PepsiCo sued by FTC for allegedly ‘rigging’ soft drink prices

Diving overview:

• PepsiCo was sued by the Federal Trade Commission on Friday. The company is accused of providing an “unfair pricing advantage” to major retailers and forcing consumers at other retailers to pay more for the company’s soft drinks. The agency did not reveal the name of the retailer..
• The FTC found that PepsiCo disadvantaged competing retailers, from major grocery chains to independent local convenience stores, by giving the large retailers in question significant benefits and advantages, including promotional spending. It is claimed that This resulted in higher prices for U.S. consumers, the FTC said.
• PepsiCo said its practices are normal in the industry and do not favor certain customers with discounts or promotional support not available to other customers. “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,” the soda giant said in a statement to Food Dive. .
  

Dive Insight:

PepsiCo wasted little time responding to the FTC’s allegations, pointing out that the FTC was wrong on both fact and law.

The beverage giant said the lawsuit represents “unprecedented scale.” robinson patman The law “reflects the FTC’s fundamental misunderstanding of omnichannel retail markets and the important role that consumer product suppliers play in providing low prices and value to consumers.”

of robinson patman This law was passed in 1936 Require sellers to treat all competing customers equally Regardless of size.

The five-member FTC voted 3-2 in favor of the lawsuit against PepsiCo. Both Republican committee members voted against it. The lawsuit was filed in the United States District Court for the Southern District of New York.

“When companies like Pepsi give big retailers an advantage, they tilt the playing field against small businesses and ultimately affect American consumers,” FTC Chair Lina M. Khan said in a statement. It will drive up prices.” “The FTC’s actions will help ensure that all grocers and other businesses, regardless of size, are fairly evaluated and can compete on the merits of skill, efficiency, and talent.”

The FTC said the lawsuit marks the latest enforcement action by the Federal Trade Commission. robinson patman Actions since suing America’s largest wine and spirits distributor, southern glazers, In December. Since 2018, the agency said, the alcohol retailer has provided bulk discounts and rebates to large national and regional retail chains while withholding access to similar services from smaller independent businesses. insisted.

Until the lawsuit against the Southern Glazers, the government had not filed a lawsuit alleging violations of the Robinson-Patman Act in more than 20 years. According to law firm Vinson & Elkins.