Editor’s Note: This article has been updated to reflect the latest litigation and for clarification.
Plenty of grocery price wars are fought in plain sight. Walmart cuts a price… Kroger responds… Aldi announces another round of reductions… It’s the nature of the business; retailers watch one another closely, and shoppers see and, often enough, benefit from the results on the shelf.
But current litigation involving PepsiCo and Walmart suggests some of the most consequential pricing battles happen much farther upstream, away from plain view.
And this story is no longer limited to a Federal Trade Commission case that was dismissed last year.
PepsiCo and Walmart are now facing consolidated private antitrust litigation alleging that the companies participated in a long-running arrangement designed to protect Walmart’s price advantage on Pepsi beverages. The cases include claims from consumers who bought Pepsi products at Walmart, consumers who bought them elsewhere and retailers that purchased Pepsi products directly.
To be perfectly clear, those allegations have not been proven. For its part, PepsiCo has maintained that it complies with applicable laws and provides customers with fair, competitive and nondiscriminatory pricing and promotional value. Walmart has said it negotiates aggressively on behalf of customers to deliver low prices.
But for the grocery industry, the allegations themselves deserve attention because they raise a much bigger issue about how supplier pricing and retailer leverage can shape competition at the shelf.
The FTC Case Didn’t End the Story
The origins of the dispute go back to the FTC’s January 2025 lawsuit against PepsiCo – proceedings that give us an extraordinary, wide-open window into how grocery prices can be set.
The commission alleged Pepsi violated the Robinson-Patman Act by giving a large customer preferential promotional payments and other advantages while denying comparable benefits to competing retailers. That customer was subsequently revealed to be Walmart.
The FTC alleged that Pepsi used promotional allowances, wholesale pricing and other tools to preserve a price gap between Walmart and competing retailers.
The case never reached trial.
In May 2025, the newly constituted Trump Administration’s FTC dismissed it without prejudice. Chairman Andrew Ferguson characterized the case as legally dubious and criticized Biden’s commission for authorizing it days before the change in presidential administrations.
Ordinarily, that might have been the end of the story. Of course, in this case it wasn’t.
Private lawsuits followed, including an August 2025 case brought by a Massachusetts restaurant operator alleging Pepsi gave Walmart promotional payments and allowances unavailable to competing retailers. That plaintiff alleged his own wholesale cost for some two-liter Pepsi products exceeded Walmart’s retail price.
By December 2025, consumers were suing PepsiCo and Walmart together, alleging violations of federal and state antitrust laws and claiming the companies had effectively coordinated to suppress price competition.
The litigation kept expanding. In February 2026, U.S. District Judge Cathy Seibel consolidated 10 related cases for pretrial purposes. An 11th was added in March.
The litigation now encompasses three distinct theories of alleged harm: consumers purchasing Pepsi beverages at Walmart, competing retailers purchasing Pepsi directly and consumers purchasing Pepsi products from retailers other than Walmart.
What the Allegations Say Happened
For the trade, the most compelling aspect of the case isn’t that Walmart allegedly received better terms; large customers routinely negotiate aggressively with suppliers, and, of course, differences in pricing aren’t automatically illegal.
What makes these allegations unusual is the claim that Pepsi didn’t merely lower Walmart’s costs. Plaintiffs allege Pepsi also worked to preserve Walmart’s retail price advantage by influencing the economics facing Walmart’s competitors.
According to the FTC complaint and subsequent private litigation, the alleged strategy included promotional payments and allowances for Walmart, reduced promotional support for competing retailers and, in some instances, higher wholesale costs for those retailers.
The Biden-era FTC complaint also described internal efforts to monitor retail pricing.
Food Lion, a banner of Ahold Delhaize, is perhaps the most striking example. The FTC alleged that Pepsi viewed the retailer as a “problem” when it priced Pepsi products too aggressively relative to Walmart and sought ways to restore Walmart’s desired price advantage.
Again, those are allegations. No U.S. court has found that Pepsi or Walmart engaged in illegal price fixing or price discrimination.
But there is an enormous difference between Walmart negotiating a better acquisition cost and a supplier allegedly managing other customers’ economics to protect Walmart’s shelf-price position.
That is where this case becomes important to the rest of the grocery business.
The Real Issue Is the Price Gap
Retailers have always understood that Walmart’s scale gives it purchasing leverage. That’s fundamental; nobody in this business needs a federal lawsuit to explain that.
But the allegations here describe something rather more complicated.
If one retailer negotiates a better price because it buys enormous volume, moves product efficiently or reduces a supplier’s costs, that’s one thing. But it’s quite another if a supplier provides advantages to that retailer while simultaneously reducing support or increasing costs elsewhere in order to maintain a predetermined retail price gap.
Under those conditions, competitors aren’t simply going up against Walmart’s purchasing power. They may be competing against a pricing structure designed to preserve Walmart’s advantage.
That’s precisely what the private plaintiffs are now asking a federal court to examine.
And the implications extend well beyond Pepsi. The litigation potentially puts a spotlight on where legal, aggressive negotiation ends and unlawful discrimination, collusion or coordination begins.
Why Grocery Retailers Should Watch This
The most consequential part of this case has little to do with soda.
If the private plaintiffs survive dismissal and reach discovery, the litigation could expose considerably more information about how one of America’s largest CPG companies managed pricing and promotions across competing retail accounts.
For regional chains and independents, that’s worth watching closely.
The original FTC lawsuit is gone, but the allegations it surfaced aren’t. They have migrated into private litigation involving consumers, merchants and Walmart itself, and they’re now being tested under several theories of antitrust harm.
That makes the Pepsi-Walmart case considerably more relevant today than it was when the FTC walked away from it.
We still don’t know whether the plaintiffs can prove their case. But the litigation has already provided an unusually detailed look at issues the grocery industry needs to grapple with.
Scale unquestionably creates legitimate efficiencies. A retailer buying enormous quantities, operating an efficient distribution system and reducing a supplier’s costs should be able to negotiate accordingly. Volume, logistics, execution – they’re all in play.
The tougher issue is determining where those efficiencies end and preferential treatment begins.
That distinction is particularly complicated in the CPG business because the invoice price tells only part of the story. Advertising funds, display allowances, rebates, promotional payments, merchandising agreements and other customer-specific programs can materially change a retailer’s effective cost. When those benefits differ substantially among competing customers, the competitive consequences can be every bit as significant as differences in wholesale price.
There is also the matter of how suppliers respond to retail price gaps. Monitoring competitors’ shelf prices is routine. Adjusting promotional support, wholesale costs or other terms specifically to preserve one customer’s advantage is a considerably different proposition. That is one of the central practices now under scrutiny in the Pepsi litigation.
Finally, the industry has to confront what increasing concentration means for these negotiations. Walmart’s purchasing power is exceptional, but the broader grocery and CPG businesses have consolidated dramatically. Large suppliers increasingly negotiate with large retailers, while regional chains and independents operate somewhere between them.
That makes transparency around pricing and promotional practices all the more important.
None of this establishes that Pepsi or Walmart broke the law. The courts will decide whether the plaintiffs’ allegations survive and whether the evidence ultimately supports them.
But the underlying issues aren’t going away regardless of what happens to these particular lawsuits.
The Pepsi-Walmart litigation puts some of grocery’s oldest tensions into unusually sharp focus: scale versus discrimination, negotiation versus coordination, and legitimate customer-specific programs versus arrangements that may distort competition.
Those are no longer abstract antitrust arguments. They are practical issues about how grocery pricing works — and where the industry draws the lines.