1. For at least 10 years, Pepsi has conspired with Walmart to force up grocery prices. That’s the shocking evidence made public today in an unsealed FTC lawsuit. The suit was dropped in May by @AFergusonFTC just before it was to be un-redacted. We went to court to get it unsealed & won.
2. The evidence we can now see demolishes the core argument made by opponents of the Robinson-Patman Act. They claim not enforcing the law has led to lower prices. But this new material shows the opposite: Pepsi forced all grocers besides Walmart to raise their prices.
3. Pepsi monitors prices at Walmart's competitors. If they see other grocery stores starting to match or beat Walmart on price, an alarm goes off in Pepsi and a team swings into action.
4. The examples are stunning. Here's one: Pepsi executives notice that Walmart's price gap is shrinking in its South Division. Pepsi's "Pricing Council" creates extensive plan to ensure other retailers are no longer selling Pepsi products for less than Walmart.
5. Another example involves Food Lion. Pepsi sees Food Lion as the "worst offender," because it prices Pepsi products below Walmart. So Pepsi creates a multi-year roadmap to force Food Lion to raise its prices.
6. Why does Pepsi do this? Walmart’s promise is: Keep us the king of our domain and we’ll make you the king of yours. Walmart helps Pepsi dominate the drink market in exchange for Pepsi ensuring that Walmart dominates groceries.
7. One other big reveal in the evidence is that Walmart appears to have violated the law too by pressuring Pepsi for illegal and unfair discounts.
8. I am so appalled that @AFergusonFTC dropped this case. Local independent grocery stores are being driven out of business — and their customers forced to pay higher prices — by two powerful companies who've been told, in effect, that they can violate the law with impunity.
@AFergusonFTC 9. This now-defunct case was brought by the FTC under @linamkhan with Commissioners @BedoyaUSA @RKSlaughterFTC — they deserve huge credit for this investigation and for their commitment to the law and to the fairness it proscribes.
@AFergusonFTC @linamkhan @BedoyaUSA @RKSlaughterFTC 10. There's good reason for some hope though — state AGs are starting to take a hard look price discrimination with an eye toward bring actions. And a few states, including NY, are introducing bills. Follow ILSR if you want to keep abreast! ilsr.org/independent-bu…
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