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Massachusetts Restaurant Owner Takes on PepsiCo in Class Action Suit
The Chelsea businessman claims the beverage giant's exclusive deals with Walmart create an uneven playing field
A Massachusetts restaurant owner filed a class action lawsuit against PepsiCo on Tuesday, accusing the company of giving exclusive pricing and promotional benefits to Walmart while artificially inflating prices for consumers who shop elsewhere.
According to the lawsuit, Michael Giannasca, owner of Michael G's Handcrafted Italian restaurant, claims these practices force him and other retailers to charge higher prices than Walmart. For example, in Lynn, Massachusetts, a two-liter bottle of Pepsi soda was priced a dollar less at a Walmart compared to nearby Walgreens.
The lawsuit claims these pricing disparities result from PepsiCo's exclusive deals with Walmart, which include discounts, promotional support, eye-catching displays and premium shelf positions that are unavailable to other retailers.
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The suit alleges that these practices violate both state and federal consumer laws, creating a competitive advantage for Walmart at the expense of other stores. The plaintiff seeks class action certification, a declaration that the defendant violated the law, monetary damages, restitution, pre-judgment interest and attorneys' fees. A jury trial in the Southern District of New York has been requested.
In January, the Federal Trade Commission brought forth a similar lawsuit against PepsiCo. The agency argued that PepsiCo's favorable terms denied competing retailers the ability to fairly compete. The FTC's complaint was redacted, but a source familiar with the case told The Associated Press the retailer was Walmart. However, the suit faced criticism over a lack of direct evidence demonstrating harm to competition, and it was dismissed in May. Former FTC Chair Lina Khan condemned the dismissal, calling it “a gift to giant retailers as they gear up to hike prices.”
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PepsiCo, headquartered in Harrison, New York, is one of North America's largest food and beverage companies with revenue exceeding $91 billion. The company has been slipping behind in U.S. soda sales, falling behind competitor Dr Pepper in 2024.
This class action lawsuit renews scrutiny around Walmart’s ability to leverage its nation-wide dominance to secure lower prices and under-cut competitors.
Neither Walmart nor PepsiCo responded to requests for comment.
