The Federal Trade Commission today sued PepsiCo Inc. alleging price discrimination by providing one customer—an unnamed, large, big box retailer—with unfair pricing advantages, which resulted in higher prices for competing retailers and customers.
The suit says PepsiCo for years has disadvantaged retailers ranging from large grocery chains to independent, local convenience stores "by consistently giving that favored large, big box retailer customer key benefits and advantages, such as promotional payments, while denying those same benefits to its competitors,” the FTC’s complaint alleges. In the process, the company violated the Robinson Patman Act (RPA).
“Pepsi’s unfair practices have led to inflated prices for American families, while denying competing retailers the ability to fairly compete,” the agency said.
PepsiCo responded in email to Food Processing: “The lawsuit filed by the FTC is wrong on the facts and the law. This unprecedented expansion of the RPA reflects the FTC’s fundamental misunderstanding of the omnichannel retail marketplace and the important role that consumer product suppliers play in providing lower prices and value to consumers.”
PepsiCo included a statement from Commissioner Melissa Holyoak, who was one of the dissenters on the commission. She called the suit, “the worst case I have seen in my time at the commission,” and added there were “gaping holes in the supporting evidence.”
The FTC voted 3-2 to file for a permanent injunction and other equitable relief in the U.S. District Court for the Southern District of New York. Today’s announcement noted the two dissenting members were to issue statements – in addition to Holyoak, Andrew Ferguson dissented.
PepsiCo also noted, “This was one of roughly 30 matters voted on in the weeks and days before the change in the administration… In his statement, incoming Chair Ferguson highlighted that the ‘frantic efforts to beat the clock are a direct affront to democracy.’
“PepsiCo strongly disputes the FTC’s allegations and the partisan manner in which the suit was filed. We will vigorously present our case in court.”
About the Author
Dave Fusaro
Editor in Chief
Dave Fusaro has served as editor in chief of Food Processing magazine since 2003. Dave has 30 years experience in food & beverage industry journalism and has won several national ASBPE writing awards for his Food Processing stories. Dave has been interviewed on CNN, quoted in national newspapers and he authored a 200-page market research report on the milk industry. Formerly an award-winning newspaper reporter who specialized in business writing, he holds a BA in journalism from Marquette University. Prior to joining Food Processing, Dave was Editor-In-Chief of Dairy Foods and was Managing Editor of Prepared Foods.