Gas Prices Hit Distributors

MISSISSIPPI (March 16, 2011 - Desoto Times)—Gulf Coast gas prices rose on average, $.43 cents from Feb. 14 to March 14 according to the U.S. Energy Information Administration, putting a burden not only on many families checkbooks but also distribution companies around the Mid-South.

James Lunsford, president of A&B Distributing in Olive Branch, said the increases affect the company’s profit field.

“It doesn’t really affect beer prices as much as it affects consumption,” Lunsford said. “There is no question that the expense gets into the income where beer is purchased.”

Lunsford said his suppliers raise their costs on a quarterly basis but the distributor doesn’t get to.

“We don’t do fuel surcharges to our customers,” Lunsford said. “It doesn’t affect the consumer this year. When we lookout next year, it could affect the cost but we really have to eat those fuel surcharges every quarter.”

Joe Bell, manager of marketing and public affairs for The Kroger Co. Delta Division, said the rising fuel costs go hand in hand with food costs.

“We’re not only delivering from our distribution center, but we’re getting the food from all over the world to our distribution center,” Bell said. “They’re working in tandem. It costs truckers more to get to us and us more to get to the store.”

While each truckload of food coming into the distribution center has a $200 to $300 surcharge due to fuel costs, Bell said the increase doesn’t translate to food costs the same way.

Read more on Desoto Times Tribune Web site: http://www.desototimes.com/articles/2011/03/17/news/doc4d8151d6d3fb6081647287.txt

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