U.S. lawsuit accuses Pepsi company of price discrimination that favoured Walmart over smaller stores

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The Federal Trade Commission sued PepsiCo on Friday, alleging that it has engaged in illegal price discrimination by giving unfair price advantages to one big-box retailer at the expense of other vendors and consumers.

The benefiting customer wasn’t named in an FTC statement about the lawsuit. But a source familiar with the case, who asked not to be named because they were not authorized to it, said the retailer was Walmart.

A message seeking comment was left with PepsiCo by The Associated Press.

The FTC said PepsiCo’s practices included making promotional payments to Walmart but not to large grocery chains or independent convenience stores. The FTC said the activity forces many Americans to pay inflated prices for PepsiCo products unless they shop at Walmart.

“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,” FTC Chair Lina Khan said in the statement. “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.”

The FTC sued PepsiCo under the rarely enforced 1936 Robinson-Patman Act. The FTC said the act prohibits companies from using promotional incentive payments to favour large customers over smaller ones.

It was the second time in a little more than a month that the FTC has cited the Robinson-Patman Act in a lawsuit. In December, the commission sued Southern Glazer’s Wine and Spirits, a large U.S. distributor, saying it illegally discriminated against small and independent businesses by giving discounts and rebates to larger stores.