Coca-Cola and PepsiCo could face pricing probe
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The Federal Trade Commission is conducting a preliminary investigation into Coca-Cola Co (NYSE:KO) and PepsiCo (PEP) over potential price discrimination in the soft drink market, according to Politico.
Sources say regulators are probing if the beverage giants are breaking an obscure law known as the Robinson-Patman Act that sets out that larger retailer chains cannot receive better prices than smaller retailers. The Robinson-Patman Act is said to be rarely enforced with only a few examples of enforcement actions over the last few decades because it could have the unintended consequence of increasing prices for consumers.
Coca-Cola (KO) and PepsiCo (PEP) have not responded to the report. Both companies are due to issue their earnings reports in the early part of February. See consensus earnings estimates for KO and PEP.