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The Federal Trade Commission is suing PepsiCo, alleging that the company engaged in illegal price discrimination by providing unfair benefits to Walmart.
The FTC’s complaint alleges that Pepsi violated the Robinson-Patman Act, which prohibits price discrimination but is rarely invoked, by providing retailers with “promotional payments and benefits” not available to others. Alleges that there was a violation.
The FTC did not name the retailer, but the chain was Walmart, sources said.
The agency also alleges that the beverage and snack company provided its favored retailers with “a variety of advertising and promotional tools” not available to its competitors.
“When companies like Pepsi give big retailers an advantage, they tilt the playing field against small businesses and ultimately drive down prices for American consumers,” FTC Chair Lina Khan said in a statement. It will be lifted,” he said.
The world’s largest retailer is known for a strategy it calls “everyday low prices,” which consistently beat the prices of most competitors. According to market research firm Numerator, the company leads the U.S. grocery industry with a 21% share of sales. Walmart accounted for 14% of Pepsi’s net revenue in 2023.
FTC commissioners were split 3-2 along party lines in voting to file the lawsuit.
This is the latest in a number of enforcement actions taken by regulators in the days before Donald Trump takes office as president on Monday.
Republican Commissioner Melissa Holyoke called the case “the worst incident” she had experienced during her time at the agency, arguing that “the majority rushed the case before they had evidence to support their allegations.”
“PepsiCo strongly disputes the FTC’s allegations and the partisan manner in which the case was filed. We intend to vigorously litigate our case in court,” PepsiCo said in a statement. “We do not favor certain customers by offering discounts or promotional support to some customers and not others.”
In December, the FTC announced that Southern Glazer’s Wine & Spirits Inc., the first Robinson chain in decades, to charge small grocers and liquor stores with higher prices than major retailers. The Patman lawsuit was filed.
Khan has focused on price fraud, cracking down on anti-competitive practices that lead to price distortions. Although his term has already expired, he has not announced his resignation, but is expected to do so. President Trump nominated his own FTC chairman.
Walmart did not respond to a request for comment.
Additional reporting by Gregory Meyer
