Pepsi And Walmart Accused Of Fixing Prices To Keep Pepsi Costlier Everywhere Else

Case Overview: A proposed class action lawsuit accuses Pepsi and Walmart of conspiring to inflate Pepsi prices across the U.S. while keeping Walmart’s costs low.

Consumers Affected: Shoppers who bought Pepsi products since 2015.

Court: U.S. District Court for the Southern District of New York, White Plains Division

Pepsi and Walmart are running a coordinated price-fixing scheme that allegedly raised the price of Pepsi products nationwide at every retailer except Walmart, according to a new lawsuit. 

The complaint claims the two corporate giants used their market power to suppress competition, inflate wholesale prices for rival retailers, and force consumers outside Walmart to pay more for the same drinks.

Pepsi sold its products to Walmart at preferential prices, the lawsuit claims, while charging higher wholesale rates to other grocery chains, drugstores, and convenience stores. 

That strategy allegedly ensured Walmart could undercut competitors on Pepsi prices, while consumers shopping elsewhere were left footing the bill.

Pepsi And Walmart Allegedly Coordinated To Control Prices

A group of Pepsi drinkers describe in the lawsuit a “vertical price-fixing” arrangement between Pepsi and Walmart that dates back more than a decade. Pepsi, one of the largest beverage companies in the country, is accused of closely monitoring Walmart’s retail prices and taking steps to protect its price advantage.

Those steps allegedly included offering Walmart special promotional payments and discounts, while simultaneously cutting promotions or raising wholesale prices for competing retailers. When other stores tried to sell Pepsi for less than Walmart, the complaint says Pepsi penalized them by removing discounts or increasing costs.

The result, plaintiffs argue, was a locked-in “price gap” that prevented meaningful competition. Walmart benefited from consistently lower Pepsi prices, while Pepsi maintained dominance and higher profits across the rest of the market.

Preferential Pricing Allegedly Cemented Walmart’s Advantage

Martin Gelbspan, Aaron Hinds and Alexander Govea filed the proposed class action lawsuit, saying they regularly bought Pepsi products from retailers other than Walmart and were left paying more than they should have as a result.

Gelbspan says he purchased Pepsi products in California. Hinds bought Pepsi while living in Florida, Massachusetts, New York, and New Jersey, and Govea made similar purchases while living in California, New York, and Virginia. All three say they weren’t shopping at Walmart, and because of that they overpaid for Pepsi because of the alleged scheme.

The lawsuit claims the alleged conduct was concealed from consumers, preventing them from discovering the price-fixing earlier, even though it was continuously enforced through pricing adjustments and retailer monitoring.

Why Market Power Matters 

Pepsi’s lawsuit outlines the massive scale of both companies. Pepsi reported more than $27.6 billion in beverage revenue in 2023 alone, while Walmart operates more than 4,600 U.S. stores and hundreds of Sam’s Club locations.

Because Pepsi products are sold by nearly every major grocery chain, and because Walmart is Pepsi’s largest customer, the shoppers argue the arrangement distorted the entire retail market. Consumers who did not shop at Walmart allegedly had no realistic alternative to avoid paying inflated prices for popular brands like Pepsi, Mountain Dew, Gatorade, Bubly, and Aquafina.

Antitrust Scrutiny Widens Across Consumer Goods Market

The Pepsi-Walmart case is part of a broader wave of antitrust litigation against companies that are allegedly illegally raising prices for consumers. Other lawsuits have accused electronics manufacturers like LG, Panasonic, Philips, and Samsung of conspiring to inflate prices on cathode-ray tubes. 

Other cases have targeted pharmacy benefit managers, potato processors, tire manufacturers, and even major archery brands and retailers for allegedly keeping prices artificially high.

In the lawsuit against Pepsi and Walmart, plaintiffs want to represent consumers nationwide who purchased Pepsi products from retailers other than Walmart starting January 1, 2015. 

They are suing under federal and state antitrust laws and alleging the companies enriched themselves at the expense of consumers, and are asking the court to stop the alleged pricing practices, force the companies to give up profits gained through the scheme, and compensate consumers for what they say were inflated prices paid at checkout.

Case Details

• Lawsuit: Gelbspan, et al. v. Pepsico Inc. and Walmart Inc.
• Case Number: 7:25-cv-10397
• Court: U.S. District Court for the Southern District of New York, White Plains Division 

Plaintiffs' Attorneys

• Blake Hunter Yagman (Schonbrun Seplow Harris Hoffman & Zeldes, LLP)

Have you noticed Pepsi costs more depending on where you shop? Let us know in the comments section below!