US FTC sues PepsiCo over price discrimination

a close-up of Pepsi bottles
The US FTC has alleged that PepsiCo engaged in illegal price discrimination.

The US Federal Trade Commission (FTC) has alleged that PepsiCo engaged in illegal price discrimination by providing unfair pricing advantages to a big box retailer.

The retailer’s name was redacted in the filing. However, some media have reported it is Walmart, which told CNN it had no comment to make when approached about the lawsuit.

In its complaint, the FTC said Pepsi has disadvantaged retailers who compete with one of its largest big box customers by giving the latter unfair pricing advantages such as promotional payments and advertising tools.

The “unfair practices” led to inflated prices for American families, while denying competing retailers the ability to fairly compete, the agency continued, adding that the conduct violates the Robinson-Patman Act (RPA).

“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.”

The commission noted it had redacted a “substantial portion” of the alleged violations in its complaint due to legal protections afforded to Pepsi and the big box retailer. It will seek to lift the redactions to show the violations in a more detailed manner.

Earlier this month, Pepsi announced the return of its Greenhouse Accelerator (GHAC) Program in Asia Pacific.

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