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Diving overview:
- PepsiCo was sued Friday by the Federal Trade Commission, accusing it of giving large box retailers an “unfair pricing advantage.” This is a practice that forces other retailers’ consumers to pay more for their soft drinks. The agency did not name the retailer..
- The FTC alleges that PepsiCo, ranging from large grocery chains to independent local convenience stores, benefited the large retailers in question by providing key benefits and advantages, such as promotional payments, to disadvantaged competing retailers. This resulted in higher prices for U.S. consumers, the FTC said.
- PepsiCo said the company’s practices are normal for the industry and that it does not favor certain customers by giving discounts or promotional support that it does not offer to others. “PepsiCo strongly disputes the FTC’s claims and the partisan manner in which the lawsuit was filed. We will aggressively present our case in court,” the soda giant said in a statement to Food Dive.
Dive Insights:
PepsiCo wasted little time defending itself against the FTC’s claims, pointing out that the agency was wrong on both fact and law.
The beverage giant pointed out that the lawsuit represents an “unprecedented expansion of its business.” Robinson-Patman The bill “reflects the FTC’s fundamental misunderstanding of the omnichannel retail market and the important role consumer goods suppliers play in providing lower prices and value to consumers.”
that Robinson-Patman A law was passed in 1936 requiring sellers to treat all competing customers equally, regardless of size.
The five-member FTC voted 3 to 2 in favor of the lawsuit against PepsiCo. Both Republican committee members voted against it. The lawsuit was filed in the U.S. District Court for the Southern District of New York.
“When companies like Pepsi give large retailers an advantage, they tilt the playing field against smaller companies and ultimately inflate prices for American consumers,” FTC Chair Lina M. Khan said in a statement. “The FTC’s actions will help ensure that grocery stores and other businesses of all sizes have a level playing field and compete based on skill, efficiency and talent.”
The FTC said the lawsuit represents the agency’s latest enforcement effort. Robinson-Patman Take action after suing America’s largest wine and spirits distributor, Southern Glazer’s, In December. The agency alleged that since 2018, alcohol distributors have been offering bulk discounts and rebates to large national and regional retail chains while withholding access to similar products to smaller, independent businesses.
Before filing the lawsuit against Southern Glazer’s, the government had not filed a lawsuit alleging violations of the Robinson-Patman Act in more than 20 years, according to the law firm Vinson & Elkins.
