DENVER-
State senators on Tuesday gave initial backing to a measure that allows stores to offer deeper gas discounts to their customers despite fears it might squeeze independent gas stations out of business.
Last year, a federal court jury determined that King Soopers’ promotion in Montrose violated a state law that prohibits selling items below cost, prompting lawmakers to introduce a measure (House Bill 1208) to change the law.
Right now, companies can violate the law by discounting items in an attempt to hurt their competition. The bill would only make it illegal if companies use discounts to monopolize a market.
Sen. Steve Johnson, R-Fort Collins, said that means a supermarket can discount gas as a way to get more customers into the store to buy other items and increase their profits. But he said companies can’t discount everything they sell in order to lure customers away from other stores.
He said he doesn’t think stores raise prices on grocery items in order to make up for their gas discounts because they might risk losing customers to other stores.
“I think competition is good for everybody,” Johnson said.
But Sen. John Morse, R-Colorado Springs, said there isn’t as much competition between big retailers in rural areas and gas promotions there could hurt smaller, independent gas stations. He lost a bid to make the bill only apply to metro Denver, where he said there is a greater concentration of large retailers.
Sen. Ken Kester, R-Las Animas, said Main Streets in his southeastern Colorado district have already lost a lot of small businesses because of large stores that have opened outside town and this bill could make it even worse.
“You can’t make up for what King Soopers does by selling peanuts, candy bars and pop,” Kester said.
Before the ruling, King Soopers and Safeway offered discounts of up to 10-cents a gallon based on how much customers spent on groceries but switched to offering straight 3-cent discounts to customers after the decision.
King Soopers handed out flyers to its customers last weekend asking them to support the bill. A spokesman for its parent company, Kroger, didn’t return a telephone call seeking comment.
In a written statement, Safeway spokeswoman Kris Staaf said the company has heard from thousands of customers who want the discounts resumed.
“Obviously, we’re in the business of listening to our customers, and if and when the bill becomes law, we would certainly re-examine these very popular customer promotions,” she said. She declined further comment.
The Senate must vote on the measure again before sending it to the governor.
