Government Sues Pepsi Because of What They Did With Walmart

Uncle Sam is always watching, even if you’re a major brand like Pepsi or Walmart.

The Federal Trade Commission, or what we will call FTC from here on, has filed a major lawsuit against Pepsi for colluding with Walmart to keep prices lower at Walmart stores than any other stores.

According to Reuters, what Pepsi did fed high consumer prices by placing other retailers at a disadvantage. This included large grocery chains to independent convenience stores.

Basically, the FTC is accusing Pepsi of giving Walmart a discount when purchasing their products in bulk to resale, but not offering the same discount to smaller retailers at the same time.

Pepsi has made a statement saying that they do not agree with the accusations, whereas Walmart is basically ignoring what is happening and has refused to comment, according to Reuters.

The lawsuit was filed on Friday (Jan. 17) in New York state, accusing Pepsi of violating the Robinson-Patman Act.

Per the FTC, the Robinson-Patman act is price discrimination that may give favored customers an unfair advantage in the market that has nothing to do with their superior efficiency.

To break it down, let’s say that you own a mom and pop gas station, and it’s time to re-up on your Pepsi stash. A pallet of cases of Pepsi might cost you $500 to buy, but that same pallet might go to Walmart for $400 — thus making it tough for smaller companies to financially benefit from the sale of Pepsi in their stores.

Meanwhile the larger company, Walmart, keeps making more money and their stronghold on soft drink sales.