AmeriGas, Blue Rhino Violated Anti-Trust Laws, Lawsuit Alleges

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AmeriGas Partners LP and Ferrellgas LP, the parent of Blue Rhino are being sued by direct propane buyers who allege that the companies violated anti-trust laws by conspiring to raise the price of propane in exchangeable steel tanks. The two companies, who control 80 percent of the propane market, allegedly schemed to raise prices by 13 percent.

It is alleged that Blue Rhino and AmeriGas violated Section 1 of the Sherman Act by conspiring to fix prices. The Federal Trade Commission (FTC) alleges that the tanks contained 17 pounds of propane prior to 2008. However, the companies allegedly agreed to lower the amount in each “full” tank to 15 pounds while charging the same price. This effectively led to a 13 percent price increase, the suit alleges.

“Defendants’ conduct has restrained price competition and led to higher prices for propane sold in propane exchange tanks in the United States,” the suit states.“As a result of defendants’ conduct, all direct purchasers in the United States, including plaintiff, were forced to pay a higher price per pound for propane sold in propane exchange tanks than they otherwise would have paid.”

The brand names of the tanks involved are Blue Rhino and AmeriGas:

  • Ferrellgas L.P.: Delaware Corporation—Headquarter: Overland Park, Kansas
  • Ferrellgas Partners, L.P. Delaware Limited Partnership—Headquarter: Kansas
  • AmeriGas Propane L.P.: King of Prussia, Pennsylvania
  • AmeriGas Partners L.P. King of Prussia, Pennsylvania
  • UGI Corporation: Parent company of AmeriGas; King of Prussia, Pennsylvania

Deep price fixing and violating state and federal anti-trust laws are alleged in the suit. The case alleges that Ferrellgas alone was not able to have Wal-Mart Inc., one of its largest buyers, accept the reduced tanks. It is alleged that Wal-Mart eventually did accept because Ferrellgas and AmeriGas schemed together. This led to a price increase for consumers, the lawsuit alleges.

Blue Rhino has been accused of similar actions in the past. In 2009, a lawsuit alleged that Blue Rhino never informed its customers that it reduced the amount of gas per tank. The case was settled for about $25 million in 2012. The settlement involved onsumers who bought Blue Rhino tanks between June 15, 2005 and October 13, 2011 and AmeriGas tanks between June 15, 2005 and November, 30, 2009.