Woodman's to Modify Fuel Discount Rewards Program

JANESVILLE, Wis. -- The 11-store Woodman's Food Markets based here will alter its gasoline rebate program beginning next week following a court fight over whether the practice violated the state's minimum markup law.

Woodman's, which operates stores in Wisconsin and northern Illinois, will halt its program of discounting the price of gasoline by 3 cents a gallon for customers who show a Woodman's grocery receipt when they buy gas from the store, according to local published reports. Instead, drivers will get $1 off when they buy $30 of gas and show a $50 receipt for groceries.

An official from Wisconsin's Department of Agriculture, Trade and Consumer Protection said Woodman's change in policy was in response to a judge's determination that the grocer's practice violated the minimum markup law, a Depression-era law designed to keep large gasoline retailers from squeezing out small ones.

The same ruling, by then-Dane County Circuit Judge Gerald C. Nichol, also found that La Crosse-based Kwik Trip could not print $1-off gas coupons, the state official said.

The 3-cent discount came under scrutiny after Woodman's had sued Kwik Trip in 2000 over its $1-off coupons. In turn, Kwik Trip retaliated by saying the 3-cent discount violated the minimum markup law, and the judge ruled in June 2004 that both were illegal. By then, Kwik Trip had stopped printing the coupons.

The two sides settled in October 2005, before the court ruled on the size of damages. Two months after the judge determined the practices were illegal, Woodman's sued the Department of Agriculture, Trade and Consumer Protection, arguing that the administrative rule allowing Kwik Trip and others to give discounts to credit-card customers was illegal, too. Last January, a Dane County circuit judge ruled against Woodman's in that case.

Woodman's accepts only cash at its stores in an effort to keep prices down.

"With credit cards, you can get around the minimum markup law," Woodman's President Phil Woodman was quoted as saying. "With cash, you can't get around the minimum markup law. Rich people get discounts. The average guy on the street who pays with cash -- tough."

The minimum markup law requires that gas at the pump be at least 9.18 percent above the price at the terminal. Retailers can go below that markup to meet a competitor's price, however.
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