South-Western Legal Studies in Business

Below Cost Sales Do Not Necessarily Injure Competition
Description Missouri high court held that there was no violation of the state's law against below-cost gasoline sales in the absence of proof that any competitor was forced to sell gas below cost or that any competitor was forced to exit the market.
Topic Consumer Protection
Key Words Below-Cost Sales; Competition
C A S E   S U M M A R Y
Facts The Missouri Motor Fuel Marketing Act makes it unlawful for a retailer to sell gasoline below its cost if the intent or effect of the sale is to injure competition or to unfairly divert trade from a competitor. QuikTrip was accused of pricing its retail gas below its wholesale cost at one store for 23 days. The state sued QuikTrip for violating the law and it was fined $3,000 per day. QuikTrip appealed.
Decision

Reversed and remanded. The fact that a competitor complained that its profits were reduced by QuikTrip's sales was insufficient to make a claim under the statute. During the time period in question, no competitor gas stations exited the market and there was no evidence that any competitor was forced to sell gas below its cost. Lacking evidence of harm to competition, there was no violation under the statute.

Citation State v. QuikTrip Corp., 133 S.W.3d 33 (Sup. Ct., Mo.,2004)

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