Corn Products Refining Company (Corn Products) manufactured corn syrup, or glucose (a principal ingredient of low priced candy), at two plants, one located in Chicago, Illinois, and the other in Kansas City, Missouri. Corn Products sold glucose at the same retail price to all purchasers but charged separately for freight charges. Instead of charging actual freight charges, Corn Products charged every purchaser the price it would have cost for the glucose to be shipped from Chicago, even if the glucose was shipped from its Kansas City plant. This “ base point pricing” system created a favored price zone for Chicago based purchasers and put them in a better position to compete for business. The Federal Trade Commission sued Corn Products, alleging that it was engaging in price discrimination, in violation of Section 2(a) of the Robinson Patman Act. Has Corn Products acted ethically in adopting its base point pricing system? Why would the company adopt this pricing system? Who wins? Corn Products Refining Company v. Federal Trade Commission, 324 U. S. 726, 65 S. Ct. 961, 1945 U. S. Lexis 2749 (Supreme Court of the United States)
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