Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, January 10, 1995                   TAG: 9501100072
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: LITTLE ROCK, ARK.                                 LENGTH: Medium

COURT RULES IN FAVOR OF WAL-MART

Arkansas' Supreme Court ruled Monday that Wal-Mart Stores Inc. was not trying to drive independent drugstores out of business when it sold prescription drugs and other items at a loss.

In a 4-3 ruling, the justices overturned a lower-court ruling that the nation's largest retailer had engaged in ``predatory pricing.''

Wal-Mart spokesman Don Shinkle said from the company's Bentonville headquarters that the decision vindicated the chain's aggressive price strategy.

``We're elated,'' Shinkle said. ``This is a victory for the American competitive free enterprise system and, most importantly, a victory for the American consumer.''

The ruling, however, was a blow to small businesses struggling to compete with the retail giant.

``The only feeling I have is that pharmacists have lost. Small business will suffer,'' said Dwayne Goode, owner of American Family Drugs, one of three plaintiffs in the case. ``In the long run, consumers will suffer. Consumers will be the hardest hit.''

American Family Drugs and Baker Drug Store of Conway and Family Pharmacy of Mayflower sued Wal-Mart in 1991 over alleged predatory pricing. In 1993, Circuit Judge David Reynolds agreed that Wal-Mart was out to destroy its competition and awarded the plaintiffs $289,407.

The high court said that Wal-Mart did indeed sell some items at below cost but that it didn't do so to destroy the competition.

The case was the first test of Arkansas' 57-year-old Unfair Trade Practices Act, which bars stores from selling below cost to injure or crush competitors.

The case was considered a serious challenge to the retail industry's practice of offering ``loss leaders,'' or selling some items below cost to attract customers.

The high court said the Arkansas law doesn't make loss leaders illegal.

``Drugstores are far from destroyed,'' the court wrote. ``There is simply enhanced competition in the area.''

The plaintiffs didn't immediately say whether they planned to appeal to the U.S. Supreme Court, but Baker Drug Store owner Jim Hendrickson didn't think so. ``I really think that it's over,'' he said.