Colorado retailers could lure customers with below-cost gasoline and prescription drugs under a bill approved by the Senate on Tuesday over objections it would undercut small businesses.
The legislation, which calls for an update to the 1937 Unfair Practices Act, follows a Montrose jury decision last fall that said King Soopers and City Market illegally sold gas too cheaply.
After the trial, Wal-Mart and Target announced a discount-drug program that lowered the price of some generic prescriptions to $4. But the chains said they would charge $9 for certain drugs – more than double their price in many other states – because of Colorado law.
The legislation would keep government from intervening in business strategies to improve market share and customer loyalty, said Sen. Steve Johnson, the Fort Collins Republican who sponsored the bill.
“Should we have the heavy hand of government coming in and restricting that competition?” he asked.
But Sen. John Morse, D-Colorado Springs, said the legislation favors big business, sanctions “unfair competition” and would lead to financial ruin for mom-and-pop stores that can’t compete with fuel prices at Costco or King Soopers.
“We’re starving our small towns, one main street at a time,” said Morse, who tried to gut the bill with a series of defeated amendments.
The measure, drafted by Attorney General John Suthers’ office, has passed the House and needs a final vote in the Senate before it heads to Gov. Bill Ritter.
Senators against House Bill 1208 said retailers who lure customers with cheap gas, then mark up groceries to pay for the gimmick, are deceptive.
“It’s a scam – ‘We’ll trick them into thinking they’re getting something for nothing,”‘ said Sen. Ken Gordon, D-Denver.
Roy Turner, executive vice president of the Colorado Wyoming Petroleum Marketers and Convenience Store Association, called Tuesday’s vote disappointing.
“We’re second- and third- generation businesses in Colorado, and they’re going to support an out-of-state multibillion company trying to put us out of business?” he said.
Staff writer Jennifer Brown can be reached at 303-954-1593 or jenbrown@denverpost.com.
