Below-Cost Showdown Brews in Wisconsin

RACINE, Wis. -- Fuel prices in Wisconsin are dropping, prompting complaints from convenience store and petroleum marketers that some big-box operators may not be playing by the rules.

The price for a gallon of regular unleaded gasoline was $1.039 in La Crosse and $1.049 at several other gasoline stations, including Kwik Trip convenience stores in La Crosse, Onalaska, Wis., and La Crescent, Minn., according to The La Crosse (Wis.) Tribune.

Independent owners and trade and consumer protection officials fear the consequences. They say smaller operators cannot afford to be losing money for long, and should they be forced to close, prices could skyrocket in the long run. It also is illegal to sell gasoline below cost under the state's Unfair Sales Act, unless a competitor already has lowered its prices.

It currently costs about $1.11 to bring a gallon of gasoline to pumps in Wisconsin, said Bill Barlett, executive vice president of the Petroleum Marketers Association of Wisconsin. That accounts for a wholesale price of about 60 cents per gallon, state and federal taxes, and inspection and transportation fees.

"Gas is not a money-making deal, but I need enough to cover the expenses," said Julie Yahnke, who owns Holmen Quik Stop. "I won't sell it below cost. I know I'll lose customers, but why should I give them a dime to walk in the store?"

Yahnke is one several gas station owners who have filed complaints with the Wisconsin Department of Agriculture, Trade and Consumer Protection against other gasoline stations. She filed the first complaint last week when a nearby Kwik Trip dropped its prices to $1.109, and she filed a second one yesterday when prices fell again, the report said. Yahnke is charging $1.159 for a gallon of unleaded gasoline, the report said.

Businesses found to be in the wrong can be fined between $50 and $500 for a first violation and between $200 and $2,500 for subsequent offenses. Rival gas stations that suffered because of illegal pricing also can file private lawsuits for compensation.
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