Pepsi Faces Merchant Class Action Over Alleged Price Discrimination

PepsiCo has been hit with a significant class-action lawsuit in federal court, accused by merchants of illegally favouring large retailers, specifically Walmart, while placing smaller competitors at a disadvantage. The suit, filed in the Southern District of New York by the operator of an Italian restaurant, claims Pepsi violated the Robinson-Patman Act, a rarely enforced antitrust law from 1936 that prohibits sellers from engaging in pricing practices that discriminate between competing buyers of similar products.

According to the complaint, Pepsi allegedly gave Walmart better discounts and allowances on soft drinks than it offered to smaller businesses. The plaintiff argues these preferential deals created an uneven playing field, forcing other retailers to pay inflated prices. “Pepsi places an unfair and oppressive burden on other stores and retailers who are not provided the same advantages as the retail giant,” the lawsuit states. Walmart is not named as a defendant in the case but is central to the allegations.

This isn’t Pepsi’s first entanglement with allegations of price discrimination. Earlier this year, the Federal Trade Commission (FTC) attempted to sue PepsiCo over similar accusations but later dropped the case, deeming it politically motivated and lacking in merit. However, the new private lawsuit re-invokes the Robinson-Patman Act and seeks monetary damages on behalf of a nationwide class of Pepsi purchasers, which could number in the thousands.

The legal action underscores renewed interest in old antitrust statutes as smaller businesses fight to curb the negotiating power of retail giants. Pepsi and Walmart have not yet commented on the lawsuit.