others,” the company stated in a response reported by the Associated Press.
The complaint, lodged in New York, remains partially sealed due to confidentiality provisions safeguarding sensitive information about PepsiCo and Walmart.
However, the FTC has signalled its intention to petition for the removal of these redactions to fully expose the extent of PepsiCo’s alleged RPA infractions and their impact on competitor pricing.
Walmart has not responded.
The case represents a significant step in the FTC’s revitalised enforcement of the RPA.
The commission alleges that PepsiCo violated Sections 2(d) and 2(e), which prohibit companies from providing promotional payments or services “in connection with the processing, handling, sale or offering for sale” of goods unless these payments or services are made available to competing customers “on proportionally equal terms”.
Two commissioners have issued dissenting statements regarding the non-alcoholic beverages price discrimination investigation. Commissioner Andrew Ferguson argues that the lawsuit was initiated based on “little more than a hunch”.
The dissenting statement of Commissioner Melissa Holyoak read: “Today’s complaint against Pepsi is wholly deficient, not only because the pleadings fail to state a claim, but because the majority rushed the case out the door before it had evidence to support the allegations. I am astounded that the majority has such little regard for our staff that it is willing to send them to court like a lamb to the slaughter. And if by some chance the complaint survives a motion to dismiss, the gaping holes in the supporting evidence will quickly become manifest.”
The commission also took action against Southern Glazer’s, a distributor of wine and spirits in December 2024.
