Cigarette, Gasoline Price War Flares in Massachusetts
TAUNTON, Mass. -- A Hess-branded gas station on Route 44 here dropped the price of Marlboro cigarettes to below the published state minimum to compete with nearby Prestige Car Wash, which began selling gasoline at a discount a week earlier, according to a report by the Taunton Gazette.
Ronen Drory, co-owner of Prestige Car Wash & Detail Shop at 13 Cape Highway, is accusing the management of the Hess gas station at 23 Cape Highway of deceptive advertising, according to the report. Drory, whose business offers a 30-cent per-gallon discount for every $10 minimum car wash, in addition to selling gas for cash for as much as 20 cents less than the Hess station, claims the Hess next door is selling leading-brand cigarettes below the state's "minimum retail price" list.
Drory told the newspaper late last week the Hess station/convenience store should not have dropped its price for a pack of Marlboro Reds to $6.09 to compete with Prestige, which also had been selling them for $6.09 before tax. Drory said his Taunton car wash/detail shop, as well as his Brockton and Stoughton businesses, are exempt from any price restriction since he is not strictly a retailer.
The minimum allowed retail price for a box of Marlboro is $7.60 for chain stores and $7.71 for non-chain stores, according to the Massachusetts Department of Revenue's Filing Enforcement Bureau and Cigarette and Tobacco Excise Tax Unit, the newspaper reported.
On Friday, Hess dropped the price of Newport to $6.99 per pack compared to Prestige's $5.99 price. The DOR's minimum retail price for Newport is $7.50 for chain stores and $7.61 for non-chain stores.
Drory's manager, Nicole Teles, also claimed the Hess-branded station had been enticing customers into the store, only to tell them that there was a two-pack maximum. "I never knew there was a limit before," Teles said.
But the manager of the Hess station responded by telling the newspaper the other retailer was lying. "The bottom line is there's no limit: If someone wants to buy 30 or 40 packs they can," said Mike, who declined to reveal his last name to the newspaper.
He also told the newspaper Drory had come into the store stating he wanted to "buy everything," a request he says he was not willing to accommodate. "He wanted every Marlboro so we wouldn't have anything," the manager told the newspaper. "He's upset because we matched his price."
The Hess manager told the Taunton Gazette he was advised by his supervisor to reduce the price of Newport from $7.50 to $6.99. The manager dismissed Drory's claim that Prestige qualifies as a wholesale operation. "There's no sign posted that it's wholesale -- this is the retail world," he was quoted by the paper as saying.
Other c-stores were found to be selling cigarettes below the state minimum. Tom Clark, co-owner of Park News said that none of the independently owned stores in the area are in a position to do otherwise. The competition, he said, is simply too keen. "Everybody does it. It's no big deal," Clark told the newspaper.
Copal Awad, who owns Taunton Service Center at 48 Broadway, which includes gas pumps, auto repair and a convenience store stocked with beer and wine, said he's not shocked to hear that other independents are selling cigarettes at bargain prices. "It doesn't surprise me at all," Awad said. "This is a working class community."
He also had something to say about the battle brewing between the two Route 44 competitors. "If I'm crazy enough to lose money on it, then I shouldn't be in business," Awad told the newspaper.