Wal-Mart Settles Predatory Pricing Charge

Date: 1 Oct 2001 | posted in: Retail | 1 Facebooktwitterredditmail

Wal-Mart admits no wrongdoing and will not pay a fine in a settlement reached with the Wisconsin Department of Agriculture, Trade, and Consumer Protection over a predatory pricing complaint filed by the agency last year. The company will, however, face double or triple fines for any future violations, according to the terms of the agreement.

The complaint accused Wal-Mart of selling butter, milk, laundry detergent, and other staple goods below cost at stores in Beloit, Oshkosh, Racine, Tomah, and West Bend. A bottle of laundry detergent that cost Wal-Mart $6.51, for example, was sold for less than $5 at several stores. The company’s intention, according to the complaint, was to force competitors out of business, gain a monopoly in local markets, and ultimately recoup its losses through higher prices. State officials filed the complaint after Wal-Mart failed to take corrective action following several warning letters sent as early as 1993.

Although most, if not all, states have received numerous complaints from small business owners about Wal-Mart’s anti-competitive practices, Wisconsin is the first state to investigate predatory pricing at the company’s outlets and file a formal complaint.

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Independent Business Initiative, which partners with a wide range of allies to implement policies that counter concentrated power and strengthen local economies.