Trouble on the Western Slope

Parish Oil, Ray Moore claim grocer is selling below cost

MONTROSE, Colo. -- Two gas station operators in Colorado are fuming about grocery stores they claim are selling gasoline below cost, reported the Denver Post.

The fight in Colorado is centered on the Western Slope town of Montrose and could affect fuel-pricing practices elsewhere in the state. Everyone is watching that to see how the court will rule, Roy Turner, executive vice president of the Colorado-Wyoming Petroleum Marketers Association, told the newspaper.

The state's 68-year-old below-cost selling law is intended to protect [image-nocss] small businesses from unscrupulous practices of larger rivals; 23 other states have laws similar to Colorado's Unfair Practices Act, said the report.

A court case in Oklahoma ended with a ruling against a Sam's Club for selling gas discounted below its cost.

The case in Montrose involves Parish Oil Co. and Ray Moore Tire & Petroleum, the report said. They claim in a lawsuit filed in U.S. District Court in Denver that the two City Market grocery stores have consistently sold gasoline below their wholesale costs. They are selling below cost to entice people to do their one-stop shopping, Turner told the paper. A number of our members are not able to compete when they are selling below buying prices. Some of them have gone out of business.

Parish Oil, which is a wholesale fuel distributor that sells gasoline at Humdinger's and other Phillips and Conoco stations, and Ray Moore Tire & Petroleum Service Inc., which shut down its gasoline pumps on Nov. 12, 2004, filed the lawsuit against Kroger, City Market's parent company, added a report by The Montrose Daily Press. Bassman said Ray Moore's Montrose station went out of business in March. Parish operates two stations in Montrose, as well as a wholesale operation, The Post said.

Last week, the case went before Judge Robert Blackburn, who told both sides to submit more information before he rules on whether City Market must stop its discounted sales.

Trail Daugherty, a spokesperson for Kroger and City Market, said that the company does not comment on cases in litigation.

Bob Bassman, an attorney representing Parish Oil and Ray Moore, told the paper that City Market argued in court that its gasoline discounts were part of an incentive program designed to bring in grocery shoppers. In recent years, traditional grocers have had to compete with discount stores such as Costco that sell groceries and gasoline.

Turner said the marketers association, which represents 180 gasoline wholesalers, retailers and dealers in Colorado and Wyoming, is helping to fund the suit. It wants clarification on the section of the Unfair Practices Act dealing with gasoline sales, said the report.

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