04ctd

http://www.gaffneyledger.com/news/20..._page/001.html


GREENVILLE, S.C. -- An Upstate gas station has sued, saying that a competitor's lower per gallon prices at the pump have caused them to lose profits.

Pantry Inc. owns a gas station in Gaffney. It sued in Cherokee County, alleging that Petro Express had kept prices at two of its Gaffney stations below cost.

Pantry's suit said its competitor violated South Carolina's Unfair Trade Practices Act. Under the law, motor fuel companies cannot sell below cost with intent or effect of impairing competition.

Pantry said it has lost $165,000 and is seeking three times the amount it lost.

A judge is expected to hear the motion on July 31.



katrina fallout:
http://www.heraldonline.com/scnews/s...-5074375c.html

Lary Ellis (Top)

A law like that would put Walmart out of business. They build a new store in a community, sell stuff for less than local stores can buy it and then raise the prices after the other places go out of business.

P.J

(scratching my head...)

Can such a law be drafted?
Up here, (democrat controlled legislation) we are pretty hard on the Waltons. You know, making them cough up fair healthcare plans and all.


Some stations do appear to jump out of line (rising faster than others for some unknown reason), you would think a Petro or Flying J would be able to sell closer to cost, with the volume they move. Sounds like a lame suit to me.

carpenterje

Money and Greed, Were riding for a fall. No Morals today.

Oilguy

Panty's Inc is stupid!
It is called FREE MARKET... If I want to lose $ to get customers then I should have the right to do it. Competition is good!!
Next thing they will call for is price controls and caps.

Oilguy

P.J

This probably applies to another thread (or three) but, it makes sense here too.

Today, I was comming home today, checking fuel prices all the way (go figure) I noticed the Flying J:

Now, what makes this really magical is that 4.5 miles down the road at the Royal Farms (Enroy brand fuel) the Diesel is $2.99 a gallon, exactaly 10 cents MORE than the regular unleaded.

Huh, what could be going on here, I wonder? Is it that the truck stop is Losing money on every gallon of Diesel it sells? OR, could it be that Gas is somehow worth less 5 miles down the road? 12 cents is a pretty big difference.
Funny how these things work, one fuel will be worth less than other one day, then they switch, then different stations sell one for less, on for more.

Mysterious.

tankeryanker

Our co. has 8 stations & we try to stay within a cent or two of our compition. There are a couple of stations in our area that are selling it cheaper then rack price (the price we pay when I haul it off the pipeline). Doesn't make much sense to me, however they are big enough to make up the diff. in other markets. By keeping their volume up through out their entire market they have a better allocation for when we get put on allocation.

Lrdchaos

They can make up what they lose in gas profits, by getting the customers to stop get some fuel, and buy a pop and something to snack on. They could just raise the price of pop 10 cents and more than make up the difference..

blord

There are very strict US laws regarding "dumping" which means to sell below cost in order to "buy" a market. An example could be like one of the big oil companies coming in and for a 2 year period selling gas at 1/2 price versus the competition. After 6 months to a year there wouldn't be any competitor left in business. Then they can bring their prices up to normal levels and they have the complete market for that area. This is illegal and you get nailed big time.

However, I can argue that not only do I sell gas but a high percentage of my customers also purchase food, cigarettes, snacks, candy, coffee, loaf of bread etc. In that case I can say my product isn't JUST gas but is the complete package. Now if I want to use the gas as a come on I can do that. If I'm not turning a profit in the business, in other words my complete package doesn't compensate for the cut rate gas, then I'm liable for dumping.

A real life example that I'm personally familiar with comes from the computer world, specifically printers. A large printer manufacturer (who is very conservative ... they don't push the legal envelope) was losing mkt. share due to cut rate printers appearing on the market. They finally decided to sell their printers below actual manufacturing cost because to the uninformed consumer a $1 lower price was a buy decision. When taken to court they showed that the printer isn't the only part of the equation. You must take both the printer AND consumables into consideration. Meaning if you purchase the printer you will also wind up purchasing paper and ink cartridges for an extended period. The case was thrown out of court. It turns out the competitors who had filed the suit were doing the same thing and that is why they were able to discount and make "cheap" printers.

Walmart, BTW, does NOT sell below cost to capture a market. Where your local store might purchase 5 lawnmowers, Walmart will go to the same mfg. and purchase 10,000 and distribute them between there 1000+ stores. They get extremely good quantity discounts because of the very high volumes. They don't need to dump to compete with the local mom and pop operations.

The same is true of HomeDepot and Lowes. They make very large corporate puchases which gives them a distinct advantage. Plus they have many items in their inventory.

The lower prices are good for the consumer, but once the small local business can't compete and go out of business then your selection is limited only to what is carried by the large retailer. Like where I live, HD and Lowe's have run most of the local hardware stores and lumber yards out of business. Nothing EDIT me off more than needing a common bolt and finding that the big 2 don't carry it. There aren't any good hw stores around anymore.

Shovelhead

Many of those "Selling Below Market Price" laws were implemented due to Retail Chain stations like Sheetz & WaWa popping up in local areas, undercutting the existing gas stations until they went under then raising their prices.

Crimedog

When I worked for a gas station, my boss told me that it's a law (don't know if it's just MN or federal) that you are required to mark gas up a certain percentage.

TheFog

Actually in several states there are laws that state gas stations MUST make atleast 8 cents profit on each gallon. These laws where lobbied by the oil industry to fight wal-marts murphy oil. The oil companies basicly keep the prices the same between all three. They claimed the laws are anti-trust, because they claimed a chain of stations can lower the price to no profit or below profit for a while and drive out the other guys and then run the price up bigtime
But walmarts idea was sell gas at cost and get people there to shop, but the big oil companies nixed that REALLY quick.

So the idea of free enterprise is dead, especialy with the oil companies.

oestreich84

In Wisconsin the gas price has to be at least 7% above cost. I thought that it was a Federal law, but I guess not.

TheFog

Maybe it is a federal law, I dunno but I know it was passed because of stations like Wal-mart and alot of grocery store chains ticked off the oil companies

Not because of any anti-trust or far market issues.

P.J

Sounds like the only thing bigger and with more political clout that Walmart is Big Oil!
Pretty cool, 97% Chineese goods, and 70% Middle Eastern oil. We are heading in the right direction now!