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Democrats have placed renewed pressure on U.S. multinational food and drink giant PepsiCo to explain its pricing strategy amid ongoing concerns about the rate of inflation in the first months of Donald Trump’s presidency.
The New York-based corporation was sued by the U.S. Federal Trade Commission (FTC) on January 17 this year, the final trading day of Joe Biden’s tenure in the White House. The commission accused the corporation of “rigging soft drink competition” by allegedly giving an unnamed big-box retailer a more favorable pricing deal than its rivals.
Now, Senators Elizabeth Warren of Massachusetts, Cory Booker of New Jersey, and New York Representative Jerry Nadler have written to the company demanding an explanation regarding alleged disparities in the prices it charges bigger chains versus smaller retailers. They have given PepsiCo a May 25 deadline to respond.
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Bottles of Pepsi displayed at a grocery store in New York (AP)
“Pepsi’s actions may have harmed local mom-and-pop stores’ ability to compete against big-box grocery chains, leading to higher prices and fewer options for consumers,” the trio writes in their letter, according to a copy seen by NBC News.
The Independent has contacted PepsiCo for comment.
Warren, Booker, and Nadler’s action revives their party’s concern that price-gouging is the root cause of inflation. They see corporate greed and anti-competitive practices as a key reason consumers face high prices. At the same time, Republicans regard the problem as macroeconomic, preferring to go after foreign trading partners rather than domestic businesses.
The Biden-era FTC’s late lawsuit against PepsiCo was attacked at the time by Andrew Ferguson, its then commissioner and now chairman, who said he saw it as a “cynical attempt to tie the hands of the incoming Trump administration,” “partisan politics, pure and simple” and based on “little more than a hunch.”
“It is the single most brazen assertion of raw political power I have witnessed during my time as a commissioner,” Ferguson added.
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Massachusetts Senator Elizabeth Warren is leading the charge against Trump (AP)
PepsiCo likewise argued the lawsuit was “partisan.” In a January statement, it said its “practices are in line with industry norms, and we do not favor certain customers by offering discounts or promotional support to some customers and not others.”
Like many other businesses, the multinational—which counts Frito-Lay, Tropicana, Quaker Oats, and Gatorade among its well-known brands—recently warned that President Trump’s trade war was likely to cause turbulence that threatened to impact its profits after reporting first-quarter slides of 1 percent and 3 percent, respectively, for its food and beverage volumes in North America.
“Consumers have remained value‐conscious across brands and channels as the cumulative impacts of inflationary pressures have strained budgets and altered food shopping patterns,” executives told investors in late April, warning that further volatility was likely to force it to raise its costs.
