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MADISON, Wis. -- Kwik Trip has gained some ground for its gas discount program in Wisconsin, as it won a lawsuit against the Woodman's grocery store, claiming that its discount program violated the state's minimum markup law, reported The Associated Press.
According to the report, the state law requires that gas stations must raise the price of gasoline at least 9.8 percent above wholesale prices. The discount plan that Woodman's offered customers a gas price below the minimum percentage.
The grocer's program discounted customers' price per gallon by 3 cents when they purchased food from the stores at the same time.
"Gas prices are a sensitive issue, especially when they're rising as rapidly as they are. But what I understand from retailers, margins are very thin," said Jeremy McPherson, director of the Bureau of Business Trade Practices. He added that the law is made to prevent large gas stations from putting the smaller ones out of business.
According to Woodman's, the law has created unfair competition. "There are lots of lawsuits making it bad for small business in Wisconsin. A law made to help gas stations is now helping only the big ones," said Clint Woodman, vice president of Woodman's to the AP.
The AP reports that there is an exception to the law; stations can break the minimum price as long as it will match the price of another station. An example is Kwik Trip, whose 3 cents a gallon savings are offered on credit card purchases. This discount is allowed because it is from the bank or credit card company, rather than the station itself.
If Woodman's were to adopt a program with the same terms and conditions as Kwik Trip's credit card program, it would be permitted, the report stated.
As a result of the ruling, Woodman's has counter-sued the minimum markup law, stating that it is unfair, the report stated.