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365.030 Sale at less than cost or gift of commodity to destroy competition
prohibited.
(1)
(2)
(3)
(4)
Except as provided in KRS 365.040, no person engaged in business within this
state shall sell, offer for sale or advertise for sale any article or product, or
service or output of a service trade, at 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 injuring
competitors and destroying competition.
In establishing the cost of a given article or product to the distributor and
vendor, the invoice cost of the article or product purchased at a forced,
bankrupt or close-out 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 the date of the sale of the article or product
replaced through the ordinary channels of trade, unless the article or product is
kept separate from goods purchased in the ordinary channels of trade and
unless the article or product is advertised and sold as merchandise purchased
at a forced, bankrupt or close-out sale or by means other than through the
ordinary channels of trade, and the advertising states the conditions under
which the goods were so purchased, and the quantity of the merchandise to be
sold or offered for sale.
As applied to production, "cost" includes the cost of raw materials, labor and all
overhead expenses of the producer. As applied to distribution, "cost" means
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 the distributor and
vendor. The "cost of doing business" or "overhead expense" means all costs of
doing business incurred in the conduct of the 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 cost, credit losses, all types of
licenses, taxes, insurance and advertising. "Vendor" includes any person who
performs work upon, renovates, alters or improves any personal property
belonging to another person.
Where a person complained of as violating any of the provisions of this section
is a member of a particular trade or industry that has an established cost
survey for the locality and vicinity in which the offense is committed, the cost
survey shall be competent evidence to be used in proving the costs of such
person.
History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from
Ky. Stat. secs. 4748h-3, 4748h-4, 4748h-5, 4748h-6.
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