Business 8th Edition by Marianne Jennings

Exercise 23

William Inglis Sons is a family-owned wholesale bakery with production facilities in Stockton, California, that manufactured and distributed bread and rolls in northern California. ITT Continental is one of the nation's largest wholesale bakeries and was a competitor of Inglis in the northern California market. Both Inglis and Continental sold their bread under a private label and an advertised label. Continental's advertised bread was "Wonder" bread, whereas Inglis's advertised bread was "Sunbeam." The private label bread is sold at a lower price than the advertised brand, but the principal difference between the two is the profit. Inglis filed a complaint stating that Continental was selling its private label bread at below-cost prices in a predatory price scheme designed to drive Inglis out of the market. Inglis also says the lower price on private bread earned Continental more grocery-shelf space for its "Wonder" bread. Is such conduct illegal under the Sherman Act? Is predatory pricing a per se violation? [ William Inglis v ITT Continental Baking Co., 668 F.2d 1014 (9th Cir. 1980)]