![]() The sale of identical goods at different prices does not always raise an antitrust issue, but could if certain safeguards are not met. Though the rationale underlying the jury’s verdict is unknown at this time, the case offers an opportunity to remind manufacturers about the potential risks of offering price discounts to certain customers, but not others. Following a nearly two-week trial, the jury sided with Living Essentials, concluding that the energy drink maker’s pricing policies did not illegally discriminate in favor of Costco and against the competing wholesalers. At trial, however, Living Essentials argued that the wholesalers failed to prove that they lost customers because of higher prices, and pointed to other reasons for the lost sales, such as the cleanliness of Costco’s stores, its rewards program, and free shipping. According to the plaintiff wholesalers, they have been unable to compete with Costco, and have lost hundreds of thousands of dollars in sales of the energy drink to the retail giant due to Living Essentials’ discriminatory pricing. The wholesalers alleged that they paid as much as 15 to 20% more for the energy drink than was paid by Costco, and claimed that the favorable pricing arrangement violated the Robinson-Patman Act, 15 U.S.C § 13 et seq., which generally prohibits manufacturers from charging different prices to different customers for the same product (a practice known as price discrimination). In February 2018, several small, privately-owned wholesalers filed suit against the energy drink maker, Living Essentials LLC, claiming that it offered Costco preferential pricing, discounts, and rebates for its 5-Hour Energy product that were not offered to the big-box chain’s competitors. Cal.) ultimately did not succeed, the case provides a reminder to businesses of the importance of reevaluating pricing policies on a regular basis. ![]() ![]() Though the plaintiffs in US Wholesale Outlet & Distribution Inc. Last week, a California federal jury concluded that the maker of 5-Hour Energy Drink did not violate federal antitrust law by selling the energy shots to Costco for less than the price charged to its family-owned rivals. ![]()
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