A debate is once again brewing at the Capitol over whether the 75-year-old Unfair Sales Act should come to an end.
The proposal would repeal what’s known as the minimum markup law, which prohibits retailers from selling their products below their costs. For years, the law has come under fire from conservative groups who say it harms the free market, although the law’s supporters argue it keeps competition high.
State Sen. Leah Vukmir, R-Wauwatosa, authored the bill along with GOP state Reps. Jim Ott of Mequon and Dave Murphy of Greenville. Those supporting repeal include Walmart and AAA Wisconsin, which said the law prevents motorists from getting “the most for their money at the gas pump.”
“It is not the fundamental role of government to impose an artificial price on consumer goods,” Vukmir said. “The minimum markup is an outdated practice, an unnecessary intrusion into the private sector and the free market. I strongly support the repeal of the law.”
Yet a coalition of businesses and associations has lined up against Vukmir’s proposal, saying repealing it would cause large out-of-state retailers to drive smaller operations out of business. That includes Kwik Trip, the Cooperative Network and the National Federation of Independent Businesses.
“If you are a grocer or convenience store operator or any brick and mortar retail business … your entire business plan and pricing strategy is based on this law,” said Brandon Scholz, the president and CEO of the Wisconsin Grocers Association.
Also part of the coalition is the Wisconsin Petroleum Marketers & Convenience Store Association. The group’s president, Matthew Hauser, said its members “don’t have the deep pockets of some of the out-of-state corporations” that have backed the law’s repeal in the past.
“They can’t afford a protracted price war” if the law is repealed, Hauser said.
The law, which has been in place since 1939, lets retailers file complaints with the Department of Agriculture, Trade and Consumer Protection if they believe a competitor is pricing items below cost. Those found violating the law for the first time can get fined $50 to $500, while each subsequent violation may cost them $200 to $2,500.
Earlier this year, a Milwaukee-based attorney filed several complaints against the Michigan-based grocery store chain Meijer a few months after it opened its first Wisconsin store. A DATCP spokesman could not immediately provide updates on those complaints.
But the Meijer case was just another “example of why this law needs to go,” MacIver Institute President Brett Healy said. Other examples include retailers whose flyers nationwide might include a low price that they can’t offer in Wisconsin due to the law, he added.
“The minimum markup law is antiquated and a relic of the distant past,” Healy said. “The idea that we need government to protect consumers from low prices is just ridiculous.”
Lawmakers have a Friday deadline to decide whether they’ll co-sponsor the bill.
— By Polo Rocha
WisBusiness.com
