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Regional Report: The Wars of the West

If you're looking for guideposts to a land of high moral principles, look to Montana.

There, the state legislature passed an anti-meth bill that effectively shuts out every c-store in the state from selling products containing pseudoephedrine -- but says, McKee Anderson, executive director of the Montana Food Distribution Association, "We did not oppose it."

Instead, the Association remained on the sidelines, "because we felt the law was in the best interests of the state, and we didn't want to stand in the way of its enactment. We chose to be part of the solution to the problem, and only one member of our 402-member association objected to our position."

The law mandates the storing of ephedrine products behind pharmacy counters, and since c-stores rarely have a pharmacy, Montana c-stores will be forced to give up the substantial revenue generated by such products.

And there are no exceptions; some states permit stores to carry ephedrine products on open shelves, if they're in liquid or gel form, or in small, single-dose packets. Not Montana.

But Montana is a rural state, and shoppers in need of a cold remedy or a cough medicine will be forced to drive miles to find a pharmacy, when a c-store may be close by. What then?

"That issue will have to be resolved by the public," declared Anderson. "If there is an outcry to change the law, enabling us to carry ephedrine products, we'll be glad to comply. But it will have to come from the people at large. We're not going to lobby for it."

"In New Mexico," says Gene Valdez, executive director of the New Mexico Grocers Association (NMGA), "we're totally in favor of DWI regulations that help keep offenders off the highways. But we're also against putting cashiers and other store employees in danger of committing a Fourth Degree felony if they inadvertently sell a banned product to an offender or a minor.”

What's on Valdez's mind is the possibility of a state regulation requiring stores to puchase magnetic detection equipment that can read a shopper's drivers license or I.D. for age and other vital information such as previous DWI offenses. Store employees will then be able to make the right decisions, but the machines cost $600 or more so the NMGA will ask the state help pay for them.

"Six hundred dollars is a lot for a small business to spend," says Valdez, "and since everyone benefits from the use of the machines, we feel it's fair for everyone to share in their costs."

The bill has a good chance of becoming law, says Valdez, but he's not certain that the subsidy for the machine will be part of it.

Roy Turner, executive vice president of the Colorado/Wyoming Petroleum Marketers and Convenience Store Association, notes that "It's bad enough big-box retailers like Wal-Mart often sell gas as a loss-leader to build traffic, making it difficult for the small retailer to compete, but now regular supermarkets like Krogers are getting into the act. They're putting pumps out front to lure buyers away from traditional c-store/gas stations, and they're doing it not only with lower prices, but as part of their rewards program: 'Spend $50 inside and get 15 cents off a gallon outside.' "

Turner and his Association, however, are fighting back. "Colorado has a law against selling gas below cost," notes Turner, "so two of our members, Parish Petroleum and Ray Moore Tire and Petroleum, both of Montrose, Colorado, are taking Krogers to court. We're expecting a jury trial near the end of the year."

Representing Parish and Moore is the Washington DC law firm of Bassman Mitchell and Alfano, advocates for petroleum marketers for over two-and-a-half decades.

"It's too early to predict whether Krogers will settle out of court," said founding partner Bob Bassman, "but either way we're ready to go to trial and we're optimistic that we will obtain a favorable judgment. Krogers may be one of the largest supermarket chains in the country, but that doesn't give it the right to step outside the law."

In California the spirit of Prohibition lingers on in the form of a new regulatory threat by local governments over retailers selling alcoholic beverages.

"After Prohibition was repealed in 1933," says Paul A. Smith, vice president of government relations for the California Grocers Association (CGA), "regulations governing alcoholic beverages came primarily from state regulators. But starting in the early '90s, municipalities began trying to impose their own local rules on licensees. It started out with license conditions such as no single container sales or no sales after 11:00 pm.

“Now, we've moved to a new level -- local governments want to attach the alcoholic beverage license to conditional-use permits for things such as requiring fences around parking lots or special lighting and landscaping. All of these local conditions have the dramatic effect of devaluing a license and its operation."

Today, a local government in California can impose license restrictions on a new licensee, primarily when a retail outlet is being constructed. Local governments can also petition state regulators to impose license restrictions when there's a license transfer. For long-time retail licensees, however, local governments have few, if any, powers to impose restrictions, leaving all authority with state regulators.

But that hasn't stopped them from trying.

"We were able to fight off local governments most recently by defeating a bill in July that would have given them greater regulatory powers. But I expect retailers will face this threat for some time, because suggesting that alcoholic beverage licensees 'police' their immediate surroundings is an easy way for a local official to make a name for himself in the community,” observed CGA's Smith.

"The best way for retailers to control the situation, therefore, is to maintain a dialogue with local governments so that locals understand the dynamics we operate under. Until we can explain our case, local governments will continue to see retailers as fair game for regulations," concluded Smith.

Finally, speaking of California, we note Gore Vidal's trenchant observation in a moment of elevated self-discovery: "Every time a friend succeeds,” he said, “a little something in me dies."

He could have been talking about California, because, although many won't admit it, everyone envies The Golden State. Every perfect orange generates a twinge of envy.

So when events conspire to give the Starlet State a slap, does the opposite occur? Do we empathize? Or do we revel in the moment?

Test yourself.

"There was an accident at the Chevron refinery in El Segundo," reports Jay McKeeman, government relations director of the California Independent Petroleum Marketers Association, "which caused severe supply problems throughout the state, including some spot outages, leading to historic highs in diesel prices.

"The problem," says McKeeman, "is that California requires unique fuel formulas to satisfy state air quality requirements, so we can't just get 'off the shelf' petroleum products from elsewhere. We have to wait until out-of-state refineries ramp up to produce CARB-compliant diesel, and then we have to wait again for it to be delivered. We're at the mercy of a captive market, so all we can do is wait."

Everyone wishes them well, of course, and we assume the Gore Vidal conceit doesn't at all apply…don't we?
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