Buc-ee’s Sued for Below-Cost Pricing in Alabama

Oasis Travel Center accuses chain of violating state’s motor fuel marketing act
Photograph: Shutterstock

ROBERTSDALE, Ala. -- After opening its first location outside Texas this past January, Buc-ee’s has been sued by an Alabama retailer accusing it of violating the state's below-cost pricing law.

Buc-ee’s opened its first Alabama store on Jan. 21 in Robertsdale. The site features a 50,000-square-foot c-store with 124 fueling positions, and is reportedly the biggest c-store in the state. Buc-ee’s Ltd., Lake Jackson, Texas, which has 35 sites, also plans to open sites in Daytona and Fort Myers, Fla., this summer.

"Buc-ee’s has always provided our customers with the best experience on the highway,  from the world’s cleanest bathrooms, to great food," Jeff Nadalo, general counsel for Buc-ee's, told CSP Daily News. "Part of this experience includes high-quality fuels, priced fairly and competitively, and we will always strive to be our customers’ choice in the markets where we operate."

Buc-ee's has placed first for the past two years in a row in CSP and Oil Price Information Service's (OPIS) Fuels 50 ranking of the most effective fuel brands. In 2018, it priced its gasoline more than 8 CPG below its market competition, according to OPIS.

Oasis Travel Center LLC, owned by Karen Brown and Roger Livengood, has operated one Marathon-branded location in Robertsdale, Ala., for more than 20 years, according to the court documents.

In the lawsuit, filed on Feb. 1 in the U.S. District Court for the Southern District of Alabama, Oasis alleged that Buc-ee's has sold gasoline and diesel at retail prices lower than the Alabama Motor Fuel Marketing Act (AMFMA) allows. "These offers to sell and sales were made with the intent and had the effect of injuring competitors, to include the plaintiff," Oasis' attorneys said in the court documents.

"These illegal pricing practices have already damaged [Oasis'] business, and cause irreparable harm, and if these violations are allowed to continue, [Buc-ee's] will cause and continue to cause irreparable harm to [Oasis] and other competitors," they said.

On Jan. 21, Buc-ee's posted a price of $1.79 cents per gallon (CPG) for regular unleaded gasoline, the court documents show. It moved the price between $1.79 and $1.87 through Jan. 31.

"Since opening, [Buc-ee's] has sold all grades of gasoline and diesel fuel below cost under the act," the plaintiff said. On Jan. 31, Buc-ee’s sold non-ethanol Plus gasoline (89 octane) for $1.93 CPG. "This price is dramatically below cost as defined by the AMFMA. … [Buc-ee's] violations of the act are blatant and aggressive and continue," the plaintiff said.

The plaintiff charges that these actions violate the below-cost pricing provisions in the AMFMA. The lawsuit cites a passage in the act that considers it "unlawful for any person engaged in commerce in [Alabama] to sell motor fuel below cost, or to sell or offer to sell it at a price lower than the seller charges other persons on the same day and on the same level of distribution, within the same market area, where the effect is to injure competition.”

Oasis seeks temporary, preliminary and permanent injunctive relief, as well as attorney's fees.

"Buc-ee's is very unique for Alabama," Bart Fletcher, president of the Petroleum & Convenience Marketers of Alabama (PCMA), told CSP Daily News. "We don't have anything remotely close to that anywhere else in the state. They do a good job of marketing, and they do have a reputation from Texas. So when they opened, they did a lot of business. But since the mid-1980, we've had the [AMFMA], which is a below-cost sales law. Buc-ee's was aware of that. They are in clear violation of the law. It has been tested in Alabama state and federal court and found to be constitutional. They got sued."

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