Jan. 10--Backyard grillers who found themselves a little short on flame in recent years may have been burned by Blue Rhino and AmeriGas Cylinder Exchange, the two leading suppliers of propane exchange tanks.
The Federal Trade Commission announced Friday it has approved final orders settling charges that the companies illegally colluded to push Wal-Mart and other retailers to accept lower propane levels in their exchange tanks while keeping the prices up.
The FTC complaint alleges that in 2008, Blue Rhino and AmeriGas, which together control 80 percent of the propane tank market, each reduced the level of propane in exchange tanks from to 15 pounds from 17, without a reduction in wholesale price. Lowe's, Blue Rhino's largest customer, agreed to the 15-pound tanks but only if all other retailers went along with it, according to the complaint.
When faced with resistance from Wal-Mart, the two companies secretly agreed to coordinate their negotiations, pressuring the retailer to accept the reduced fill level.
"The agreement between Blue Rhino and AmeriGas to maintain a united front against Walmart had the effect of raising the price per pound of propane sold to Walmart, and likely to the ultimate consumers," the FTC said in a statement.
Under the settlements, which were reached in October, Blue Rhino and AmeriGas are barred from agreeing with competitors to modify fill levels or fix the prices of exchange tanks, and from coordinating negotiations with customers.
Blue Rhino is based in Overland Park, Kan. AmeriGas is headquartered in King of Prussia, Pa.
rchannick@tribpub.com
Twitter @RobertChannick
