L/rain
36°
L/rain
Hi 40° | Lo 24°

Concord oil dealer sues Rymes for low prices

Rymes Propane & Oil has been offering its Pembroke, Epsom and Concord customers a deep discount on heating oil since August, saying it’s a way to celebrate 20 years in the area. But according to a federal lawsuit filed by Concord oil dealer Johnny Prescott & Son, Rymes’s real purpose is to put him and another local rival out of business.

Tom Prescott, president of the company his father started in 1940, is suing Rymes on several counts, including discriminatory pricing, illegal monopoly and violation of the consumer protection act. Prescott, who alleges Rymes is retaliating against him, is seeking legal fees and enhanced damages for lost profits and customers.

“I’m not going to sit back and let someone abuse us,” Prescott, 60, said yesterday. “My father worked hard to set up this business. I take it personally.”

Prescott alleges in the lawsuit that Rymes Vice President John Rymes threatened the price war in a July telephone call.

According to the lawsuit, Rymes confronted Prescott during the call for helping a small Epsom oil company get into the propane business. Prescott confirmed he was helping Davis Fuels of Epsom add propane to its offerings by letting Davis store propane at Prescott’s Concord station because the company does not have its own storage facility.

Prescott alleges that Rymes was upset about that because Davis Fuels had allegedly taken one of his residential customers, according to the lawsuit.

“Game on, Tom,” Rymes said to Prescott, according to the lawsuit. “I will be selling heating oil in the Concord Bow area for cost so you won’t make any money this year.”

Two weeks later, Rymes began offering Concord, Pembroke and Epsom area customers heating oil at $2.99 a gallon if they were paying cash, according to the lawsuit. He advertised the low rate at Epsom Old Home Days by placing fliers on car windshields, said Prescott and his lawyer, Biron Bedard of Ransmeier & Spellman.

“I couldn’t even buy it for that,” Prescott said yesterday.

Rymes’s prices for Concord and Epsom, where Prescott and Davis do much of their business, yesterday remained lower than the other areas the company delivers to. Rymes’s cash customers in Concord, Epsom, Bow and Pembroke were offered oil at $3.11 a gallon. Rymes’s customers in Hopkinton, Warner and elsewhere were being charged $3.41 a gallon, according to a Rymes customer service representative.

Prescott and Davis were both charging $3.39 a gallon for heating oil yesterday.

Rymes has not had time to respond to the lawsuit, which was filed Wednesday, but he said yesterday he never made the comments Prescott alleges. He also said Prescott is mischaracterizing his pricing.

“Over the last 20 years, we’ve built a pretty impressive purchasing structure as well as storage capacity throughout the state of New Hampshire,” he said. The company has 10 locations in the state. “We are able to acquire product probably lower than a lot of our competitors. I think it’s a good idea that if we can acquire the product for less, to sell the product for less.”

Rymes said the company’s anniversary sale price is not an unusual business strategy. “It’s like an anniversary sale for being there for 20 years,” he said of the Pembroke office. “It’s to not only thank our current customers but to offer it to our new customers.”

James Boffetti, chief of the attorney general’s consumer protection and antitrust bureau, said predatory pricing allegations can be hard to prove. He doesn’t expect his office to be involved in investigating Prescott’s lawsuit, but it has reviewed antitrust allegations in other cases, namely hospital mergers.

“If a company was attempting to limit competition, that would be a concern,” said Boffetti. “But the whole key is, ‘What is unfair competition or deceptive business practices?’ This (requires) careful and exact analysis by economists and people who are familiar with the market. It takes a lot of study and review.”

Prescott and Paul Davis, owner of Davis Fuels of Epsom, said they’ve had several customers call to say they were switching to Rymes. Both men have shared their allegations against Rymes with those customers. Davis, 70, also wrote customers who called a letter asking them for their continued business.

Davis said many of his customers have decided to stay with him after he explained why he believes Rymes is offering a much lower price. He has not joined Prescott’s lawsuit but is waiting, he said, to see where that goes.

Prescott has taken an additional step. He’s bought advertisements in newspapers across the state calling attention to the different prices Rymes is charging Concord-area customers and other customers. He’s targeted the ads in areas where the price is higher.

“Why is Rymes charging so much more in your town?” the ads read. Prescott claims responsibility for the ads and in one version includes a phone number that rings to a recorded statement by Prescott’s staff. The message urges callers to contact Rymes and ask why the prices vary so much between regions.

(Annmarie Timmins can be reached at 369-3323, atimmins@cmonitor.com or on Twitter @annmarietimmins.)

Legacy Comments5

I wonder what they charge for propane, my last bill was $3.89 per gallon with a competitor..........

So cheaper is better, right? Well maybe but not necessarily in the long run. Sure, we all want to save money but consider when a large company targets a local family owned business to put them out of business and then eliminates the competition. Do you think they will keep the prices low or raise them to a higher rate than they were before? This has happened in U.S. History and that is why we have laws against predatory pricing. It's just not right. They are selling fuel at a loss to put a competitor out of business and making it up on their other customers. Wal-Mart is not the same thing as they carry hundreds of products and charge the same to all customers in all stores. They are tough competitors and they have hurt local businesses but they have not targeted specific small businesses to eliminate a specific competitor. It would be a bad precedent to allow this as others would follow and then big business will reap the profits. In addition, this will eliminate needed local jobs as the big guys consolidate operations to their headquarters. That also hurts the local economy. I urge you to contact your local representative and let them know that predatory pricing practices are not acceptable as they hurt everyone in the long run. I love to study business and as a note, I do not know anyone from either of these companies.

Competition is good. Now, let's get a propane war going. Better yet, get natural gas companies to review areas to expand into due to current population densities and really get the party started! That would be good for Americans.

so what? Walmart does this every day with common product. Why not sue Cumby's for offering 10 cents off per gallon everyday with the smartpay option? So what if a company wants to sell their product at cost. It's their loss/gain, whatever. If Rymes is buying more volume, of course they'll get better pricing. It is how the market is supposed to work.

Competition is good, just as The_Citizen wrote, unfortunately neither of you understand what competition is. Competition is what existed before Rymes started low balling. They are trying to put one man, and his employees, out of business, and prevent another business from starting up. That would eliminate competition, enabling a monopoly. Then Rymes can begin price gouging you. So, in short, if you enjoy monopolies, price gouging and unemployment keep on thinking the way you do.

Post a Comment

You must be registered to comment on stories. Click here to register.