In the space of just two months, Kwik Trip has used Wisconsin’s so-called minimum markup law to file at least seven complaints against competitors. The La Crosse-based convenience store chain has repeatedly opposed efforts to repeal the minimum markup law, which dates back to the Great Depression and prohibits retailers from offering overly discounted prices to consumers.
The Federal Trade Commission has twice deemed Wisconsin’s anti-consumer savings law to be harmful to consumers and ineffective at propping up government-favored retailers.
“Kwik Trip supports the minimum mark-up law,” a corporate spokesman told a state legislative committee in 2003 when lawmakers mulled repealing the minimum markup law, formally called the “Unfair Sales Act.” A 2006 letter from the company to lawmakers declared, “Kwik Trip, Inc. strongly supports current law as it relates to the Unfair Sales Act.”
Indeed they do.
Records obtained from the state Department of Agriculture, Trade and Consumer Protection (DATCP), which is tasked with enforcing the law, show that between December 10, 2015 and January 26, 2016, Kwik Trip used the law to harass competitors by filing complaints alleging their fuel prices were to low, and they were offering consumers illegal good deals.
Competitors targeted by Kwik Trip range from Sam’s Club in Kenosha to Costco locations in Pewaukee, Pleasant Prairie, and New Berlin.
Each of the seven complaints was filed by Connie Breier, a petroleum coordinator employed by Kwik Trip. According to court records, Breier’s testimony was critical in absolving Kwik Trip of any wrongdoing when it was sued for offering overly low prices at gas stations in Prairie du Chien in the mid-2000s.
Breier’s reasons for filing the complaints against Kwik Trip competitors are spelled out in each filing. Her reasoning is elementary, bordering on the juvenile.
“No other competitors found this low in market,” Breier whined in a complaint filed against Costco in Pewaukee, which as selling gas for as low as $1.759 a gallon on December 10 of last year. A complaint against Sam’s Club alleges that, “Costco is also priced at $1.779, but it’s possible that Sam’s Club move down first. This is several cents below our actual delivered cost for many days.”
State law does not prohibit a retailer from selling something for a price that is below that of a competitor. It simply says that a good may not be sold for below acquisition cost and for some items, including fuel, a formula must be followed to calculate a minimum level of profit the state believes the retailer should make.
What Breier ignores in her complaints is the plausible fact that Sam’s Club and Costco may be able to obtain their wholesale stock of fuel at a price that is below that of Kwik Trip’s wholesale cost. For her to cite “our actual delivered cost” on behalf of Kwik Trip is a meaningless benchmark.
Unfortunately, under the Unfair Sales Act, there is no penalty for filing frivolous complaints. That means Breier and others can continue to use the law to harass competitors at the drop of a hat while facing no serious scrutiny for asserting flawed arguments.
Kwik Trip executives have contributed heavily to various campaigns, including the warchests of some lawmakers who have been instrumental in blocking legislation that would repeal the Unfair Sales Act.
Kwik Trip Unfair Sales Act Complaints: KwikTripGasPricesComplaints