RICHMOND, Va. -- Virginia’s House of Delegates Commerce and Labor Committee killed legislation earlier this week that would have prohibited gasoline retailers from selling fuel below cost, says the Richmond, Va., Times-Dispatch. Lawmakers voted 12 to 9 against endorsing the proposal, already approved by the state Senate.
Independent gasoline operators argued that gasoline hypermarketers such as Wal-Mart--as well as convenience store operators such as Sheetz Inc. and Wawa Inc., which have expanded southward into Virginia--have cut prices to eliminate competition. The two companies operate about 7 percent of the approximately 4,000 gasoline stations in Virginia. The legislation’s proponents believe that the bill could have helped small, independent gasoline operators survive against these and other chains that enter markets and then undercut prices until they gain market share.
Mike Cortez, vice president and chief legal counsel for Altoona, Pa.-based Sheetz, says that his company tries to bring gasoline to market as cheaply and inexpensively as possible. "Our goal is to make money at every gas station," he told the newspaper.
Opponents argued that the proposal was not necessary because federal and state antitrust laws already protect businesses, and that similar legislation in other states only caused pump prices to rise. "Before we make fundamental changes in public policy, we should see if existing laws attempt to address this," said Delegate Robert F. McDonnell (R) (pictured), who made the motion to kill the bill.
An official from the Federal Trade Commission wrote McDonnell to say the bill "is unnecessary and has a significant potential to be anticompetitive."
But Del. Clifton A. Woodrum (D) said ensuring enforcement of antitrust laws is beyond the financial reach of most small businesses. The legislation would have simplified the procedure to file a complaint. "This is a remedy for small businesses," Woodrum said.
Sen. Charles R. Hawkins (R), who sponsored the bill, said he was disappointed in its defeat. "This is a bill that keeps competition at the pump."
Del. James K. O’Brien (R) asked whether lawmakers were going to enact legislation every time a small merchant is hurt by a larger retailer. "It sends a terrible signal to what we will do in Virginia in the future," O’Brien said. "This bill represents the greatest government intrusion."
