L.J.ZUCCA, INC. VS. ALLEN BROS. WHOLESALE
DISTRIBUTORS INC., ET AL.
A-2723-11T1
Pursuant to the Unfair Cigarette Sales Act of 1952,
N.J.S.A. 56:7-18 to -38, the Director of the Division of
Taxation issues price lists for all brands of cigarettes,
which minimum base prices wholesalers are presumptively
required to charge retailers. Proof of underpricing, or
rebates or concessions granted to retailers, constitutes
prima facie evidence of anticompetitive intent, which is a
required element of a statutory violation. Anticompetitive
intent under the Act does not have the same meaning as
"predatory intent," as that phrase is understood in federal
antitrust law. Plaintiff was not required to prove that a
defendant had the ability to recoup its underpricing
losses.
However, a wholesaler may defend against a prima facie
case of violation by presenting evidence of its actual
costs of doing business that are less than the presumed
costs the Director uses to set the price schedule. It may
also defend by showing that it did not have the requisite
anticompetitive intent in underpricing its cigarettes or in
granting rebates or concessions. 01/09/14
DISTRIBUTORS INC., ET AL.
A-2723-11T1
Pursuant to the Unfair Cigarette Sales Act of 1952,
N.J.S.A. 56:7-18 to -38, the Director of the Division of
Taxation issues price lists for all brands of cigarettes,
which minimum base prices wholesalers are presumptively
required to charge retailers. Proof of underpricing, or
rebates or concessions granted to retailers, constitutes
prima facie evidence of anticompetitive intent, which is a
required element of a statutory violation. Anticompetitive
intent under the Act does not have the same meaning as
"predatory intent," as that phrase is understood in federal
antitrust law. Plaintiff was not required to prove that a
defendant had the ability to recoup its underpricing
losses.
However, a wholesaler may defend against a prima facie
case of violation by presenting evidence of its actual
costs of doing business that are less than the presumed
costs the Director uses to set the price schedule. It may
also defend by showing that it did not have the requisite
anticompetitive intent in underpricing its cigarettes or in
granting rebates or concessions. 01/09/14
