PepsiCo Faces Lawsuit Alleging Preferential Pricing For Walmart

PepsiCo (PEP) has been alleged to have anticompetitive, unfair and deceptive business practices associated with the manufacture, marketing, and sale of its soft drinks, according to a lawsuit filed by a merchant in the U.S. District Court of New York.

The class action against PepsiCo noted that the soda and snacks giant has provided retail behemoth Walmart (WMT) “with unfair price advantages to the disadvantage of other retailers.”

“These advantages include promotional payments, allowances, and services to Walmart that are not available to other retailers on proportionally equal terms,” according to a lawsuit filed on Tuesday by an Italian restaurant owner.

Retail sentiment on PepsiCo remained unchanged in the ‘bearish’ territory, with chatter at ‘low’ levels, according to data from Stocktwits.

The restaurant owner in the lawsuit noted that because of PepsiCo’s unfair promotions and price discrimination resulting in artificially inflated prices, Walmart can charge lower prices for the products, causing the others to lose significant business.

The class action further alleged that this has created an artificial competitive advantage for Walmart exclusively and leads to violating the Robinson-Patman Act as well as Massachusetts state law.

Shares of PepsiCo were up 1.2% during midday trading and have fallen over 7% so far this year.

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