Purchase-headquartered PepsiCo (NASDAQ:PEP) and its perennial rival The Coca-Cola Co. (NYSE:KO) are being investigated by the U.S. Federal Trade Commission (FTC) over potential pricing discrimination for their soft drinks.
According to a Politico report sourced from “four people with knowledge of the probe,” the companies ran afoul of the Robinson-Patman Act of 1936, which is designed to prevent suppliers from offering better prices to large retailers at the expense of their smaller competitors. The FTC reportedly sought input from major retailers, most notably Walmart (NYSE:WMT), to determine how they purchase and price soft drinks.
Politico noted the Robinson-Patman Act was enforced by the FTC for decades before being mostly ignored over the last two decades ”“ the last probe tied to that law was a 1988 investigation involving book publishers including Simon & Schuster and Random House.
The investigation is in the early stages and the FTC is not targeting the retailers who do business with PepsiCo and Coca-Cola.
