Predatory gas prices challenged

Predatory gas prices challenged

By Jerry Bellune, Editor, Lexington County Chronicles

Small business owners want the state to enforce the predatory gas pricing law.  Three business organizations have called on the state Department of Consumer Affairs fails to enforce a law limiting gas sales below cost for more than 14 days a year.

State officials respond that enforcement is complicated and takes more time and manpower that they have to spare.

The S.C. Small Business Chamber joined  the S.C. Petroleum Marketers Association and the S.C. Association of Convenience Stores in the call for action against large companies that price below cost as an unfair competitive practice.  Under the law, the burden of proving violations falls on small gas dealers, said Frank Knapp, executive director of the Small Business Chamber.

“That’s like the police telling you after your home or store has been broken into that if you find out who did it and provide convincing evidence, they’ll do something about it.  “Ironically, the predatory gas pricing issue is not one of uneven enforcement —  it’s one of no enforcement,” he said.  “That favors big business.”

“The concern is that big businesses, like Wal-Mart, are selling gas below cost more than the 14 days a year allowed by law. This continuous ‘loss leader’ marketing by big business has a negative effect on more than the small businesses that sell gasoline.
“Any small business, which sells products offered by the big business — for example, clothing or hardware — will lose customers as a result of unfair gas pricing,” he said.

Phil Porter of the state Consumer Affairs Department said his department has received a few complaints, the most recent from the Charleston area. He did not recall a complaint from anyone in this area.

Porter said he realized business groups want to see action but such investigations are “not in our core responsibilities”.  He also said the attorney general shares the responsibility for enforcing the law.

“It’s very labor intensive,” Porter said. “It’s not that we’re unwilling to investigate but that we don’t have the resources.”

No one at the attorney general’s office was available to discuss such complaints.

Steve Sprow, manager of the Wal-Mart in West Columbia, one of two Wal-Marts in the Columbia area that sell gas, said the Murphy USA, not his company, owns the stations.  The Murphy’s manager said he would prefer his district supervisor respond but he has not called back.

Wayne Clamp, who operates an independent BP station in Lexington, said he has trouble competing with the Speedway station next door. His competitor can buy gas at lower prices than he can buy it for, he said.  “There’s not much profit in gas,” he said.

T.A. Harman, who operates an independent station and convenience store at Leaphart and Mineral Springs Road, said large competitors’ pricing has hurt his gas and other sales.  “What they’re doing is against the law,” he said, “but no one enforces it.”

Knapp says any dealer who wants to make a complaint must conduct his own investigation, showing what the predatory competitor paid for the gas and what price he sold it for.  “I have a business to run” Harman said. “I don’t have time to chase that rabbit.”

Sims Floyd of the S.C. Petroleum Marketers Association said it is hard to prove unless the predator forces the small dealer out of business.
In one case, the state Supreme Court has send to the federal courts a case of a large dealer, now out of business himself, who was selling gas at 15¢ to 16¢ a gallon below cost.

“The problem ultimately belongs to the consumer,” Frank Knapp said. “After the big boys force the little guys out of business, they can charge whatever they want for gas.”