In this week’s issue of Seven Days I wrote about Skip Vallee, the CEO of RL Vallee Inc. — one of Vermont’s largest gas station chains. In the latest twist in the unfolding story about high gas prices in Vermont, Vallee purchased a former filing station in Plainfield, only to put it back on the market with restrictions on the deed that would forbid the property from being used as a gas station, convenience store or grocery store.
Some residents in Plainfield are crying foul, saying Vallee is just squashing potential competition for his other gas station up the road — and making it harder to attract a new owner in the process. Ask Vallee, and he’ll tell you it’s just business — a creative move to protect his company.
The back story — to cut to the chase — is that ever since U.S. Sen. Bernie Sanders (I-VT) took up the drumbeat on higher-than-average gas prices in northwestern Vermont in early July, Vallee and some of his colleagues have faced tough scrutiny for their pricing policies. Sanders says the Burlington area has a “non-competitive market” in which a few companies, RL Vallee included, set the prices. Vallee contends his business is competitive in every market in which it operates.
In the political undercurrents that pit Sanders against noted GOP player “Gasoline” Vallee, there’s been some inevitable sniping back and forth. Sanders’ office last week pushed out a press release that included information from superstore Costco saying that its Colchester warehouse, if allowed to build a gas station, would have offered gas at prices 19 cents lower than nearby competitors. (Vallee and another gas station owner are attempting to block the Costco gas station on largely environmental grounds.) From Sanders’ press release:
“We applaud your efforts to promote competition in the gasoline business in northern Vermont, which will lead to more rational and competitive pricing for your constituents and our members,” [Costco Executive Vice President Joe Portera] told Sanders.
Vallee’s detractors are quick to point out the irony in the noted Republican’s tactics of choice: Not only is he supposedly stifling competition, but he’s using environmental regulations to do so.
“What Skip Vallee and his friends are supposed to believe in is the value of competition,” Sanders told me on Monday morning. He said he’s not for or against Costco, but also noted that RL Vallee “isn’t exactly a mom and pop” operation.
Vallee can give as good as he gets: “With Costco, I am glad Bernie has finally found a multinational he likes,” he quipped in an email to Seven Days.
You can read the whole story (including more details about Vallee’s power play in Plainfield) here.
Illustration by Michael Tonn.
This article appears in Jul 25-31, 2012.
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I find it interesting that Costco can sell for 19 cents less but all owners of all gas stations only claim to make 3 cents profit. So is Costo selling at cost or are the corporations gouging us AND the owners of the stations?
Costco uses membership fees to subsidize prices. You’donly start realizing a savings on gas after 6 month of weekly fill ups. Gas distributors make wider margins on station owners who then are left with having little markup opportunity.
They are all screwing their neighbors and friends.
Article recently in the local paper here had two gas stations within a 10 min drive with prices at nearly $0.30 cheaper then the other gas stations around. These are small country stores. They aren’t losing money on gas…. so what are the guys tacking on an additional 30 cents a gallon doing? It’s a free market and market pressures drive it, but considering the great big ad signs there is a kind of unconscience collusion component. When Gas Station Owner A drives by his competitors station he says yup, same price, we are good. When Gas Station Owner B drives by A he says, yup same price we are good. They don’t care what they pay for it, what their customers think or what they are actually making, just so long their signs all read the same. It’s not like other products where a mark-up is x%.
And Mrs. Flagg, could you tell us again how Mr. Valle is a republican please. I’m not sure everyone caught it. Could you also point out all the other irrelevant facts in your article as well. I’m sure I missed some.
In Plainfield, its about a community trying to stay vital and being held
hostage by business as usual. Doesn’t matter what party you are, if
you ain’t got that dough, ray me, you don’t matter.
We have someone who’s trying to serve themself, making it hard to build
up our community. Valley says, “that’s business”. Well that easy for
someone born into wealth to say. There were two local businessmen at
the auction that put up a pretty penny only to be outbidded by
Valley because he had the dough to prevent the potential competition. The pitty is that one of the bidders wanted to develop a traditional general store that Plainfield needs. Now it just has the Anywhereville sugarmart that is making Vermont more and more unlike Vermont.
I
say it sucks for us that Maplefields is in Plainfield. From hearing
from other across the political spectrum at our local town meeting,
there’s a lot of similar sentiment. Community and local economy suffer
when business tries to stifle competition. That’s not free market,
that’s free for all. Or rather free for all who have and nothin’ for
those who don’t.
And this doesn’t seem like the Vermont way.
Proudly passing by Maplefields for years.
You guys don’t understand how costco works. It’s economies of scale. They can buy BILLIONS of dollars of gas at a time. Same as wal-mart versus the local mom and pop. Economies of scale people, plain and simple.