Opening a cheaper business near an existing business
Question
Shalom u’vracha.
If because of him the second one will have to close his business, it is forbidden; if not, it is permitted.
Answer
Source
In Shulchan Aruch, siman 228, se’if 18, it is explained that it is permitted to lower prices in order to attract customers, and likewise in the Rema, siman 156, se’if 5, that it is permitted to reduce the interest taken from non‑Jews on loans. However, the Pischei Teshuva cites from the responsa Pnei Meirot that all this permission to lower prices applies only to food products upon which the life of the city’s residents depends, and not to other items. Nevertheless, it is permitted to lower the price in such a way that the general market price does not drop, but only in order to draw customers to oneself, and this is similar to distributing nuts.
