GAO Asked to Study Hypermarkets

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GAO Asked to Study Hypermarkets

WASHINGTON, D.C. -- While the General Accounting Office, the nonpartisan investigative arm of the Senate, investigates the impact oil mergers have had on competition, a senator has requested that the GAO include hypermarkets in that study.

At the request of the Petroleum Marketers Association of America (PMAA), Sen. Mary Landrieu (D-La.) asked the GAO to consider the effect hypermarkets have had on traditional marketers and retailers. The request comes as some hypermarketers, most notably Wal-Mart Stores Inc., have been accused of retailing below wholesale costs to drive out traditional operators.

"Large 'big-box' multi-product retailers may be using gasoline as a loss leader in localized markets," Landrieu wrote to GAO, according to the PMAA web site. "We would like GAO to examine the effect these retailers have had, and could have in the future, on competition and gas prices. Commonly when these big box retailers enter a market with gasoline, they initially retail gasoline to the consumer below their cost. This practice has already severely reduced competition in smaller and rural markets, which long-term could mean higher prices for the consumers in these markets.".

PMAA Vice President Holly Tuminello said the GAO report on competition would be incomplete by not including hypermarkets. "Including hypermarkets in GAO's investigation of competition in gasoline markets should shed some light on the potential long-term damage to competition," she said. "The data should provide PMAA with more factual statistics to advance our efforts to promote fair competition."

GAO's original investigation was undertaken at the request from Senator Carl Levin (D-Mich.). The study is expected to be completed by next March.