Wal-Mart Wins Pricing Fight In Court

Wal-Mart Stores Inc. won a battle over its low-price strategy Monday when the Arkansas Supreme Court ruled Wal-Mart’s practice of using prescription drugs as “loss-leaders” was not designed to drive small pharmacists out of business.

The court, in a 4-3 ruling, dismissed a 1993 lawsuit by three Arkansas drug stores that claimed their local Wal-Mart store sold drugs below cost in an attempt to eliminate competition.

Justice Robert Brown wrote for the court that while Wal-Mart would regularly sell items below cost to entice customers into the store, “We discern no proof … that Wal-Mart specifically intended to destroy competition with regard to any one article.”

The case was the first test of the state’s 57-year-old Unfair Trade Practices Act, which prohibits below-cost sales to injure competitors or crush competition.