DENVER -- Colorado Governor Bill Ritter signed House Bill 1208 on Monday. The measure will allow businesses in Colorado to sell gasoline and other products below cost as part of package promotions, and for other purposes not in violation of antitrust laws.
Under the bill, which modifies the 1937 Unfair Practices Act that prevented the sale of fuel at below-cost prices, retailers in the state can once again offer promotions for discount gasoline.
According to an Associated Press report, Safeway Inc. immediately said it would reintroduce [image-nocss] its fuel discount program across Colorado, allowing Club Card customers who buy at least $50 in groceries in one trip to get a discount of 10 cents per gallon of gasoline, the report said. With fuel prices on the rise, the timing could not have been better, and customers recognize and appreciate the value we're offering, said Safeway spokesperson Kris Staaf. She said drivers could use the program as early as this past Monday evening.
King Soopers also is reinstating its program, which offers 10-cents-per-gallon savings for every $100 customers accumulate in grocery purchases using their SooperCards, the report added.
Our customers were among the thousands of voters who contacted their state legislators urging them to change this outdated,70-year-old law, said Russ Dispense, president of King Soopers. We are extremely pleased that their voices were heard, and we are excited about being able to once again offer them a very real savings on their fuel purchases.
Both grocery chains had ended their fuel discounts after a judge ruled last year in a lawsuit filed by two Montrose, Colo., gasoline distributors. The judge ruled the discounts were illegal under existing state law, which barred retailers from selling anything below cost if it hurt competitors or destroyed competition. Under the new law, the discounts would be legal as long as they are part of a package of promotions and not intended to set up a monopoly.
HB 1208 overcame a significant challenge after the State Senate amended the bill to preclude smaller counties from gasoline discounts. The House rejected the Senate amendment, and the original measure later passed both chambers.
Colorado Attorney General John Suthers praised the passage of HB 1208. This is a good day for Colorado consumers, said Suthers. This law brings a 70-year old statute in-line with modern market realities. House Bill 1208 opens the market to greater free trade and higher levels of competition, resulting in cheaper gas and other commodities for the citizens of this state.
The AG concluded, Now that this bill has become law, the Unfair Practices Act can again serve its intended purposeto protect competition while, at the same time, prohibiting any intent to monopolize. The bottom line is that this statute will allow Coloradans to benefit fully from competitive forces in the marketplace.
State Representative Cheri Jahn (D), the bill's co-sponsor, said, One thing I learned in carrying this legislation is that if the prices on goods are too high, it is considered gouging; but if the prices are too low, it is considered predatory; and if the prices are aligned with the competition it is considered collusion. I just know that gas wars are good for consumers. Retailers who offer good deals should be rewarded in the market, not be penalized in the courtroom.
Roy Turner, executive vice president of the Colorado Wyoming Petroleum Marketers & Convenience Store Association, said the measure could put smaller retailers out of business. It allows these billion-dollar corporations [such as Safeway and other supermarket and hypermarket chains] to come in and price as far below cost as they want on any single item or service, he told the Rocky Mountain News.
Evan Dreyer, a spokesperson for Ritter, said the governor believes the new law contains adequate safeguards to protect small retailers. He will be watching very, very closely to make sure that if there are any irregularities or problems we will act quickly to reopen their issue, Dreyer told the newspaper.
Turneralso told CSP Daily News, "It was a very disappointing day for all Colorado-owned businesses, not just the gasoline retailers, as the bill effects every business. The legislature and the Governor supported out-of-state billion-dollar companies over Colorado-owned businesses. Colorado has supply problems with stations out of gasoline, but the legislature passed a bill to encourage selling it below cost.We may have lost this battle, but will bring this back every year until we pass a new law giving marketers protection against below-cost selling."
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