Nick and Helen Kikalos - Page 26

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          in December is generally applicable to advertised wine and liquor           
          during the other months of the year.  This low margin takes into            
          account the year-round "loss leaders" that petitioners advertised           
          and sold below cost, as well as the higher margin, but still                
          discounted, sale of wine and liquor.  Petitioners charged                   
          similarly discounted prices in this range for their in-store and            
          "perma sales".                                                              
               We further conclude that there were substantial sales of               
          petitioners' nonadvertised, and smaller sized, wine and liquor.             
          This category included items such as the 750-milliliter Riunite             
          wine, the 750-milliliter Andre Pink Champagne, and 1-liter Jack             
          Daniels whiskey.  These items, while still generally priced at a            
          discount from retail averages, nevertheless sold at margins near            
          20 percent.                                                                 
               On the basis of the foregoing, we find that the overall                
          margin applicable to petitioners' annual sales of wine and liquor           
          was 13.5 percent.                                                           
               C.  Margins on Sales of Cigarettes                                     
               Dr. Rossi determined that the cigarette invoices and                   
          advertisements supported a finding that the average margin on               
          both generic and brand-name cigarettes was 5 percent.                       
               Once again, Dr. Rossi's figures are based upon advertised              
          sale prices.  Petitioners' principal competitor indicated,                  
          however, that cigarette margins varied; he himself had made                 






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