violations. The party or parties complained of shall be given proper notice of hearings, and after public hearing, the director shall issue such order as is deemed essential to carry out provisions of the act. Violation of any of the provisions of the act or any order, rule, or regulation constitutes a misdemeanor punishable by fine or imprisonment. Any act of the director pursuant to the provisions of this chapter may be reviewed by any court of competent jurisdiction.

Gen. Laws (Deering, 1937), as amended by Gen. Laws (Deering, Supp., 1939), Act 3796

Alcoholic Beverage Control Act

Section 54 (h) prohibits the giving by a manufacturer or wholesaler of any alcoholic beverages as free goods as part of any sale or transaction involving alcoholic beverages.

Section 54 (i) prohibits the giving by a manufacturer or wholesaler of secret rebates, concessions, or anything of value for the purpose of encouraging the sale of alcoholic beverages manufactured or sold by the manufacturer or wholesalers.

Section 54 (j) prohibits a manufacturer or wholesaler from wilfully and knowingly discriminating in the price of any brand of distilled spirits sold to different retail licensees in the same trading area purchasing under like terms and conditions.

Section 54 (k) prohibits a manufacturer or wholesaler from paying, crediting, or compensating a retailer for advertising, display, or distribution services in connection with the advertising and sale of distilled spirits.

Section 55.7 provides that no person licensed to sell alcoholic liquor under the terms of the statute shall give any premium, gift, or free goods in connection with the sale of any alcoholic beverage. Violation of any of these sections constitutes a misdemeanor.

Gen. Laws (Deering, 1937), Act 9310

Sale of Wool

Sec. 1. Deductions forbidden.-No person, firm, corporation, company or association purchasing wool from a producer shall make a specific deduction for tags, fribs, crutchings or other off-wools, either on a basis of the percentage of the weight or percentage of the value of the wool. Any provision in a contract to purchase wool from a producer, providing for such a deduction, is hereby declared to be invalid. (Stats. 1937, p. 1407.)

Sec. 2. Violation a misdemeanor.-Violation of the above section is a misdemeanor. (Ibid.)

COLORADO

REGULATION OF PRICE COMPETITION

A. RESALE PRICE MAINTENANCE

Stat. Ann. (Michie, Supp., 1939), c. 165

Sec. 20 (1). Contracts relating to sale of trade-marked articles. No contract relating to the sale or resale of a commodity which bears, or the label or container of which bears, the trade-mark, brand, or name of the producer or distributor such commodity, and which commodity is in free and open competition with commodities of the same general class produced or distributed by others shall be deemed in violation of any law of the State of Colorado by reason of any of the following provisions which may be contained in such

contract:

(a) That the buyer will not resell such commodity at less than the minimum price stipulated by the seller.

(b) That the buyer will require of any dealer to whom he may resell such commodity an agreement that he will not, in turn, resell at less than the minimum price stipulated by the seller.

Such provisions in any contract shall be deemed to contain or imply conditions that such commodity may be resold without reference to such agreement in the following cases:

(a) In closing out the owner's stock for the bona fide purpose of discontinuing dealing in any such commodity and plain notice of the fact is given to the public; provided the owner of such stock shall give to the producer of such commodity, or to the distributor, from whom the same was purchased, prompt and reasonable notice in writing of his intention to close out said stock, and an opportunity to purchase such stock at the original invoice price.

(b) When the trade-mark, brand, or name is removed or wholly obliterated from the commodity and is not used or directly or indirectly referred to in the advertisement or sale thereof.

(c) When the goods are damaged or deteriorated in quality and plain notice of the fact is given to the public in the advertisement

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and sale thereof, such notice to be conspicuously displayed in all advertisements.

(d) By any officer acting under the orders of any court. (L. 37, p. 559, sec. 1.)

Sec. 20 (2). When law does not apply.-This act shall not apply to any contract or agreement between or among producers or between or among wholesalers or between or among retailers as to sale or resale prices. (Id. sec. 2.)

Sec. 20 (3). Definitions.-The following terms, as used in this act, are hereby defined as follows:

(a) "Commodity" means any subject of commerce.

(b) "Producer" means any grower, baker, maker, manufacturer, bottler, packer, converter, processor, or publisher.

(c) "Wholesaler” means any person selling a commodity other than a producer or retailer.

(d) "Retailer" means any person selling a commodity to con

sumers for use.

(e) "Person" means an individual, a corporation, a partnership, an association, a joint-stock company, a public trust, or any unincorporated organization. (Id. sec. 3.)

Sec. 20 (4). Unfair competition defined and made actionable.Wilfully and knowingly advertising, offering for sale, or selling any commodity at less than the price stipulated in any contract entered into pursuant to the provisions of this act, whether the person so advertising, offering for sale, or selling is or is not a party to such contract, is unfair competition and is actionable at the suit of any person damaged thereby. (Id. sec. 4.)

Sec. 20 (5). Short title.—This act may be known and cited as the "Fair Trade Act." (Id. sec. 5.)

B. PROHIBITION OF SALES BELOW COST

Stat. Ann. (Michie, Supp., 1939), c. 48
Unfair Practices Act

Sec. 302 (3). Sales below cost.-It shall be unlawful for any person, partnership, firm, corporation, joint stock company, or other association engaged in business within this State to sell, offer for sale, or advertise for sale any article or product, or service or output of a service trade for less than the cost thereof to such vendor, or give, offer to give, or advertise the intent to give away any article or product, or service, or output of a service trade for the purpose of injur

1

For sec. 302 (1) dealing with unlawful practices, see Antidiscrimination Legislation: General Prohibitory Laws, infra. For sec. 302 (2) dealing with officers and agents, see infra.

ing competitors and destroying competition and he or it shall also be guilty of a misdemeanor, and on conviction thereof shall be subject to the penalties set out in section 11 of this act for any such act.2

(a) The term "cost" as applied to production is hereby defined as including the cost of raw materials, labor, and all overhead expenses of the producer; and as applied to distribution "cost" shall mean the invoice or replacement cost, whichever is lower, of the article or product to the distributor and vendor plus the cost of doing business by said distributor and vendor.

(b) The "cost of doing business" or "overhead expense" is defined as all costs of doing business incurred in the conduct of such business and must include without limitation the following items of expense: labor (including salaries of executives and officers), rent, interest on borrowed capital, depreciation, selling cost, maintenance of equipment, delivery costs, credit losses, all types of licenses, taxes, insurance and advertising.

Sec. 302 (4). How cost established.-In establishing the cost of a given article or product to the distributor and vendor, the invoice cost of said article or product purchased at a forced, bankrupt, closeout sale, or other sale, outside of the ordinary channels of trade may not be used as a basis for justifying a price lower than one based upon the replacement cost as of date of said sale of said article or product replaced through the ordinary channels of trade, unless said article or product is kept separate from goods purchased in the ordinary channels of trade and unless said article or product is advertised and sold as merchandise purchased at a forced, bankrupt, closeout sale, or by means other than through the ordinary channels of trade, and said advertising shall state the conditions under which said goods were so purchased and the quantity of such merchandise to be sold or offered for sale.

Sec. 302 (5). Cost survey competent evidence in proving costs.In any injunction proceeding or in the prosecution of any person as officer, director, or agent, it shall be sufficient to allege and prove the unlawful intent of the person, firm, or corporation for whom or which he acts. Where a particular trade or industry, of which the person, firm, or corporation complained against is a member, has an established cost survey for the locality and vicinity in which the offense is committed, the said cost survey shall be deemed competent evidence to be used in proving the costs of the person, firm, or corporation complained against within the provisions of this act.

'The act is constitutional, not being a price-fixing statute. As intent to injure competition is a necessary element of violation, the statute is a valid exercise of the police power of the State, being reasonably designed to promote the public welfare. Jonke v. Save-A-Nickel Stores (D. C., Denver, Nov. 20, 1937), 2 P-H, 40376; 106 CCH, 25230.