
The Federal Trade Commission (FTC) said Friday it is suing PepsiCo, alleging the company engaged in illegal price discrimination by providing a large, big-box retailer with unfair pricing advantages, while raising prices for competing retailers, including convenience stores.
The FTC did not identify the retailer, but according to a Reuters report, a source familiar with the matter confirmed the retailer was Walmart.
The FTC in its complaint alleges that Purchase, New York-based PepsiCo has disadvantaged retailers—ranging from large grocery chains to independent, local convenience stores—who compete with one of its largest big-box customers by consistently giving that favored retailer customer key benefits and advantages, such as promotional payments, while denying those same benefits to its competitors.
“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,” said FTC Chair Lina Khan. “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.”
Pepsi’s illegal conduct violates the Robinson-Patman Act (RPA), the FTC’s complaint alleges. Under the RPA, the FTC said sellers are prohibited from engaging in price discrimination by using advertising and promotional allowances—which are financial incentives given to retailers by manufacturers to promote a product or brand—to favor large customers over small businesses.
“The lawsuit filed by the FTC is wrong on the facts and the law,” the company said in a statement late Friday to CSP. “This unprecedented expansion of the RPA reflects the FTC’s fundamental misunderstanding of the omnichannel retail marketplace and the important role that consumer product suppliers play in providing lower prices and value to consumers.”
The company said that this was one of roughly 30 matters voted on in the weeks and days before the change in the administration.
“PepsiCo strongly disputes the FTC’s allegations, and the partisan manner in which the suit was filed. We will vigorously present our case in court,” the company said.
The FTC said a “substantial portion of the law violations alleged by the FTC are redacted in the complaint due to the legal protections afforded to both Pepsi and their preferred customer—the large, big-box retailer.”
The FTC said its staff will “swiftly seek to lift the redactions in order to show the ways in which Pepsi violated the RPA on behalf their preferred customer and how those violations raised prices for Pepsi products for competing retailers.”
In December 2024, the FTC sued Southern Glazer’s, alleging illegal price discrimination. The FTC says the Miramar, Florida-based company harmed “small, independent businesses by depriving them of access to discounts and rebates, and impeding their ability to compete against large national and regional chains. This loss of competition ultimately harms consumers on choice and price.”
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