PepsiCo sued by FTC over pricing bias in sales to retailers

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. FTC Chair Lina Khan and Commissioner Alvaro Bedoya said in a separate statement the complaint focuses on the “disproportionate promotional allowances and services that Pepsi provides” to the favored retailer, Walmart. In a dissent, Republican Commissioner Melissa Holyoak called the complaint “the worst case I have seen in my time at the commission” and accused Democrats of rushing “the case out the door before it had evidence to support the allegations.” Americans spent about $338 billion on soft drinks in 2024, according to Statista, with about half of that spent on carbonated drinks. Pepsi is tied for No. 2 with Dr. Pepper at 8.3%, after Coca-Cola, which has the largest share. The Coke brand represents about 19.2% of carbonated beverages sold in the US in 2023, Beverage Digest estimates. In addition to its signature line of soft drinks, PepsiCo also owns Mountain Dew and Rockstar Energy drinks. The lawsuit is the second Robinson-Patman Act case filed by the FTC during the Biden administration. In December, the FTC sued alcohol distributor Southern Glazer’s Wine and Spirits LLC for charging mom-and-pop grocers higher prices than large retail chains. Khan and her fellow Democrats on the commission have advocated for greater use of the law, arguing that its under-enforcement has harmed smaller retailers. Khan, who was appointed by President Joe Biden, is leaving the agency before Donald Trump is inaugurated on Jan. 20. —Bloomberg News

PepsiCo sued by FTC over pricing bias in sales to retailers

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