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The following is being distributed at the request of Dennis Browne, Q.C.: Price wars may not benefit consumers in the long run Consumer advocate, Dennis Browne, appointed by the province to study variations in gasoline pricing in Newfoundland and Labrador advises consumers that price wars, as recently seen in Conception Harbour can be detrimental to the consumer in the long run. "While there is an initial savings for the individual, that bargain may come with an additional price. The real impact of such price reductions on the marketplace must be examined." Browne stated: "Price wars are usually waged between the major oil companies. These companies have the financial resources to support their own retailers during a price war. However, independent retailers have no such resources. Independent retailers, therefore, are placed in financial jeopardy because of their inability to match falling gasoline prices. In the long term these independent retailers could be forced out of the market, thus leaving the market to the larger oil companies. "Price wars also have a chilling effect on the entry of independent retailers into the market. Consumers would be better served if more independents were to enter the market to ensure true competition. Independents help to ensure competitive pricing practices." The consumer advocate anticipates making a recommendation to government concerning the effects of price wars on the Newfoundland consumer. Contact:
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