SCOTTSDALE, Ariz. – While the leaders of convenience store chains across the country converge on the sunny Arizona desert for a few days of education and recreation this week, the leadership of the National Association of Convenience Stores (NACS) is braced for several days of difficult decision-making. Later today and tomorrow, NACS’ Government Relations Committee and its Board of Directors will determine and make public the association’s plans regarding potential federal below-cost selling legislation.
In a meeting later today during the NACS Leadership Assembly, the association’s Government Relations Board Committee will review recommendations it received last week from a task force formed specifically to review the opportunities and challenges in supporting federal below-cost selling legislation, as well as recommendations from NACS’ Legislative and Motor Fuels Committees and its Committee of Councils on the matter. Tomorrow, the Government Relations Board Committee will present its recommendations on the matter to the NACS Board of Directors, which will determine whether or not the association will come down in support of federal below-cost legislation.
Faced with what could be considered one of the most difficult issues in its history, NACS has refused to release details of the recommendations presented to the Government Relations Board Committee Friday, though published reports indicated – not surprisingly – that the Motor Fuels Committee has recommended NACS support legislation. According to NACS Senior Vice President Lindsay Hutter, the association has chosen to keep the recommendations confidential until the Board of Directors meets to deliberate on them.
“Why aren’t we releasing them? There are two very important layers to go, which are the Government Relations Committee and the Board of Directors,” Hutter said. “The danger is that anyone who is observing this process getting just a piece of this puzzle would get a very incomplete picture of all the considerations.”
According to Hutter, as NACS represents both staunch supporters and bitter opponents of below-cost selling legislation, it has deliberated the subject at great lengths. “PMAA’s decision was basically unanimous because it represents one type of participant in the market,” she said, referring to the Petroleum Marketers Association of America’s ongoing efforts to amend the Petroleum Marketing Practices Act (PMPA) to take below-cost selling into account. “NACS represents many types of participants in the market. So the process, by definition of our membership, must be very thorough.”
In addition to determining whether a federal below-cost selling law would level the competitive playing field for all of its members, Hutter said NACS need also consider the cost of pushing such legislation.
“What are the financial considerations? That’s something I have not heard anyone in this industry talking about,” Hutter said “Advocates of below-cost [legislation] have expressed their enthusiasm for PMAA’s willingness to get out early and stake its position on this issue. Well, when Florida pursued its below-cost selling law, it cost the state association $750,000. And that’s one state. Louisiana fought a very gallant fight on below cost and Wal-Mart came in and had pockets that were so deep it was unimaginable. Now we’re at the federal level. To go forward with this type of a recommendation, [the board and committees] must be responsible to look at what it would cost to do this and what other initiatives will get compromised because we would need to apply resources here. That’s a whole other layer of analysis to consider.”
According to Hutter, the challenge of pushing federal below-cost legislation has increased in the wake of PMAA’s failed bid at including below-cost selling language in the federal Energy plan presented by Senate Majority Leader Tom Daschle (D-S.D.). In an 11th-hour move, the below-cost language was removed from the bill, which is currently under debate in Washington.
“PMAA went about their approach in a very stealth-like fashion, and it was a smart move on their part,” Hutter said, adding that as the energy debate moves to the House, it will become increasingly difficult to have a pricing measure brought back.
“The scope of the undertaking becomes much more enormous,” she said. “It’s always easier to be on top of the Hill, and have your language included in a bill that’s moving through the chamber of the Congress than it is trying to work uphill and get your language included.”
PMAA President Dan Gilligan could not be reached for comment this morning, however in an interview late last week, PMAA Vice President Holly Tuminello indicated the road ahead would, indeed, be more difficult, though she confirmed the association’s members have directed it to aggressively pursue federal below-cost legislation. “I think it will be a long road, but we’re in it for the long haul,” Tuminello said.
Should NACS decide to pursue federal below-cost legislation, it would also take an all-out approach, Hutter said. “At the end of the day, if it’s the right thing to do, you do it. You dedicate your staff to focus on this issue and you do it. It’s not a matter of the price tag being $500,000 or $1 million, if that’s what it is. The consideration is, based on how this landscape is changing, what are the resources we need to put behind it to be effective.”
