DENVER -- Colorado state senators on Tuesday gave initial backing to a measure that allows stores to offer deeper gasoline discounts to their customers despite fears it might squeeze independent gas stations out of business, the Associated Press said.
Last year, a federal court jury determined that King Soopers' promotion in Montrose, Colo., violated a state law that prohibits selling items below cost, prompting lawmakers to introduce a measure (House Bill 1208) to change the law. Right now, companies can violate the law by discounting items in an attempt [image-nocss] to hurt their competition. The bill would only make it illegal if companies use discounts to monopolize a market.
State Senator Steve Johnson (R) said that means a supermarket can discount gasoline as a way to get more customers into the store to buy other items and increase their profits. But he said companies cannot discount everything they sell in order to lure customers away from other stores. He said he does not think stores raise prices on grocery items in order to make up for their gasoline discounts because they might risk losing customers to other stores.
I think competition is good for everybody, Johnson said.
But State Sen. John Morse (R) said there is not as much competition between big retailers in rural areas, and gasoline promotions there could hurt smaller, independent gas stations. He lost a bid to make the bill only apply to metro Denver, where he said there is a greater concentration of large retailers.
State Sen. Ken Kester (R) said Main Streets in his southeastern Colorado district have already lost a lot of small businesses because of large stores that have opened outside town, and this bill could make it even worse. You can't make up for what King Soopers does by selling peanuts, candy bars and pop, he said.
Before the ruling, King Soopers and Safeway offered discounts of up to 10-cents a gallon based on how much customers spent on groceries, but switched to offering straight 3-cent discounts to customers after the decision.
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