On Friday, a nonprofit forced the Trump administration to unseal a damning complaint lodged by the Biden-era Federal Trade Commission against Pepsi for colluding with Walmart to raise food prices across the nation. New un-redacted information claims FTC Chair Ferguson and his colleague Mark Meador (both Trump appointees) were hiding the mechanics of Pepsi’s and Wal-Mart’s price fixing.
Pepsi is a “must-have” product for grocery stores, and Walmart is also massively powerful,” reports BIG Newsletter writer Matt Stoller. Critics say Pepsi allegedly engages in price discrimination to maintain the approval of Walmart, its biggest buyer — even going so far as to police prices at smaller rival stores. And it prepares reports for Walmart showing them their pricing advantages on Pepsi products.
When the “price gap” between Wal-Mart and its tiny rivals narrow too much, Pepsi tracks where consumers were buying Pepsi products outside of Walmart. It keeps logs on stores who would “self-fund” Pepsi product discounts, nicknaming them “offenders” and then raise their stock price, forcing them to carry those costs down to their customers.
“This dynamic is why independent grocery stores are dying,” said Stoller. “… It’s led to less competition, fewer local grocery stores, and higher prices. … To the end consumer, it creates an optimal illusion. Walmart appears to be a low-cost retailer, but that’s because it induces its suppliers to push prices up at rivals.”
Much of this information was redacted by Trump officials, however, including Ferguson and Meador. Normally, when the government files an antitrust case, the complaint gets redacted to protect confidential business information. Then the corporate defendant and the government haggle over what is genuinely confidential business information and complaints are eventually unsealed with some minor blacked out phrases, and the case goes on.
“In this case, however, … Ferguson abruptly dropped the case in February after Pepsi hired well-connected lobbyists,” said Stoller. “… Ferguson ended it the day before the government was supposed to go before the judge to manage the unsealing process. And that kept the complaint redacted. With the complaint kept secret, Ferguson, and … Meador, then publicly went on the attack.”
Ferguson released a “bitter and personal” statement against Biden-era FTC Chair Lina Khan — who had brought the complaint against Pepsi — implying that she was lawless and partisan, that there was “no evidence” to support key contentions, and that Ferguson had to “clean up the Biden-Harris FTC’s mess.” Fellow commissioner Mark Meador later echoed his comments on on X.
“And that was where it was supposed to stay, secret, with mean-spirited name-calling and invective camouflaging the real secret Ferguson was trying to conceal,” said Stoller. “That secret is something we all know, but this complaint helped prove that the center of the affordability crisis in food is market power. If that got out, then Ferguson would have to litigate this case or risk deep embarrassment. So, the strategy was to handwave about that mean Lina Khan to lobbyists, while keeping the evidence secret.”
But anti-monopoly group The Institute for Local Self-Reliance filed to make the full complaint public, and Judge Jesse Matthew Furman agreed to hear ILSR’s case, with the U.S. Chamber of Commerce and Pepsi bitterly opposed.
“Last week, Furman directed the FTC unseal the complaint. So we finally got to see what Ferguson and Meador were trying to hide,” Stoller said.
Read the full BIG report at this link.