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Secret Documents Show Pepsi and Walmart Colluded to Raise Food Prices

601 points by connor11528 10mo ago

toomuchtodo 10mo ago
Complaint: https://storage.courtlistener.com/recap/gov.uscourts.nysd.635565/gov.uscourts.nysd.635565.68.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.nysd.63...
- JKCalhoun 10mo ago
  Something like this has been going on in the restaurant world since seemingly forever. When I worked at a pizza joint (40-some years ago) we only served Pepsi drinks. I was young and dumb enough then not to know that, for example, 7-Up and Sprite were not independent soft-drinks. I assumed every flavor of soda was its own company. I soon started to notice the drink pattern based on whether they had Coke or Pepsi. Those two owned all the other flavors—and they each had their own variant of the other's. I was told too by management that we only bought Pepsi drinks. Again, native me thought, "Why not have both Coke and Pepsi and let the customer decide?" I am not sure whether there was a pricing issue that prevented management from buying both—like the loss of a discount for going Coke-only or whatever. Of course you always saw signage, etc. around the restaurant with Pepsi logos (or Coca-Cola logos at other restaurants) so you knew there were gifts in other forms that one of the two would entice the owner with. What a slow growing up I have gone through since then. It seems like the kind of thing they ought to teach in primary education.
  - Sleaker 10mo ago
    Are you referring to the fact that 7up/Dr pepper are distributed by pepsico? They still have historically been independent from the big 2 as far as product branding since inception, most recently being owned by Schweppes.
    - Telemakhos 10mo ago
      Dr. Pepper is distributed by Coke in some states/countries, Pepsi in others, and by its own distribution network in like 30 US states. A friend likened it, not without a certain verisimilitude, to the result of the Treaty of Tordesillas in 1494.
      - pixl97 10mo ago
        The Dr Pepper/Coke agreement was terminated this year. https://finance.yahoo.com/news/dr-pepper-end-partnership-coke-001511525.html https://finance.yahoo.com/news/dr-pepper-end-partnership-cok...
    - pests 10mo ago
      I think they were just giving an example, and had assumed each separate flavor was a separate company, but happened to choose a bad one with 7up as it is a different beast then the rest.
  - toast0 10mo ago
    > Again, native me thought, "Why not have both Coke and Pepsi and let the customer decide?" I am not sure whether there was a pricing issue that prevented management from buying both—like the loss of a discount for going Coke-only or whatever. There's a bunch of pricing stuff (typically the bottler sells syrup and rents dispensers and may supply drinkware, and you get discounts on everything when you buy more syrup, and you get advertising subsidies when you put the brand logo in your ad, etc), but there's also logistics. More options means a bigger soda fountain and probably more space storing syrup. I'm not sure I've ever seen mixed brands in a single dispenser (other than 7up+DrPepper which is bottled regionally by Coke bottlers in some regions and Pepsi bottlers in others; so you might see Coke with 7up and DrPepper or with Sprite and MrPibb). But, rarely, I've seen dispensers from both. Mostly at convenience stores and also the Yahoo employee cafeteria at the Sunnyvale HQ on First Ave (which they left some time ago). Some restaurants that don't have a fountain will stock cans from multiple brands, too. All that said, from my life experience, very few people express a strong preference, giving customers a choice probably isn't worth the effort.
  - quitit 10mo ago
    The deals for this type of product positioning occur quite high up in the chain. To give an example Yum! brands (KFC, Pizza Hut, Taco Bell, etc) was formed as a subsidiary of PepsiCo. Although PepsiCo has divested from Yum, their pre-existing relationship is why these restaurants only serve Pepsi's soft drinks. Deal-making is also why you see patterns like this emerge in other places such as convenience stores that only sell beverages from the Coca-cola company (i.e. higher volume sales from just one supplier yields a better discount than splitting sales across multiple suppliers). It's relatively rarer to see more than one beverage supplier at a restaurant, club or convenience outlet.
    - BobbyTables2 10mo ago
      Don’t they have explicit agreements to not sell the competing vendors’ products? Or is that just urban legend? The only restaurants I’ve ever seen selling Coke and Pepsi were in less developed countries…
      - SoftTalker 10mo ago
        There are some but it's rare. Most restaurants sell only one or the other.
    - pests 10mo ago
      > It's relatively rarer to see more than one beverage supplier at a restaurant, club or convenience outlet. Wait what? What do you mean by convenience outlet? We must have different definitions.
    - wahern 10mo ago
      For convenience stores, particularly ones with few or no built-in wall coolers, the typical deal is the Coca-Cola or Pepsi distributor will provide and maintain a free-standing cooler, but it can only hold products from that distributor (often the distributor stocks it for you). Thus you'll typically see Coca-Cola and Pepsi products segregated in different coolers, if the store sells both. I presume, but don't know first-hand, that for built-in coolers you want stocked by the distributor, they'll also require segregation. Frito-Lay distributors operate similarly--they'll come in and stock your shelf if you want (I dunno if there's a sales premium), but typically they'll require the Frito-Lay products be segregated, and they'll provide branded shelving if you want.
  - khannn 10mo ago
    And Pizza Hut ran itself into the ground despite being incredibly popular when I was a child
  - vondur 10mo ago
    Ha, the University where I work signed an exclusive agreement to only sell Pepsi products on campus. I'm sure there was some kickback money given to people here to push it through.
    - RajT88 10mo ago
      My wife's university has a totally egregious contract which is exclusive to a food provider for cafeteria food and event catering. If you want to, say, have a student group sell cookies or whatever, the provider has to approve and you have to pay to host it. The contract is for 10 years. No freaking way somebody signed off on that without money under the table.
      - diab0lic 10mo ago
        Sodexo or Aramark I assume? Unfortunately standard practice on University campuses across Canada and the USA.
        phantasmish 10mo ago
        Yeah, exact same thing when I was reluctantly involved in a club’s leadership and organizing an on-campus event with food 20+ years ago. I think it was Sodexo in our case. Must be common.
        nick__m 10mo ago
        At my institution there was a student revolt, chartwell was kicked out and it is a work co-op. The quality has increased, the employees are better treated and the cost stayed the same, and stupid rules like that are no more !
        RajT88 10mo ago
        Sodexo
      - conception 10mo ago
        It’s probably more there are only two or three companies, if that, that can service a customer that large and meet their requirements/SLAs by contract. And the three all happen to have the same sort of agreements required.
  - carlosjobim 10mo ago
    This is world wide. Coke and Pepsi not only provide restaurants with soft drinks, but also all other drinks, most importantly beer. Local beverage distributors will be with either one or the other. Restaurant owners will sign a contract with a distributor to buy only from them, and in exchange get discounts, free equipment rentals such as drink fridges and beer taps, and things like sunshades, tables and chairs, signage, etc.
    - andsoitis 10mo ago
      > Coke and Pepsi not only provide restaurants with soft drinks, but also all other drinks, most importantly beer. Neither Coke nor Pepsi brew or sell beer.
  - pjc50 10mo ago
    There's a complicated UK beer version of this with more parties. Basically pubs might be any of: - directly owned and managed by the brewery - owned by the brewery and leased to a manager, like a franchise - independent, but contracted exclusively - genuinely independent Contracted pubs may also have limited supplies of "guest ales". Usually there's sufficient local competition to keep the pubs good, but local monocultures can also be a problem.
    - carstout 10mo ago
      Most of the pubs are owned by the PubCos Back in the past it was mostly brewery owned with 6 big brewers owning most of them. So a law got passed in the 90s which limited the breweries to a max of 2k pubs. Unfortunately what happened was we ended up with a bunch of very large Pubcos who were often linked to a particular brewery anyway (some were formed by former brewery execs and the pubs were "donated" in return for an agreement to keep buying from the brewery"). The Pubcos started with low rents but high stock prices but now go for both high rents and high stocks. Its why often see pubs changing hands frequently when someone tries the dream of pub landlordship but runs out of money. Its why Wetherspoons is "cheap" since generally they convert buildings and so have a freehouse model.
  - cosmie 10mo ago
    Yea, when I worked at Dominos we were charging like $2.50 for a 20 oz coke and $3.50 for a 2 liter. Since the same 2 liter was like $1 at the grocery store, I thought we were gouging costumers and making bank on them, and figured the manager was being dramatic whenever inventory counts were off by a few. Turned out we had a really raw deal with Coke, and were only charging like 25-50¢ more than we bought from for. And we were also required to order them from the distributor, to prevent us from stocking the cooler with cheaper ones from the grocery store.
levocardia 10mo ago
Seems awfully dumb to attempt the whole "collusion on prices" thing when both you and your partner in crime are locked in your own cutthroat duopoly battles. What's to stop Coca-cola+Target from turning around and crushing Walmart+Pepsi on pricing the instant they try to "price-gouge"?
- JKCalhoun 10mo ago
  We're now to a point where we are cheering on a battle between duopolies.
  - mgiampapa 10mo ago
    RC Cola, this is your moment to shine.
  - venturecruelty 10mo ago
    How is that different from any regular election year?
- taurath 10mo ago
  It’s not cutthroat, it’s comfortable partnership with a cutthroat veneer. If either of them wins, they have a monopoly and are at higher risk of regulation or breakup. So they fight openly over small fries, and keep writing dividend checks. They write the rules.
- cowpig 10mo ago
  Monopolist economic surplus?
- darth_avocado 10mo ago
  The whole point of Duopoly is to have a “competitor” so that you can continue to act as a monopoly behind the scenes while avoiding the appearance of a monopoly. You get to point finger at the other guy when there’s scrutiny and argue there’s no monopoly, but also increase your own prices when your competitor does it.
- jazzyjackson 10mo ago
JKCalhoun 10mo ago
"A Trump official tasked with dealing with affordability tried to hide this complaint…" Why? Unless there was some kind of payola, this is doesn't make sense.
- WolfeReader 10mo ago
  Capitalism as it is taught: lots of companies competing with each other, resulting in better goods at affordable prices! The customer wins! Capitalism in practice: a relative handful of rich people cooperating with each other to extract as much money as possible from the middle and lower classes. You can see which version of capitalism this document supports. The "fiscally conservative" aspect of the Republican party (and the Democratic party to a lesser degree) don't want people to think of capitalism-in-practice; they want happy consumers who think that competition is still a thing. Since this document clearly goes against that narrative, it must be suppressed.
  - janalsncm 10mo ago
    Corporations are a funny kind of alien intelligence. Producing a better product or a lower price is just one way to ensure their survival. Another is to manipulate the rules of the market itself, including the rule enforcers.
    - OgsyedIE 10mo ago
      It's the product of an evolutionary process. You could scrap capitalism entirely and still get cartel formation, since you have agents with varied traits competing to gain the resources to be selected to reproduce [their continued existence, into the future]. A couple other ways of looking at it come from Bataille, Odum, Prigogine or Schmitt.
    - venturecruelty 10mo ago
      You can also just pay your workers in scrip and then hire Pinkertons to kill them if they get uppity about it. It's hard not to become cynical when people seem almost willfully ignorant of the despicable history of capital in this country...
GenerWork 10mo ago
>“I actually think we’re capable of taking whatever pricing we need,” said CFO Hugh Johnston in 2022. And the company did just that, raising prices by double digit percentages for seven straight quarters in 2022-2023. I hate to say it, but was he proven wrong? People are still buying junk food and soda (their primary products) despite prices going up. Looking at Pepsis profit margin, it seems to have hovered between 9.5% and 10.5% since 2021.
- janalsncm 10mo ago
  The point of the complaint is that they were able to do this due to illegal collusion. And even if people buy a lot of junk food, they might have bought competitors’ junk food. Laws are still laws even if you don’t like the people the laws protect.
  - itsdrewmiller 10mo ago
    Is that the point? The illegal collusion was with walmart to keep their prices artificially low compared to everyone else. They weren't colluding with coke to raise all soda prices.
  - naijaboiler 10mo ago
    Exactly pricing discrimination (i.e. selling at different prices to different customers) is absolutely legal and is market efficient in a market with multiple sellers and multiple buyers. Pricing discrimination combined with monopsony(single large buyer) or monopoly ( single large seller) powers is not market efficient. It leads to higher prices by end consumers. Price discrimination via collusion + Walmarts monopsony in grocery industry violates that 1930s act and is illegal
yndoendo 10mo ago
Bigger the company the more power they have to dictate the purchasing price from producers and the cost for consumers. This is not just in the food industry it is also in retail such as Amazon. Companies like Kroger are so big they dictate the purchase prices from farms. The farmers were better off in the past with multiple competitors creating a bidding war. Same with consumers, products had to be priced right to win their business. A company I work for had to give free engineering labor in millions of dollars to get access to one of the largest retailers in the USA. Too big not-to-do-business-with harms everyone except the retailer.
- autoexec 10mo ago
  > Bigger the company the more power they have to dictate the purchasing price from producers and the cost for consumers. That wasn't always true. The Robinson-Patman Act made it illegal to give preferential treatment to large retailers specifically in order to prevent what we're seeing with walmart and amazon today. The US just stopped enforcing the law (and also anti-trust laws that would have protected local/small businesses) so here we are. At any point the US could decide that enough is enough and fix the situation but we'd probably have to make it actually illegal for corporations to bribe government officials before it stands a chance of happening.
  - eftychis 10mo ago
    It used to be illegal to bribe. Used to... Make a law impossible to enforce, and you suddenly transform the act to a totally legal one, at the expense of people losing trust in the system (specifically the U.S. Supreme Court and Congress). And at some point, the system breaks.
    - gruez 10mo ago
      [flagged]
      - kevin_thibedeau 10mo ago
        Lobbying involves quid-pro-quo: You pass the bill we wrote for ourselves and we give you a cushy consulting job when you leave Congress.
agentifysh 10mo ago
Time for a class action lawsuit. You can submit your personal information to a wordpress powered law firm's upload forms in exchange for your twenty bucks without inflation compensation in about 5 years and they collect a cool 50% fee distributed amongst millionaire lawyers.
- hackthemack 10mo ago
  Something is seriously wrong with the US justice system. Some links to bolster your point. https://waldenconsultants.com/2020/04/13/yet-another-study-shows-who-really-wins-in-class-actions-the-lawyers/ https://waldenconsultants.com/2020/04/13/yet-another-study-s... https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
- xrd 10mo ago
  I wish I could do the reverse. Could I and a million other people pay $20 now to a few law firms that could fight this without need for compensation and do everything to expose this to everyone in America?
  - agentifysh 10mo ago
    hmmm that is very interesting wonder if its possible even
  - gruez 10mo ago
    Isn't that what organizations like the ACLU are for? Except ACLU fights for civil rights whereas your hypothetical organization fights for consumer rights. The reason why it doesn't exist is that it suffers heavily from the free rider problem. Any individual's donation of $20 or whatever is unlikely to get them $20 worth of returns, because the lawsuit is either funded or not. Moreover you'd benefit regardless of whether you donated or not, so there's no incentive to donate.
    - citizenkeen 10mo ago
      But isn’t that true of the ACLU as well?
theLegionWithin 10mo ago
soda isn't actually food, nor is it healthy. Pepsi should be $40 a carton
- nitwit005 10mo ago
  You should look up what PepsiCo owns.
  - lanfeust6 10mo ago
    Garbage, mostly. Aside from bottled water which is itself often redundant, there's very little they sell that could be considered "good" for people.
    - venturecruelty 10mo ago
      That makes collusion okay. QED.
      - lanfeust6 10mo ago
        No.
lanfeust6 10mo ago
[flagged]
- digital-cygnet 10mo ago
  It's not the discounting that's a problem -- it's the intentionally watching other stores and preventing them from closing the "price gap" with Walmart > As a result of Food Lion threatening Walmart’s price gap, Pepsi created a plan to nudge Food Lion’s retail prices on Pepsi products upward by reducing promotional payments and allowances to Food Lion and raising other costs for Food Lion
  - lanfeust6 10mo ago
    > It's not the discounting that's a problem -- it's the intentionally watching other stores and preventing them from closing the "price gap" with Walmart This is circular. You are just describing a selective/privileged discount, again. Food Lion could of course sell some items at a loss (Walmart did this, to gain market share and beat out smaller businesses). Costco continues to sell hot dogs at a loss. But that probably wouldn't work for Pepsi products in this context; fortunately, there are other products beyond Pepsi.
    - foolswisdom 10mo ago
      You asked how a price cut translates to raising prices everywhere, and the parent comment answered. Though even without the further raising of prices for the competitors, the effect of many such agreements is that the competitors have a harder time competing, some shut down, and now the Walmart can also charge more because there's less competition.
      - lanfeust6 10mo ago
        > the parent comment answered There's no evidence that it translates to raised prices everywhere. > competitors have a harder time competing Yes > some shut down No one is shutting down because of Pepsi. Offer some evidence.
mc32 10mo ago
[flagged]
- citizenkeen 10mo ago
  Weird stance to take since PepsiCo owns a number of food subsidiaries like QuakerOats. Pretty sure oatmeal is a nutritional foodstuff.
  - mc32 10mo ago
    Excuse me if I don't count <5% of their revenue source as making a difference.
    - deleted 10mo ago
      [deleted]
therobots927 10mo ago
Shout out to Friedman, Hayek, Rand, Reagan, and their neoliberal enablers in the democrat party like Clinton. All US Citizens and the unlucky citizens of our colonies are property of US corporations. Bought and paid for. It’s about to become really obvious to anyone paying even the smallest amount of attention just how screwed anyone not in the top 1-5% really is.
- GuinansEyebrows 10mo ago
  please, please read Dark Money by Jane Mayer if you haven't already.
  - therobots927 10mo ago
    Will add it to my list!
scentoni 10mo ago
The greatest enemy of a free market is a successful capitalist.
jimt1234 10mo ago
> A Trump official tasked with dealing with affordability tried to hide this complaint... First, that made me raise an eyebrow. > ...and failed. Then, that made me laugh. > And now there’s a political and legal storm as a result. Finally, that made me sigh, because nothing's gonna happen. The "storm" will pass, as it always does.
- codingrightnow 10mo ago
  The storm is likely within the administration and across governmental departments. Trump will try to drive out whoever doesn't toe his line, even if he legally doesn't have the authority to do so.
kotaKat 10mo ago
Oh! I've witnessed this quietly every time I buy soda! I'm a habitual enough soda drinker that I'm a six-pack-a-day diet soda drinker (don't judge me, at least it's not Red Bull). I notice that there's vendor collusion at Walmart for months at a time where the Pepsi six-packs will typically go on sale for a few months at a sub-$4 to $5 price (currently it's $4.98) while Coke packs will be $5-6 off sale. Cycle three to four months and Coke will enter the $4 position and Pepsi goes back up to a full retail price for the next quarter. I've always seen the 'cycle' of the two competitors constantly hitting a 'sale' price across various retailers.
- antonymoose 10mo ago
  Seems to be a pattern among all products I’ve ever encountered. I’m a heavy sales shopper. My local grocer (Ingles) will do a promo for Sargento cheese or Chobani yoghurt for instance, normal price of 5$ let’s say, then drop it to $2 for a week, then to $4 the next week, then back to full price. This rinses and repeats every 2 or 3 months for most sales products. Sadly for this RedBull drinker, they never go on sale, at all, ever, anywhere.
- foxyv 10mo ago
  I used to drink a lot of seltzer purchased in those 1 liter bottles. Then I bought a countertop soda maker. I can make the same amount of soda that I was paying $1.50 for at the store for $0.20 now. (I refill my own CO2 off a 10 lb tank) I can't imagine paying more than $0.50 for a liter of soda anymore. They have got to be making an obscene profit on those drinks. Even weirder, the drinks that I flavor myself taste way better than the ones in the store. I suspect they have been titrating their flavoring down over time. Root Beer I make myself using drink powder tastes way better than the ones from the store. Same for grape and orange sodas.
hasbot 10mo ago
Where are the mainstream media stories about this? The article mentioned the story blowing up but a Google search showed only one media outlet covering the story.
- deleted 10mo ago
  [deleted]
- camgunz 10mo ago
  Or like any mea culpas. I remember Larry Summers scoffing about this, as well as our very own Walter Bright.
dominicrose 10mo ago
As if we needed another reason not to buy junk food. By the way, in France we have a 5.5% VAT on food, instead of 20% for other products. Junk food is also 5.5% but cat food is 20%. I wonder if this is going to change some day for junk food or sodas.
poppafuze 10mo ago
[dead]
twoodfin 10mo ago
The Robinson-Patman Act is terrible law. It’s been routinely violated (unknowingly in most cases) for decades across effectively every sector of the economy & enforced vanishingly rarely. If it were to be enforced uniformly and aggressively it would be devastating: Every negotiation between a supplier and a purchaser at every level is potentially a federal crime! If it were to be enforced capriciously, it would put unchecked power over everyday commerce—again at every level—into the hands of the FTC and its political masters. No thanks. Repeal it so we can stop hearing about this “one neat trick to roll back neoliberalism!”
hereme888 10mo ago
The legal theory is Robinson-Patman promotional discrimination, not a price-fixing judgment. The complaint’s factual story can imply broader price effects, but that is not the same as “proven collusion” across the whole economy. The case was not dropped in February; it was extended.
codingrightnow 10mo ago
Just stop buying Pepsi products. Stop going to Walmart. You don't need either. You don't need potato chips or soda or Gatorade or any of the other poison they produce.
- whamlastxmas 10mo ago
  Okay I'll go to Kroger who also has horrible anti competitive practices and buy their store brand which is literally just Nestle but in different packaging
- foxyv 10mo ago
  Why do you think that all the other brands don't have similar deals?
- tencentshill 10mo ago
  I just look at $7 for a bag of chips (which seems to get smaller every year) and it makes the decision easy.
everdev 10mo ago
This is just the tip of the iceberg, and it's only in the grocery shopping industry. Our country and civilization is slowly turning into organized crime.
MagicMoonlight 10mo ago
Companies are enshittifying everything so quickly now that it must be via collusion.

601 points by connor11528 10mo ago

Complaint: https://storage.courtlistener.com/recap/gov.uscourts.nysd.635565/gov.uscourts.nysd.635565.68.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.nysd.63...

JKCalhoun 10mo ago
Something like this has been going on in the restaurant world since seemingly forever. When I worked at a pizza joint (40-some years ago) we only served Pepsi drinks. I was young and dumb enough then not to know that, for example, 7-Up and Sprite were not independent soft-drinks. I assumed every flavor of soda was its own company. I soon started to notice the drink pattern based on whether they had Coke or Pepsi. Those two owned all the other flavors—and they each had their own variant of the other's. I was told too by management that we only bought Pepsi drinks. Again, native me thought, "Why not have both Coke and Pepsi and let the customer decide?" I am not sure whether there was a pricing issue that prevented management from buying both—like the loss of a discount for going Coke-only or whatever. Of course you always saw signage, etc. around the restaurant with Pepsi logos (or Coca-Cola logos at other restaurants) so you knew there were gifts in other forms that one of the two would entice the owner with. What a slow growing up I have gone through since then. It seems like the kind of thing they ought to teach in primary education.
- Sleaker 10mo ago
  Are you referring to the fact that 7up/Dr pepper are distributed by pepsico? They still have historically been independent from the big 2 as far as product branding since inception, most recently being owned by Schweppes.
  - Telemakhos 10mo ago
    Dr. Pepper is distributed by Coke in some states/countries, Pepsi in others, and by its own distribution network in like 30 US states. A friend likened it, not without a certain verisimilitude, to the result of the Treaty of Tordesillas in 1494.
    - pixl97 10mo ago
      The Dr Pepper/Coke agreement was terminated this year. https://finance.yahoo.com/news/dr-pepper-end-partnership-coke-001511525.html https://finance.yahoo.com/news/dr-pepper-end-partnership-cok...
  - pests 10mo ago
    I think they were just giving an example, and had assumed each separate flavor was a separate company, but happened to choose a bad one with 7up as it is a different beast then the rest.
- toast0 10mo ago
  > Again, native me thought, "Why not have both Coke and Pepsi and let the customer decide?" I am not sure whether there was a pricing issue that prevented management from buying both—like the loss of a discount for going Coke-only or whatever. There's a bunch of pricing stuff (typically the bottler sells syrup and rents dispensers and may supply drinkware, and you get discounts on everything when you buy more syrup, and you get advertising subsidies when you put the brand logo in your ad, etc), but there's also logistics. More options means a bigger soda fountain and probably more space storing syrup. I'm not sure I've ever seen mixed brands in a single dispenser (other than 7up+DrPepper which is bottled regionally by Coke bottlers in some regions and Pepsi bottlers in others; so you might see Coke with 7up and DrPepper or with Sprite and MrPibb). But, rarely, I've seen dispensers from both. Mostly at convenience stores and also the Yahoo employee cafeteria at the Sunnyvale HQ on First Ave (which they left some time ago). Some restaurants that don't have a fountain will stock cans from multiple brands, too. All that said, from my life experience, very few people express a strong preference, giving customers a choice probably isn't worth the effort.
- quitit 10mo ago
  The deals for this type of product positioning occur quite high up in the chain. To give an example Yum! brands (KFC, Pizza Hut, Taco Bell, etc) was formed as a subsidiary of PepsiCo. Although PepsiCo has divested from Yum, their pre-existing relationship is why these restaurants only serve Pepsi's soft drinks. Deal-making is also why you see patterns like this emerge in other places such as convenience stores that only sell beverages from the Coca-cola company (i.e. higher volume sales from just one supplier yields a better discount than splitting sales across multiple suppliers). It's relatively rarer to see more than one beverage supplier at a restaurant, club or convenience outlet.
  - BobbyTables2 10mo ago
    Don’t they have explicit agreements to not sell the competing vendors’ products? Or is that just urban legend? The only restaurants I’ve ever seen selling Coke and Pepsi were in less developed countries…
    - SoftTalker 10mo ago
      There are some but it's rare. Most restaurants sell only one or the other.
  - pests 10mo ago
    > It's relatively rarer to see more than one beverage supplier at a restaurant, club or convenience outlet. Wait what? What do you mean by convenience outlet? We must have different definitions.
  - wahern 10mo ago
    For convenience stores, particularly ones with few or no built-in wall coolers, the typical deal is the Coca-Cola or Pepsi distributor will provide and maintain a free-standing cooler, but it can only hold products from that distributor (often the distributor stocks it for you). Thus you'll typically see Coca-Cola and Pepsi products segregated in different coolers, if the store sells both. I presume, but don't know first-hand, that for built-in coolers you want stocked by the distributor, they'll also require segregation. Frito-Lay distributors operate similarly--they'll come in and stock your shelf if you want (I dunno if there's a sales premium), but typically they'll require the Frito-Lay products be segregated, and they'll provide branded shelving if you want.
- khannn 10mo ago
  And Pizza Hut ran itself into the ground despite being incredibly popular when I was a child
- vondur 10mo ago
  Ha, the University where I work signed an exclusive agreement to only sell Pepsi products on campus. I'm sure there was some kickback money given to people here to push it through.
  - RajT88 10mo ago
    My wife's university has a totally egregious contract which is exclusive to a food provider for cafeteria food and event catering. If you want to, say, have a student group sell cookies or whatever, the provider has to approve and you have to pay to host it. The contract is for 10 years. No freaking way somebody signed off on that without money under the table.
    - diab0lic 10mo ago
      Sodexo or Aramark I assume? Unfortunately standard practice on University campuses across Canada and the USA.
      - phantasmish 10mo ago
        Yeah, exact same thing when I was reluctantly involved in a club’s leadership and organizing an on-campus event with food 20+ years ago. I think it was Sodexo in our case. Must be common.
      - nick__m 10mo ago
        At my institution there was a student revolt, chartwell was kicked out and it is a work co-op. The quality has increased, the employees are better treated and the cost stayed the same, and stupid rules like that are no more !
      - RajT88 10mo ago
        Sodexo
    - conception 10mo ago
      It’s probably more there are only two or three companies, if that, that can service a customer that large and meet their requirements/SLAs by contract. And the three all happen to have the same sort of agreements required.
- carlosjobim 10mo ago
  This is world wide. Coke and Pepsi not only provide restaurants with soft drinks, but also all other drinks, most importantly beer. Local beverage distributors will be with either one or the other. Restaurant owners will sign a contract with a distributor to buy only from them, and in exchange get discounts, free equipment rentals such as drink fridges and beer taps, and things like sunshades, tables and chairs, signage, etc.
  - andsoitis 10mo ago
    > Coke and Pepsi not only provide restaurants with soft drinks, but also all other drinks, most importantly beer. Neither Coke nor Pepsi brew or sell beer.
- pjc50 10mo ago
  There's a complicated UK beer version of this with more parties. Basically pubs might be any of: - directly owned and managed by the brewery - owned by the brewery and leased to a manager, like a franchise - independent, but contracted exclusively - genuinely independent Contracted pubs may also have limited supplies of "guest ales". Usually there's sufficient local competition to keep the pubs good, but local monocultures can also be a problem.
  - carstout 10mo ago
    Most of the pubs are owned by the PubCos Back in the past it was mostly brewery owned with 6 big brewers owning most of them. So a law got passed in the 90s which limited the breweries to a max of 2k pubs. Unfortunately what happened was we ended up with a bunch of very large Pubcos who were often linked to a particular brewery anyway (some were formed by former brewery execs and the pubs were "donated" in return for an agreement to keep buying from the brewery"). The Pubcos started with low rents but high stock prices but now go for both high rents and high stocks. Its why often see pubs changing hands frequently when someone tries the dream of pub landlordship but runs out of money. Its why Wetherspoons is "cheap" since generally they convert buildings and so have a freehouse model.
- cosmie 10mo ago
  Yea, when I worked at Dominos we were charging like $2.50 for a 20 oz coke and $3.50 for a 2 liter. Since the same 2 liter was like $1 at the grocery store, I thought we were gouging costumers and making bank on them, and figured the manager was being dramatic whenever inventory counts were off by a few. Turned out we had a really raw deal with Coke, and were only charging like 25-50¢ more than we bought from for. And we were also required to order them from the distributor, to prevent us from stocking the cooler with cheaper ones from the grocery store.

levocardia 10mo ago

Seems awfully dumb to attempt the whole "collusion on prices" thing when both you and your partner in crime are locked in your own cutthroat duopoly battles. What's to stop Coca-cola+Target from turning around and crushing Walmart+Pepsi on pricing the instant they try to "price-gouge"?

JKCalhoun 10mo ago
We're now to a point where we are cheering on a battle between duopolies.
- mgiampapa 10mo ago
  RC Cola, this is your moment to shine.
- venturecruelty 10mo ago
  How is that different from any regular election year?
taurath 10mo ago
It’s not cutthroat, it’s comfortable partnership with a cutthroat veneer. If either of them wins, they have a monopoly and are at higher risk of regulation or breakup. So they fight openly over small fries, and keep writing dividend checks. They write the rules.
cowpig 10mo ago
Monopolist economic surplus?
darth_avocado 10mo ago
The whole point of Duopoly is to have a “competitor” so that you can continue to act as a monopoly behind the scenes while avoiding the appearance of a monopoly. You get to point finger at the other guy when there’s scrutiny and argue there’s no monopoly, but also increase your own prices when your competitor does it.
jazzyjackson 10mo ago

JKCalhoun 10mo ago

"A Trump official tasked with dealing with affordability tried to hide this complaint…" Why? Unless there was some kind of payola, this is doesn't make sense.

WolfeReader 10mo ago
Capitalism as it is taught: lots of companies competing with each other, resulting in better goods at affordable prices! The customer wins! Capitalism in practice: a relative handful of rich people cooperating with each other to extract as much money as possible from the middle and lower classes. You can see which version of capitalism this document supports. The "fiscally conservative" aspect of the Republican party (and the Democratic party to a lesser degree) don't want people to think of capitalism-in-practice; they want happy consumers who think that competition is still a thing. Since this document clearly goes against that narrative, it must be suppressed.
- janalsncm 10mo ago
  Corporations are a funny kind of alien intelligence. Producing a better product or a lower price is just one way to ensure their survival. Another is to manipulate the rules of the market itself, including the rule enforcers.
  - OgsyedIE 10mo ago
    It's the product of an evolutionary process. You could scrap capitalism entirely and still get cartel formation, since you have agents with varied traits competing to gain the resources to be selected to reproduce [their continued existence, into the future]. A couple other ways of looking at it come from Bataille, Odum, Prigogine or Schmitt.
  - venturecruelty 10mo ago
    You can also just pay your workers in scrip and then hire Pinkertons to kill them if they get uppity about it. It's hard not to become cynical when people seem almost willfully ignorant of the despicable history of capital in this country...

GenerWork 10mo ago

>“I actually think we’re capable of taking whatever pricing we need,” said CFO Hugh Johnston in 2022. And the company did just that, raising prices by double digit percentages for seven straight quarters in 2022-2023. I hate to say it, but was he proven wrong? People are still buying junk food and soda (their primary products) despite prices going up. Looking at Pepsis profit margin, it seems to have hovered between 9.5% and 10.5% since 2021.

janalsncm 10mo ago
The point of the complaint is that they were able to do this due to illegal collusion. And even if people buy a lot of junk food, they might have bought competitors’ junk food. Laws are still laws even if you don’t like the people the laws protect.
- itsdrewmiller 10mo ago
  Is that the point? The illegal collusion was with walmart to keep their prices artificially low compared to everyone else. They weren't colluding with coke to raise all soda prices.
- naijaboiler 10mo ago
  Exactly pricing discrimination (i.e. selling at different prices to different customers) is absolutely legal and is market efficient in a market with multiple sellers and multiple buyers. Pricing discrimination combined with monopsony(single large buyer) or monopoly ( single large seller) powers is not market efficient. It leads to higher prices by end consumers. Price discrimination via collusion + Walmarts monopsony in grocery industry violates that 1930s act and is illegal

yndoendo 10mo ago

Bigger the company the more power they have to dictate the purchasing price from producers and the cost for consumers. This is not just in the food industry it is also in retail such as Amazon. Companies like Kroger are so big they dictate the purchase prices from farms. The farmers were better off in the past with multiple competitors creating a bidding war. Same with consumers, products had to be priced right to win their business. A company I work for had to give free engineering labor in millions of dollars to get access to one of the largest retailers in the USA. Too big not-to-do-business-with harms everyone except the retailer.

autoexec 10mo ago
> Bigger the company the more power they have to dictate the purchasing price from producers and the cost for consumers. That wasn't always true. The Robinson-Patman Act made it illegal to give preferential treatment to large retailers specifically in order to prevent what we're seeing with walmart and amazon today. The US just stopped enforcing the law (and also anti-trust laws that would have protected local/small businesses) so here we are. At any point the US could decide that enough is enough and fix the situation but we'd probably have to make it actually illegal for corporations to bribe government officials before it stands a chance of happening.
- eftychis 10mo ago
  It used to be illegal to bribe. Used to... Make a law impossible to enforce, and you suddenly transform the act to a totally legal one, at the expense of people losing trust in the system (specifically the U.S. Supreme Court and Congress). And at some point, the system breaks.
  - gruez 10mo ago
    [flagged]
    - kevin_thibedeau 10mo ago
      Lobbying involves quid-pro-quo: You pass the bill we wrote for ourselves and we give you a cushy consulting job when you leave Congress.

agentifysh 10mo ago

Time for a class action lawsuit. You can submit your personal information to a wordpress powered law firm's upload forms in exchange for your twenty bucks without inflation compensation in about 5 years and they collect a cool 50% fee distributed amongst millionaire lawyers.

hackthemack 10mo ago
Something is seriously wrong with the US justice system. Some links to bolster your point. https://waldenconsultants.com/2020/04/13/yet-another-study-shows-who-really-wins-in-class-actions-the-lawyers/ https://waldenconsultants.com/2020/04/13/yet-another-study-s... https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
xrd 10mo ago
I wish I could do the reverse. Could I and a million other people pay $20 now to a few law firms that could fight this without need for compensation and do everything to expose this to everyone in America?
- agentifysh 10mo ago
  hmmm that is very interesting wonder if its possible even
- gruez 10mo ago
  Isn't that what organizations like the ACLU are for? Except ACLU fights for civil rights whereas your hypothetical organization fights for consumer rights. The reason why it doesn't exist is that it suffers heavily from the free rider problem. Any individual's donation of $20 or whatever is unlikely to get them $20 worth of returns, because the lawsuit is either funded or not. Moreover you'd benefit regardless of whether you donated or not, so there's no incentive to donate.
  - citizenkeen 10mo ago
    But isn’t that true of the ACLU as well?

theLegionWithin 10mo ago

soda isn't actually food, nor is it healthy. Pepsi should be $40 a carton

nitwit005 10mo ago
You should look up what PepsiCo owns.
- lanfeust6 10mo ago
  Garbage, mostly. Aside from bottled water which is itself often redundant, there's very little they sell that could be considered "good" for people.
  - venturecruelty 10mo ago
    That makes collusion okay. QED.
    - lanfeust6 10mo ago
      No.

lanfeust6 10mo ago

[flagged]

digital-cygnet 10mo ago
It's not the discounting that's a problem -- it's the intentionally watching other stores and preventing them from closing the "price gap" with Walmart > As a result of Food Lion threatening Walmart’s price gap, Pepsi created a plan to nudge Food Lion’s retail prices on Pepsi products upward by reducing promotional payments and allowances to Food Lion and raising other costs for Food Lion
- lanfeust6 10mo ago
  > It's not the discounting that's a problem -- it's the intentionally watching other stores and preventing them from closing the "price gap" with Walmart This is circular. You are just describing a selective/privileged discount, again. Food Lion could of course sell some items at a loss (Walmart did this, to gain market share and beat out smaller businesses). Costco continues to sell hot dogs at a loss. But that probably wouldn't work for Pepsi products in this context; fortunately, there are other products beyond Pepsi.
  - foolswisdom 10mo ago
    You asked how a price cut translates to raising prices everywhere, and the parent comment answered. Though even without the further raising of prices for the competitors, the effect of many such agreements is that the competitors have a harder time competing, some shut down, and now the Walmart can also charge more because there's less competition.
    - lanfeust6 10mo ago
      > the parent comment answered There's no evidence that it translates to raised prices everywhere. > competitors have a harder time competing Yes > some shut down No one is shutting down because of Pepsi. Offer some evidence.

mc32 10mo ago

[flagged]

citizenkeen 10mo ago
Weird stance to take since PepsiCo owns a number of food subsidiaries like QuakerOats. Pretty sure oatmeal is a nutritional foodstuff.
- mc32 10mo ago
  Excuse me if I don't count <5% of their revenue source as making a difference.
  - deleted 10mo ago
    [deleted]

therobots927 10mo ago

Shout out to Friedman, Hayek, Rand, Reagan, and their neoliberal enablers in the democrat party like Clinton. All US Citizens and the unlucky citizens of our colonies are property of US corporations. Bought and paid for. It’s about to become really obvious to anyone paying even the smallest amount of attention just how screwed anyone not in the top 1-5% really is.

GuinansEyebrows 10mo ago
please, please read Dark Money by Jane Mayer if you haven't already.
- therobots927 10mo ago
  Will add it to my list!

scentoni 10mo ago

The greatest enemy of a free market is a successful capitalist.

jimt1234 10mo ago

> A Trump official tasked with dealing with affordability tried to hide this complaint... First, that made me raise an eyebrow. > ...and failed. Then, that made me laugh. > And now there’s a political and legal storm as a result. Finally, that made me sigh, because nothing's gonna happen. The "storm" will pass, as it always does.

codingrightnow 10mo ago
The storm is likely within the administration and across governmental departments. Trump will try to drive out whoever doesn't toe his line, even if he legally doesn't have the authority to do so.

kotaKat 10mo ago

Oh! I've witnessed this quietly every time I buy soda! I'm a habitual enough soda drinker that I'm a six-pack-a-day diet soda drinker (don't judge me, at least it's not Red Bull). I notice that there's vendor collusion at Walmart for months at a time where the Pepsi six-packs will typically go on sale for a few months at a sub-$4 to $5 price (currently it's $4.98) while Coke packs will be $5-6 off sale. Cycle three to four months and Coke will enter the $4 position and Pepsi goes back up to a full retail price for the next quarter. I've always seen the 'cycle' of the two competitors constantly hitting a 'sale' price across various retailers.

antonymoose 10mo ago
Seems to be a pattern among all products I’ve ever encountered. I’m a heavy sales shopper. My local grocer (Ingles) will do a promo for Sargento cheese or Chobani yoghurt for instance, normal price of 5$ let’s say, then drop it to $2 for a week, then to $4 the next week, then back to full price. This rinses and repeats every 2 or 3 months for most sales products. Sadly for this RedBull drinker, they never go on sale, at all, ever, anywhere.
foxyv 10mo ago
I used to drink a lot of seltzer purchased in those 1 liter bottles. Then I bought a countertop soda maker. I can make the same amount of soda that I was paying $1.50 for at the store for $0.20 now. (I refill my own CO2 off a 10 lb tank) I can't imagine paying more than $0.50 for a liter of soda anymore. They have got to be making an obscene profit on those drinks. Even weirder, the drinks that I flavor myself taste way better than the ones in the store. I suspect they have been titrating their flavoring down over time. Root Beer I make myself using drink powder tastes way better than the ones from the store. Same for grape and orange sodas.

hasbot 10mo ago

Where are the mainstream media stories about this? The article mentioned the story blowing up but a Google search showed only one media outlet covering the story.

deleted 10mo ago
[deleted]
camgunz 10mo ago
Or like any mea culpas. I remember Larry Summers scoffing about this, as well as our very own Walter Bright.

dominicrose 10mo ago

As if we needed another reason not to buy junk food. By the way, in France we have a 5.5% VAT on food, instead of 20% for other products. Junk food is also 5.5% but cat food is 20%. I wonder if this is going to change some day for junk food or sodas.

poppafuze 10mo ago

[dead]

twoodfin 10mo ago

The Robinson-Patman Act is terrible law. It’s been routinely violated (unknowingly in most cases) for decades across effectively every sector of the economy & enforced vanishingly rarely. If it were to be enforced uniformly and aggressively it would be devastating: Every negotiation between a supplier and a purchaser at every level is potentially a federal crime! If it were to be enforced capriciously, it would put unchecked power over everyday commerce—again at every level—into the hands of the FTC and its political masters. No thanks. Repeal it so we can stop hearing about this “one neat trick to roll back neoliberalism!”

hereme888 10mo ago

The legal theory is Robinson-Patman promotional discrimination, not a price-fixing judgment. The complaint’s factual story can imply broader price effects, but that is not the same as “proven collusion” across the whole economy. The case was not dropped in February; it was extended.

codingrightnow 10mo ago

Just stop buying Pepsi products. Stop going to Walmart. You don't need either. You don't need potato chips or soda or Gatorade or any of the other poison they produce.

whamlastxmas 10mo ago
Okay I'll go to Kroger who also has horrible anti competitive practices and buy their store brand which is literally just Nestle but in different packaging
foxyv 10mo ago
Why do you think that all the other brands don't have similar deals?
tencentshill 10mo ago
I just look at $7 for a bag of chips (which seems to get smaller every year) and it makes the decision easy.

everdev 10mo ago

This is just the tip of the iceberg, and it's only in the grocery shopping industry. Our country and civilization is slowly turning into organized crime.

MagicMoonlight 10mo ago

Companies are enshittifying everything so quickly now that it must be via collusion.