WASHINGTON, D.C. — The Federal Trade Commission (FTC) has filed a lawsuit against PepsiCo, Inc., accusing the global food and beverage giant of engaging in illegal price discrimination that unfairly favored a large big-box retailer at the expense of smaller competitors. The complaint asserts that Pepsi’s actions violated the Robinson-Patman Act, a federal law that prohibits certain types of discrimination in pricing and promotional allowances.
The FTC claims that Pepsi has provided significant advantages, such as promotional payments and advertising tools, to a preferred large retailer while systematically denying similar benefits to competing grocery chains, local convenience stores, and other businesses. Such practices, according to the complaint, have inflated prices for consumers and put smaller retailers at a competitive disadvantage.
“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 M. 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.”
Central to the case are allegations that Pepsi violated sections 2(d) and 2(e) of the Robinson-Patman Act, which prohibit price discrimination through advertising and promotional allowances that favor certain customers over others. These practices, according to the FTC, included not only inconsistent financial incentives but also unequal access to promotional tools and services designed to boost sales.
The complaint highlights that Pepsi’s conduct impacts a broad range of retailers, from large grocery chains to small family-owned stores, preventing them from competing on equal terms with the favored big-box retailer. The redacted portions of the FTC’s complaint reportedly include additional details on how Pepsi’s practices harmed competitors and consumers. The FTC has stated its intent to pursue the release of these redactions to further substantiate its case.
This lawsuit is the latest example of the FTC’s renewed focus on enforcing the Robinson-Patman Act, following its December 2024 action against Southern Glazer’s, the largest wine and spirits distributor in the country. By pursuing this case, the FTC aims to send a strong message about the consequences of anticompetitive business practices and price discrimination in consumer markets.
The case now heads to court, where the FTC will argue that Pepsi’s allegedly unlawful practices have undermined competition and raised costs for retailers and their customers.
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