Is there a predator in your tank?

Editorial, GSA Business

In the convenience store business, low gas prices attract customers, but it’s what’s inside the store that makes the business profitable.  But if your competition is part of mega money-making superstore offering low gas prices, business becomes difficult-almost impossible.

The South Carolina Small Business Chamber, the SC petroleum Marketers Association and the SC Association of Convenience Stores joined forces to lobby against predatory gas pricing.

According to state law, a company cannot sell gas at below cost for more than two weeks per year-a measure that intends to prevent the larger companies to compete with unrealistic prices.

“The concern is that big businesses, like Wal-Mart, are selling gas below cost more than the 14 days a year allowed by law,” says Frank Knapp, executive director of the SC Small Business Chamber.  He says the huge chains take a loss on gas in an effort to drive up the market share, leaving small businesses scrambling to compete for customers.

Wal-Mart has been at the center of several predatory gas pricing controversies around the country. Murphy Oil USA, located outside Wal-Mart and Sam’s Club stores, has lawsuits pending against it in states such as Florida, Oklahoma, and Louisiana.

While the SC Department of Consumer Affairs says it has received several calls about large businesses ignoring the 14-day rule, Knapp says the offenders are ignored by those designated to be the watchdog for predatory pricing.

A study conducted by The University of Tennessee at Chattanooga shows predatory pricing strategies left unchecked end with the predator raising its price after the competition has been forced out of the market.  While consumers may benefit from the below cost prices during the current oil crisis, in the long-term it will only create problems for our local economy

It is an unfair burden for small retailers to watch over what the SC Department of Affairs should have been doing all along.  Small Businesses are being forced out by those that can afford to buy in bulk and continue to sell below cost illegally.  It’s a fight small retailers can’t win, and ultimately consumers will pay the price.

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