Dive Brief:

• PepsiCo and Walmart are facing a class action lawsuit from consumers claiming they overpaid for soft drinks at non-Walmart retailers due to an alleged price-fixing scheme that led to higher costs at other grocery stores.  
• The class-action complaint follows the Federal Trade Commission unsealing a government lawsuit against PepsiCo that claimed it unfairly gave Walmart pricing advantages. That complaint, brought during the Biden administration, was dismissed earlier this year.
• PepsiCo told Food Dive in a statement it disputes the allegations and intends "to defend ourselves vigorously in court," though otherwise declined to comment further on pending litigation. A Walmart spokesperson said the company was committed to negotiation on behalf of its customers “so we can deliver value and everyday low prices.”

Dive Insight:

While Walmart and PepsiCo are no longer under FTC scrutiny after the Trump administration dropped an investigation into the companies, they aren’t out of hot water yet.

The proposed class action was brought by a group of customers who say they unfairly had to pay more for Pepsi products at retailers that didn't receive the same preferential pricing as Walmart. The lawsuit, filed Dec. 15 in the U.S. District Court for the Southern District of New York, seeks a jury trial and monetary damages.

Both companies are being accused of weaponizing their dominant share in the soda and grocery markets to financially reward themselves “to the detriment of consumers and benefit from suppressed competition.”

The lawsuit uses the recently unsealed claims by the FTC to paint a picture of the alleged price fixing scheme.

Walmart is Pepsi’s largest customer, and the lawsuit references how Pepsi has disclosed it would suffer a “material adverse effect” if it lost the retailer's business. The FTC complaint alleges that since 2015, the firms had an agreement for a “price gap” allowing Pepsi to keep its largest customer in exchange for allowing Walmart to heavily advertise its low prices on the soft drinks, per the complaint.

Attorneys for the plaintiffs claim Pepsi sold its soft drink to Walmart at preferential pricing, which made consumers pay higher-than-competitive prices for the products at other stores. For example, a dozen 12-ounce cans at Walmart was priced at $8.27, while it was priced at $8.39 at Target and $8.99 at Wegmans, according to the complaint.

The soda company is also accused in the FTC complaint of providing promotional payments, allowances and other services to Walmart that it doesn’t provide other retailers.

In its statement, a PepsiCo spokesperson said the lawsuit “leverages the inaccuracies and unsubstantiated allegations in the dismissed FTC Complaint, including mischaracterizations of our business dealings with customers.”