Washington: Beverage giant PepsiCo and retail heavyweight Walmart have been named as co-defendants in a new class action lawsuit filed in a federal court in New York, accusing the companies of orchestrating a long-running price-fixing arrangement that allegedly inflated the cost of Pepsi soft drinks across the United States.
The lawsuit, filed on Monday, claims that the two companies engaged in coordinated conduct for nearly a decade that distorted retail pricing by granting Walmart preferential wholesale terms while forcing competing retailers to pay higher prices for the same Pepsi products. According to the plaintiffs, this practice violated U.S. antitrust laws and ultimately harmed millions of consumers by reducing price competition.
At the heart of the case is an alleged agreement under which PepsiCo maintained a deliberate price gap favoring Walmart, the country’s largest retailer, while withholding comparable discounts, incentives, and promotional support from other retailers. The plaintiffs argue that this arrangement allowed Walmart to dominate shelf pricing while keeping overall market prices elevated.
Alleged Coordination Suppressed Competition
Court filings assert that PepsiCo and Walmart “neutralized price competition” by coordinating wholesale and retail pricing strategies, ensuring that Walmart benefited from lower costs while other retailers were left at a structural disadvantage. The lawsuit alleges that PepsiCo raised wholesale prices for non-Walmart retailers, effectively limiting their ability to compete on price and narrowing consumer choice.
“When price competition is eliminated and dominant firms coordinate pricing, they collectively increase profits at the expense of consumers,” the complaint states, arguing that the arrangement had no legitimate business justification and served primarily to entrench market power.
The plaintiffs contend that the effects of the alleged scheme rippled through the retail ecosystem, harming not only consumers but also smaller grocery chains, convenience stores, and independent retailers that lacked the bargaining power of Walmart.
Class Action Filed on Behalf of Millions of Consumers
The proposed class action seeks to represent all U.S. consumers who purchased Pepsi soft drinks from non-Walmart retailers since January 2015. The lawsuit argues that these consumers paid artificially inflated prices as a direct result of the alleged price coordination.
If the court grants class certification and the plaintiffs ultimately prevail, the case could result in significant financial penalties, including damages potentially running into hundreds of millions of dollars.
Legal experts note that the case could become a landmark test of how courts view pricing arrangements between major manufacturers and dominant retailers in an era of increasing market concentration.
Companies Deny Wrongdoing
PepsiCo has rejected the allegations, stating that it operates in compliance with all applicable laws and remains committed to offering fair, competitive, and non-discriminatory pricing to customers of all sizes and across all sales channels.
In a statement, Walmart said it is aware of the litigation and emphasized its longstanding commitment to negotiating aggressively on behalf of customers to deliver value and maintain its “everyday low price” promise.
An attorney representing the consumers declined to comment beyond the court filings.
Case Follows FTC’s Dropped Lawsuit
The consumer lawsuit follows closely on the heels of a separate regulatory case that ended earlier this year. In May, the U.S. Federal Trade Commission dropped a lawsuit against PepsiCo that had accused the company of violating the Robinson-Patman Act, a 1936 law designed to prevent discriminatory pricing practices. That case named only PepsiCo as a defendant and did not involve Walmart.
Although the FTC’s case was withdrawn, legal analysts say the new class action revives scrutiny of PepsiCo’s pricing strategies and expands the focus to include Walmart’s role in the alleged conduct.
Broader Implications for FMCG and Retail
Industry observers warn that if the lawsuit proceeds and the allegations are substantiated, it could have far-reaching consequences for pricing practices across the fast-moving consumer goods and retail sectors. Manufacturers and large retailers may face increased legal and regulatory pressure to justify preferential pricing arrangements.
The case also raises broader questions about the balance between aggressive commercial negotiations and unlawful coordination, particularly when dominant players control significant portions of the market.
As the litigation unfolds, it is expected to draw close attention from regulators, competitors, and consumer advocacy groups, potentially reshaping how pricing power is exercised in the U.S. retail economy.
