The Federal Trade Commission is suing PepsiCo, accusing it of unlawful price discrimination by giving Walmart an unfair advantage.
The FTC lawsuit alleges that PepsiCo violated the Robinson-Patman Act, which prohibits price discrimination but is rarely invoked, by providing retailers with "promotional payments and perks" not available to others.
The FTC did not name the retailer, but the chain was Walmart, according to people familiar with the matter.
The agency also alleges that the beverage and snack company provides popular retailers with "a variety of advertising and promotional tools" not available to its competitors.
"When companies like PepsiCo give large retailers an advantage, it tilts the playing field in favor of small businesses and ultimately drives up U.S. consumption," FTC Chairwoman Lina Khan said in a statement. price.”
The world's largest retailer is known for its so-called "everyday low prices" strategy, which consistently beats most competitors. The company leads the U.S. in grocery with a 21% sales share, according to market research firm Numerator. In 2023, Walmart accounted for 14% of PepsiCo's net revenue.
FTC commissioners voted 3-2 along party lines to file the lawsuit.
It is the latest in a series of enforcement actions by regulators in the days before Donald Trump is sworn in as president on Monday.
Republican Commissioner Melissa Holyoke called the lawsuit the "worst case" she has seen during her time at the agency and claimed that "most people rush to dismiss cases before there is evidence to support the accusations." .
"PepsiCo strongly disputes the FTC's allegations and the partisan manner in which the lawsuit was brought. We will vigorously present our case in court," PepsiCo said in a statement. "We do not favor certain customers by providing discounts or promotional support to some customers but not others."
In December, the FTC filed its first Robinson-Patman lawsuit in decades, accusing liquor distributor Southern Glazer's Wine and Spirits of forcing small grocers and liquor stores to pay higher prices than large retailers.
Khan focused on pricing irregularities and cracked down on anti-competitive practices that lead to price distortions. Although her term has expired, she has not yet announced her departure but is expected to step down. Trump nominated his own FTC chairman.
Walmart did not respond to a request for comment.
Additional reporting by Gregory Meyer