From the Super Mario Wiki
Pie is an item used in the arcade game Mario Kart Arcade GP. In the game, the player can toss the Pie backwards (and only backwards) to another player. If the player gets a successful hit, the hit player's screen is covered in pie cream. This item is functionally similar to the Blooper item used in Mario Kart DS, which effects all players in front of the player, rather than a single opponent behind the player. Unlike the Pie, though, the Blooper gets a successful hit no matter what.
This item reappears in Mario Kart Arcade GP's sequel, Mario Kart Arcade GP 2 having the same effect on other drivers as it did in the first game.