MADISON, Wis. -- Starting August 1, Woodman's Food Markets Inc. will no longer be able to offer a three-cents-a-gallon discount on gasoline with a food purchase, according to a report by WISC-TV.
In a lawsuit filed by Lacrosse, Wis.-based convenience retailer Kwik Trip, the judge found that Woodman's offer violates the state's minimum markup law, said the report. Woodman's sells fuel at all of its 10 supermarkets.
This law requires gas stations to mark up fuel at least 9.8% above wholesale prices. The added three-cents-a-gallon [image-nocss] discount puts Woodman's below that mark.
Woodman's said the law amounts to unfair competition. There are lots of lawsuits making it bad for small business in Wisconsin, said Clint Woodman, vice president of Janesville, Wis.-based Woodman's. A law made to help gas stations is now helping only the big ones.
Jeremy McPherson, director of the Bureau of Business Trade Practices, said that is not the case. Gas price is a sensitive issue, especially when they're rising as rapidly as they are. But what I understand from retailers, margins are very thin, he told the news outlet.
McPherson said the law is meant to prevent big stations from driving smaller ones out of business.
Currently, many stations are below minimum markup because there is an exception in the law that allows stations to break it as long as they're doing it to match the price of another station, the report said. Kwik Trip, for example, is allowed to have a credit card rebate program. It offers three cents a gallon off gasoline for using the card. Woodman's is allowed to match that, but it would have to have the same terms and conditions. Credit card discounts are allowed because they typically come from the bank or credit card company rather than the station itself, the report said.
Woodman's has counter-sued, saying that the minimum markup law is unfair, the report added.
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