Soda is one of the most popular soft drinks worldwide due to its sweet taste and addicting carbonation, providing the perfect mid-day pick-me-up without needing another cup of coffee.
Millions of people across the globe have made consuming soda an almost impossibly unbreakable daily habit, so if you think your soda addiction is concerning, you are not alone.
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The U.S. takes the fifth spot for most soda consumed as of 2024, with one out of every five people reporting having at least one soda daily, totaling around 154 liters per capita yearly.
Although there are millions of options to choose from, Americans have their preferred soda brands, with Coca-Cola, Dr. Pepper, and Pepsi being among the most popular in terms of generated revenue.
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PepsiCo is an American multinational food, snack, and beverage corporation and the second-largest food company in the world. It owns popular brands such as Lay’s, Gatorade, Quaker Oats, and, of course, Pepsi, to name a few.
PepsiCo faces weak demand in the U.S. and struggles with slowing sales
Although PepsiCo is one of the most lucrative food companies worldwide, whose products are consumed in over 200 countries and territories, the company was not immune to the inevitable effects of inflation, increasing competition, and ever-evolving consumer trends.
PepsiCo’s third-quarter earnings for 2024 showed that its total net revenues declined by 0.6%, the North American beverage sector had flat revenues, and earnings per share were down 5% year over year.
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The disappointing earnings results could signal a troublesome trend, as it was the second straight quarter of weaker-than-expected sales.
However, PepsiCo has just been hit with a lawsuit alleging illegal practices that might be even more troublesome than its current financial slowdowns.
The FTC files a lawsuit against Pepsi for rigging soft drink competition
On Friday, the U.S. Federal Trade Commission (FTC) filed a lawsuit in the U.S. District Court for the Southern District of New York against PepsiCo (PEP) over the rigging of soft drink competition.
The commission alleges that the company illegally offered lower product pricing to large retailers, including Walmart (WMT) , while raising prices for competing independent and local retailers and customers.
“The FTC’s action will help ensure all grocers and other businesses —no matter the size — can get a fair shake and compete on the merits of their skill, efficiency, and talent,” said FTC Chair Lina M. Khan.
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This illegal practice violates the Robinson-Patman Act (RPA) and harms American consumers. It inflates prices and diminishes fair competition among retailers.
The Robinson-Patman Act is a federal law prohibiting price discrimination by using advertising, promotional allowances, and other anti-competitive practices.
“For years, Pepsi has disadvantaged retailers — ranging from large grocery chains to independent, local convenience stores — who compete with one of its largest big box customers by consistently giving that favored large, big box retailer customer key benefits and advantages, such as promotional payments, while denying those same benefits to its competitors,” stated the FTC in the lawsuit.
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