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FTC Takes Legal Action Against PepsiCo for Price Discrimination
Cans of Pepsi were recently displayed at a Target store in Brooklyn, New York City, a day when significant news broke about the beverage giant.
The Federal Trade Commission (FTC) announced on Friday its decision to sue PepsiCo over alleged illegal price discrimination. The commission claims that the company provided one particular retailer with preferential pricing that was not extended to its competitors.
Insiders have identified Walmart as the retailer in question, despite the FTC not naming it directly.
The FTC’s lawsuit contends that PepsiCo’s actions constitute a violation of the Robinson-Patman Act, legislation designed to prohibit sellers from charging different prices to competing buyers for the same product or offering unequal promotional allowances. The commission alleges that PepsiCo granted Walmart additional support in the form of promotional payments and advertising tools unavailable to other retailers.
In response, PepsiCo has firmly rejected the allegations, stating that the FTC’s claims are both factually and legally incorrect. “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,” the company said in a statement provided to CNBC. They further emphasized that their pricing practices are consistent with industry standards, claiming no favoritism toward specific customers.
Walmart has yet to respond publicly to requests for comment regarding the lawsuit.
The lawsuit, filed in the Southern District of New York, is currently sealed, with a significant portion of its contents redacted to protect sensitive information regarding both PepsiCo and Walmart. The FTC is seeking to unseal these documents to clarify the nature of the alleged violations and to demonstrate the impact of such actions on prices charged by competing retailers.
The Robinson-Patman Act has been a contentious piece of legislation since its introduction in 1936, with enforcement having waned during the deregulation period of the 1980s. However, the FTC has renewed its focus on enforcing these provisions, as seen in its recent legal action against Southern Glazer’s, a major distributor of wine and spirits.
This lawsuit emerges at a politically significant time, coming just before President-elect Donald Trump’s inauguration. This transition will coincide with the departure of FTC Chair Lina Khan, known for her aggressive regulatory stance toward large corporations. Khan’s anticipated successor, Andrew Ferguson, is a current commissioner who has expressed disagreement with this legal action against PepsiCo.
In the waning days of the Biden administration, the government has ramped up legal challenges against various corporations and executives, including notable cases involving Capital One and Southwest Airlines.
Source
www.cnbc.com