Bill cutting minimum markup on some items draws debate
Backers of a bill that would eliminate the minimum markup on prescription drugs and other products are touting it as a way to bring down prices on consumer essentials.
But critics say this would harm many retailers by giving huge companies like Walmart the advantage, driving local competition out of business.
The GOP bill looks to add carve-outs to the so-called Unfair Sales Act, a 75-year-old state law banning retailers from selling items below cost. The bill, though, wouldn't apply to groceries, gasoline, liquor and a series of other products.
Bill co-author Rep. Jim Ott at a news conference yesterday said the "outdated and antiquated" minimum markup law prices merchandise higher than needed.
"What consumers are being protected by telling merchants they have to sell their merchandise for prices that are higher or than they want?" said Ott, R-Mequon.
He noted that he and Sen. Leah Vukmir, co-author for the bill, introduced a bill to “repeal the entire minimum markup law” in the previous legislative session.
He says this bill is “a more reasonable, smaller attempt” to go after prescription drugs and some merchandise.
“Even so, it’s late in the session, so I’m still hopeful that there can be some movement on this,” he said.
The bill was discussed at a public hearing yesterday before a Senate committee, although it has yet to get a hearing in the Assembly committee it was referred to. Dozens of Walmart employees were gathered in and around the room where the hearing was held.
Brandon Scholz, president of the Wisconsin Grocers Association, argued at the hearing that cutting part of the Unfair Sales Tax opens the door to getting rid of it entirely.
“I’ve been with the Wisconsin Grocers Association for 21 years, and we’ve fought it every year for 21 years,” Scholz told WisBusiness.com.
He says he opposes the bill because it has a “devastating effect on retailers,” and told legislators in the Senate hearing they will see their hometown grocer go out of business as a result of this law -- “but they won’t see Walmart go out of business.”
“It’s all about Walmart,” he said. “They will eventually drive competitors out of business… That’s just what they do.”
Meanwhile, others stressed the need to remove the minimum markup on prescription drugs in order to lower health care costs.
"Many patients... can't get those everyday low prices, and that can really infringe on patient care," Walmart pharmacist Bonnie Smith said at Ott’s news conference.
She’s been working as a pharmacist for Walmart in Illinois for 20 years, and now oversees pharmacies in Madison and Milwaukee. She says patients are directly impacted by this law, as the cost of their medicines for blood pressure, thyroid problems or cholesterol can more than double.
“This is impacting patient care -- it’s not just about the price,” she said.
Other speakers at the news conference included representatives from the MacIver Institute and the Wisconsin Institute for Law and Liberty, who said their data shows the minimum markup bill does not protect small businesses.
Groups registered against the bill included: Kwik Trip, the state Pharmacy Society, the Wisconsin Grocers Association and the Wisconsin Restaurants Association.
Hear the audio from Ott’s news conference: http://soundcloud.com/wispolitics/180214ottnewsconference/s-g6ZcM
--By Benita Mathew and Alex Moe