A recent consumer advocacy report resurfaced an interesting Pepsi FTC case from 2025…
We tend to think of price competition as something that happens at the shelf. Food Lion puts Pepsi on sale – Walmart responds, someone, maybe Kroger, follows. Shoppers compare the circulars or apps and decide where to spend their money.
But an unsealed Federal Trade Commission complaint against PepsiCo offers a considerably more complicated – and frankly more troubling – look at what can happen behind the scenes.
The FTC sued Pepsi in January 2025, alleging the company violated the Robinson-Patman Act by providing one enormous customer with pricing and promotional advantages that weren’t available on comparable terms to competing retailers. That favored retailer was subsequently revealed to be Walmart. Pepsi denied wrongdoing, and the case was ultimately dismissed without prejudice after the Trump administration entered office, so none of the allegations were adjudicated.
Still, what investigators alleged is worth our attention.
Protecting Walmart’s Price Advantage
According to the FTC, Pepsi provided Walmart with promotional payments, allowances and other services that weren’t made available to competing retailers on proportionally equal terms. The agency alleged that those advantages helped Walmart maintain lower retail prices while competitors faced less favorable economics.
Enter the Ahold Delhaize banner, Food Lion, which allegedly found itself on the other end of the story.
The Institute for Local Self-Reliance’s new report on grocery consolidation highlights allegations that Pepsi monitored retail prices around the country and acted when other retailers threatened Walmart’s advantage. Food Lion was reportedly labeled the “worst offender” for pricing Pepsi products below Walmart.
Pepsi then allegedly developed a multiyear strategy aimed at restoring Walmart’s advantage, including raising Food Lion’s costs faster than the rest of the market and reducing promotional support.
Think about what that means from the retailer’s side of the desk.
Food Lion wasn’t accused of colluding, cheating or doing anything wrong at all. It was doing precisely what we’d expect a supermarket operator to do: competing on price.
Yet according to the FTC’s allegations, successfully beating Walmart’s price could trigger a response not just from Walmart, but from the manufacturer supplying both companies.
That’s a very different kind of price war.
The Shelf Price Isn’t the Whole Story
The nowadays seldom-enforced Robinson-Patman Act sounds like the sort of dusty antitrust statute only a lawyer could love. The Food Lion example explains why grocery executives should care about it.
Two retailers can ostensibly buy the same case of product from the same manufacturer while operating with very different underlying economics. Invoice prices are only part of it. Promotional allowances, advertising support, services and other supplier terms can determine how low a retailer can profitably go at the shelf.
Scale is obviously a factor – it always has and always will be. There’s nothing sinister about getting a better price because you buy a full truckload instead of a few cases, or because serving your operation genuinely costs a supplier less. Robinson-Patman itself allows discounts reflecting legitimate differences in cost.
The question is what happens when size itself becomes the “price of admission” to better economics.
ILSR argues that this has become a powerful engine of grocery consolidation. Its report notes that independent grocers have fallen from more than half of grocery market share in the early 1980s to roughly one-quarter today. Meanwhile, the four largest grocery retailers account for nearly 60% of grocery spending.
There are plenty of reasons for that shift, and it would be extremely foolish to blame all of grocery consolidation on supplier pricing. Walmart didn’t become Walmart simply because somebody gave it a better deal on Pepsi. Logistics, technology, capital, store productivity and enormous operational efficiencies loom large.
But the fact remains that better buying terms compound those advantages.
The Case Is Gone But the Issue Isn’t
The FTC dismissed its Pepsi lawsuit in May 2025. Chairman Andrew Ferguson called the previous commission’s case “legally dubious” and “politically motivated.” So it’s important not to treat the complaint as a verdict. It was by no means an adjudication.
But the larger Robinson-Patman debate hasn’t disappeared. In fact, the FTC just this month secured a settlement in a separate price-discrimination case against Southern Glazer’s Wine and Spirits, showing that the underlying issue remains very much alive.
We usually assume the retailer with the best shelf price is the retailer willing to accept the lowest margin or operate most efficiently. Sometimes that’s true. But what if one retailer simply starts the race several yards ahead?