The U.S. Federal Trade Commission sued PepsiCo Inc. Friday under a rarely invoked 1930s law called the Robinson-Patman Act that bars price discrimination against retailers.
In the lawsuit, which was filed in federal court in Manhattan, the FTC said Pepsi violated the law by charging small retailers higher prices than they do for beverages sold to a large multinational chain store. The agency didn’t name the retailer in the complaint, but the chain is Walmart Inc., according to people familiar with the matter.
Walmart allegedly benefitted from promotional payments - compensation for advertising or other services - on PepsiCo products, the FTC said. The complaint, which isn’t immediately available, doesn’t accuse the big-box store of wrongdoing.
“PepsiCo strongly disputes the FTC’s allegations, and the partisan manner in which the suit was filed,” the company said in a statement. “We will vigorously present our case in court.”
Walmart declined to comment. FTC commissioners split along party lines in a 3-2 vote to file the suit.
“For years, Pepsi has disadvantaged retailers — ranging from large grocery chains to independent, local convenience stores — that compete with one of its largest big box customers by consistently giving that favored large, big box retailer customer key benefits and advantages, such as promotional payments, while denying those same benefits to its competitors,” the FTC said in a statement.
PepsiCo also “provides this favored retailer with various advertising and promotional tools, known as services and facilities,” the FTC said.