- 19 -
likely profit margins for the years at issue.
Dr. Rossi examined Nick's Liquors' advertising and invoices,
and he reviewed records of interviews with petitioners'
competitors and suppliers. He analyzed data from Nick's Liquors'
invoices. He also toured two of petitioners' stores and two
stores of their competitors. He concluded that Nick's Liquors'
margins on its sales were considerably less than the 27-percent
average obtained from the Department of Commerce survey. Dr.
Rossi based his determination on three factors: First, that
Nick's Liquors' advertisements and invoices suggest profit
margins of between 5 and 7 percent; second, that Nick's Liquors
did not operate a representative retail liquor business because
of Nick's Liquors' high-volume, low-priced operations; and,
third, that Nick's Liquors' prices were kept low by the
competitive retail environment of northwestern Indiana.
Dr. Rossi analyzed Nick's Liquors' likely profits by looking
at its three major product lines: Beer, wine and liquor, and
cigarettes. In the beer category, Dr. Rossi examined six highest
selling brands, which accounted for 57 percent of beer sales.
Based upon the newspaper advertisements, he determined that the
average margin in beer was 5.99 percent. Dr. Rossi concluded
that this margin did not apply only to infrequent "specials" but
to Nick's Liquors' beer prices generally.
Dr. Rossi observed that Nick's Liquors' wine and liquor
Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NextLast modified: May 25, 2011