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Court Overturns Verdict Against Cheap-Gas Seller

DENVER (CN) - The 10th Circuit reversed a jury verdict of more than $1.4 million against City Market after the grocer's competitors accused it of illegally selling gasoline below cost as part of a grocery promotion.

Dillon Companies, owner of two Colorado-based City Markets, gave customers who spent a certain amount on groceries a discount on gas. Competitors Parish Oil and Ray Moore Tire & Petroleum Service claimed the illegally low promo gas price cost them about $200,000 each in lost sales.

The jury compared market gas prices to determine that City Market was selling gas below cost. But because the promotion bundled food and gas sales - and City Market kept its grocery and gas ledgers separate - jurors should have compared the prices of both food and gas, the court ruled.

If they had, they might have found that City Market did not sell the combined goods below cost. It made two to five times more profit from selling groceries than it lost selling cheaper gasoline.

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