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prices. Nick's Liquors advertised itself as a discount liquor
dealer. Its consistent goal was to maintain the lowest prices in
the area. It maintained the warehouse facility at store No. 1
primarily to house large-volume purchases of beer and liquor.
The warehouse was capable of accepting full truckloads and
pallets of beer. Petitioners were frequently able to buy in such
quantities to take advantage of quantity discounts and of
discounts in periodically issued "deal sheets" from the
wholesalers.
Nick's Liquors operated in a highly competitive environment.
Petitioners' stores were near the Illinois border and the city of
Chicago. Because of differences in State taxes, cigarettes sold
for considerably less in Indiana than in Illinois during the
years in issue. Liquor, on the other hand, was generally cheaper
in Illinois. Nick and his family tried to keep prices low, not
only to compete for the Illinois cross-border cigarette business,
but also to keep Indiana beer and liquor customers from making
their purchases in Illinois.
Nick's Liquors ran weekly advertisements in the local
newspaper, the Hammond Times. The advertised prices reflected an
average gross profit margin of 6.31 percent in 1990, 6.52 percent
in 1991, and 6.06 percent in 1992. Many of the ads were small,
single-item "rate holder" ads. The heaviest advertising took
place in December, when Nick's Liquors advertised many more items
than usual. Except for the month of December, the advertised
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