a. What is price discrimination?
b. isn't that what was going on in the Snapple case? Snapple was charging a higher price per case to the LADs than to the transshippers?
c. Then why was that conduct not considered illegal by the court?
Snapple Beverage Corporation distributed its products through Snapple Distributors, Inc. (SDI) which in turn sold to local area distributors (LADs). These LADs were only allowed to resell Snapple to small retail outlets such as pizzerias, newsstands, and "Mom and Pop" stores within a specific territory. SDI also sold Snapple to other distributors called transshippers, who could sell to any customers is any location. SDI charged transshippers $2.00 to $3.00 less per case, and as a result the transshippers sold to the LADs customers at a cheaper price. During this period the LAD's business declined. The LAD's sued SDI alleging it had violated the Robinson-Patman Act.