Pepsi Gave Walmart Special Discounts, Biden-Era FTC Alleged

PepsiCo Inc. offers Walmart Inc. special product promotions and discounts that it doesn’t offer to any other retailers, according to a Biden-era antitrust complaint that was unsealed by a court.

Details of a now-dismissed Federal Trade Commission complaint were made public by a judge Thursday in response to a request by an antimonopoly advocacy group, the Institute for Local Self-Reliance. The agency revealed that Walmart was the retailer that received special advantages in a filing Thursday.

The FTC in January voted 3-2 to file the lawsuit against PepsiCo, alleging the company violated the law by charging small retailers higher prices than they do for beverages sold to a large multinational chain store. The agency didn’t publicly disclose the name of the retailer in the original complaint, and the Trump FTC in May dismissed the case.

In the unsealed complaint, the FTC said PepsiCo recognizes Walmart as its “most important customer,” citing a 2023 regulatory filing where it told investors losing the company as a customer would have a “material adverse effect” on its business.

PepsiCo provides Walmart with promotional payments, allowances and services “to keep Walmart happy,” according to the complaint, “while failing to make similar benefits available to Walmart’s competitors on proportionally equal terms.”

According to the FTC complaint, that conduct disadvantages smaller retailers including convenience stores that compete with Walmart to sell Pepsi and other soft drinks, including Mountain Dew, and Rockstar Energy drinks.

Read More: FTC Nixes Antitrust Lawsuit Against PepsiCo Over Pricing

The FTC lawsuit was filed just days before Donald Trump was sworn in as president. The agency, now staffed entirely by Republicans after Trump fired its two Democrats, said in May that it was dismissing the case because it was poorly conceived.

At the time, FTC Chair Andrew Ferguson said in a statement that “the Biden-Harris FTC rushed to authorize this case just three days before President Trump’s inauguration in a nakedly political effort to commit this administration to pursuing little more than a hunch that Pepsi had violated the law.’

Walmart said in a statement that the company remains “committed to negotiating on behalf of our customers so we can deliver value and everyday low prices,” noting that the FTC voluntarily dismissed the case.

PepsiCo didn’t immediately respond to request for comment, but had denied wrongdoing when the case was filed. The FTC also didn’t immediately respond to a request for comment on the unsealed complaint.

The FTC’s complaint alleged that PepsiCo violated a rarely invoked 1930s law called the Robinson-Patman Act that bars price discrimination against retailers. Biden’s FTC Chair Lina Khan advocated for greater use of the law, arguing that its under-enforcement has harmed smaller retailers.

Earlier this week PepsiCo said it would reduce prices in its key brands as part of an agreement with activist investor Elliott Investment Management.

The case is Federal Trade Commission v PepsiCo Inc., 25-cv-664, US District Court, Southern District of New York.

--With assistance from Kristina Peterson and Jaewon Kang.

To contact the reporters on this story:
Leah Nylen in Washington at lnylen2@bloomberg.net;
Chris Dolmetsch in Federal Court in Manhattan at cdolmetsch@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Steve Stroth

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