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between $.10 and $1 per carton.
Petitioners did not always maintain sale-price margins for
all their cigarettes. Sometimes, some of their cigarettes were
not on sale. Our understanding of the highly competitive
cigarette prices near the Illinois border indicates, however,
that there was little room for the higher margin of 10 to 15
percent routinely charged by stores just 10 miles away from
Nick's Liquors. We doubt that Nick's Liquors' prices ever
exceeded the 8-percent "fair trade" addition to cost imposed
under Indiana law. Nick's Liquors' imposed a higher margin on
cigarettes sold by the pack, however. All things considered, we
find that Nick's Liquors' cigarettes, for the years in issue,
sold for an average margin of 6.5 percent.
Respondent argues that the cigarette margin could, in fact,
be much higher because Dr. Rossi's figures fail to take into
account the large volume of cigarette coupon proceeds that Nick
received from cigarette manufacturers. The evidence shows that
Nick's Liquors redeemed several hundred thousand dollars' worth
of these coupons per year. Our review of the evidence indicates,
however, that, in computing their margins on cigarette sales,
petitioners have taken into account such coupons. There is no
indication that they varied from this practice when they provided
their cost information to Dr. Rossi.
D. Petitioners' Average Margin
To summarize, for the years in issue, Nick's Liquors sold
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