The Blubber

Per Politico

The US Federal Trade Commission (FTC) is launching a preliminary investigation regarding possible price discrimination by giants Coca-Cola Co and PepsiCo Inc.

The agency seemingly tries to enforce a decades-old law that bans these practices. The scrutinization specifically brings up the Robinson-Patman Act, which prevents price discrimination against small businesses by large franchises and chains.

To answer just how long the law is, referred to as largely dormant, the law was established in 1936. Its purpose is to prevent suppliers from offering better prices to larger retailers.

The news comes at a time when Americans lost over $7 trillion in net worth in 2022. Billionaires in America lost $660 billion in that period.

The law tries to level the playing field between small retailers and larger chain stores by imposing a fair price between the two groups. Although established in 1936, the law has been dormant for decades, but now, the FTC is reaching out to large retailers like Walmart to see whether the law was violated.

The two companies combined controlled about 72% of the soda market in 2021, per Statista. While Pepsi controlled a still significant 26% of the market, Coca-Cola controlled a much larger slice at 46%.

Despite the law not being formally abandoned, a previous report by the Justice Department shared how they would cease enforcement of the Robinson-Patman law. The report was released in 1977, and years later, Alvaro Bedoya, the newest commissioner of the FTC, is trying to make the law a top priority for his tenure.

Not everyone was happy with this decision as people like a former Trump Administration FTC general counsel, Alden Abbott, gave a statement regarding his thoughts. Abbott is also George Mason University's senior research fellow for the Mercatus Center.

Abbott: “Bringing more Robinson-Patman Act cases would raise prices for the lowest income consumers,”

See flow at unusualwhales.com/flow.

Other News:

• US Households Lost a Total of Around $7 Trillion in Net Worth in 2022, Losing $400 Billion in Q3 Alone
• Global Billionaires Lost Almost $2 Trillion in 2022: American Billionaires Lost $660 Billion

Resources:

Politico

Statista