"We can't compete with businesses that are essentially selling fuel at a loss," said Michael Wood, representing Wilsons. "[image-nocss] The loss leader to get people into the grocery store is not something many of the retailers can compete with."
Wood said Wilsons favors competition, but on a level playing field. Wilsons "shouldn't be put in a position where it is competing with one hand tied behind its back because it doesn't have access to the cross-merchandiser's business where it can put the cost of the promotion," he said to the board, according to the newspaper. "The costs are paid by somebody. They are either paid by the consumer directly or indirectly through fuel purchases or cross-merchandising."
For two days this week, a three-member review board tribunal has been hearing evidence into whether the Dexter government should continue to allow gas promotions or eliminate them, the report said.
The board concluded its hearings Wednesday and reserved its decision, the report added.
Warren Maynard, Ultramar's regional manager for Atlantic Canada, said some of the discounts offered exceed the margin of four to six cents a liter guaranteed to gas stations. "We strongly believe that the total value provided to the customers must be compared to the approved dealer margin," he said. "To ignore that is really threatening the effectiveness of promotions overall."
Meanwhile, lawyers for Irving Oil and Sobeys, which have teamed up to offer gasoline discounts of up to five cents a liter for drivers who buy a certain amount of groceries, urged the board to tell the government to get out of regulating gas promotions. "Irving Oil does not believe that any particular limits on promotional activities are required at this time," said Halifax lawyer David MacDougall, representing Irving Oil Marketing, according to the paper.
In New Brunswick, shoppers who spend more than $250 on groceries at Sobeys can receive gasoline coupons worth nine cents a liter, Irving Oil said.
MacDougall advised the board not to give Nova Scotia drivers even more incentive to fill up in New Brunswick, where gasoline is generally cheaper. The board will hold hearings in Amherst next week about gasoline pricing near the border, said the report.
Irving Oil hired a polling company to conduct a study on gasoline promotions and found that 82% of Nova Scotians had taken advantage of these discount programs in the previous month, MacDougall said. He also said discount promotions have not hurt rural stations.
Sobeys lawyer Rob Grant described the hearing as "curious" with a lot of "shadowboxing" going on in the hearing room, said the report. "This is a highly competitive industry where competitive advantages are carefully protected," he said. "It's interesting that all the major brands and major participants support competition, and they know they can win or lose in a competitive market based on how well they can attract customers."
Promotions should be permitted and should not be regulated, Grant said.
Gasoline-price regulation was introduced in Nova Scotia in July 2006, and Service Nova Scotia has been regulating discount promotions on a temporary basis, the report said. Last October, the Dexter government asked the Utility & Review Board to hold public hearings into gasoline discounts and then make recommendations to the government.
The province is expected to release its policy on gasoline promotions by March 31 after receiving the board's recommendations, the Chronicle Herald said.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.