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Wisconsin Price Police Say Meijer Doesn't Charge Enough for Dog Food

Wisconsin officials cracked down on Meijer for not charging enough for dog food, bananas, Cheerios, and school supplies.

Want to markup gas by 8 cents a gallon in Wisconsin?

You cannot because 8 cents does not meet the state's minimum markup requirements. The same logic applies to Meijer and Walmart for groceries and school supplies.

The minimum markup laws are a relic from seriously-misguided depression-era laws, still on the books in 26 states.

Price Police

The Wisconsin price police say Meijer Prices are Illegal and demand the grocery store charge more for all kinds of items.

In Wisconsin, the price police have gone after Meijer, a superstore that sells everything from groceries to electronics to pharmaceuticals. Rivals filed complaints accusing it of pricing 37 items—including bananas, dog food, ice cream and Cheerios—below cost. Meijer, which runs 200 stores in five states, says this was the first time it had ever been accused of hurting consumers by charging too little. Nonetheless, Wisconsin’s Department of Agriculture, Trade and Consumer Protection sent the superstore a letter explaining the requirements of the state’s Unfair Sales Act.

The story is similar for Krist Oil, a family-owned gasoline company with more than 70 locations, mostly in Michigan’s Upper Peninsula and Northern Wisconsin. Krist has the freedom to determine the most competitive price for its gasoline at its stations in Michigan, but it is legally barred from doing so in Wisconsin. Although it wants to lower prices, Krist is forced by the state to charge a markup of no less than 9.18%. The biggest losers are workers in rural Northern Wisconsin, who could benefit from lower gas prices.

Minimum Markup Laws

The Maclver Institute, a free market advocate for Wisconsin says Minimum Markup Makes Back-To-School Shoppers Pay More For Markers, Crayons And Other Supplies.

The minimum markup law, formally known as the Unfair Sales Act, bans retailers from selling merchandise below cost. The law, originally passed back in 1939, also requires a 9 percent price markup on specific items like alcohol, tobacco and gasoline.

Unfortunately, Wisconsinites are forced to pay for this archaic law that’s still on the books despite ongoing efforts to repeal it.

Families in Milwaukee buying basic items like composition books, markers, and crayons can expect to pay anywhere from 12 to 146 percent more than shoppers in St. Paul, Minn., Dubuque, Iowa, and Kalamazoo, Mich. Some common school items cost on average 90 percent more in Milwaukee. Crayola Crayons posted the single biggest price variance, costing almost 150 percent more in Milwaukee than in cities in neighboring states.

Unfair Sales Act

What a disastrous and consumer-unfriendly hoot.

Does the Fed want Congress to make a national law requiring prices have to go up 2% a year? I suppose that would be one way for the Fed to hit its absurd 2% inflation target.

Meanwhile, the battle is on. Krist Oil, with the help of attorneys at the Wisconsin Institute for Law and Liberty, has filed a lawsuit currently pending in state court that argues minimum markups arbitrarily and irrationally violate the economic liberty guaranteed by the Wisconsin Constitution. A victory here could be a blueprint for change in other states.

The problem with the approach is the outcome only applies to Wisconsin. Similar challenges would be needed in 25 more states.

From a practical standpoint, the best outcome might be if the state ruled against Krist, then Krist filed a challenge to a higher court which hopefully could make a national ruling, invalidating all such arcane laws in all states.

Mike "Mish" Shedlock

Just another day in Idiotopia.

WOW good bit of reporting .Wisconsin let the cat out of the bag when they started enforcing this law that should have had a sunset provision attached. Well i guess Amazon is illegal in 26 states . Laws are easy to legislate next to impossible to repeal .In florida it is a 2nd degree misdemeanor to co-habitat .(man, lucky i wasn't busted back in college ) The appalling part it takes multiple legislative efforts to remove . http://www.orlandosentinel.com/features/the-list/os-cohabitation-other-strange-florida-laws-post.html

I was wondering how they magically came up with 9.18%, so I looked it up: "For alcohol and tobacco products the definition of cost also includes a 3% cost of doing business markup for wholesalers and a 6% cost of doing business markup for retailers. Cost for wholesalers who operate retail outlets or retailers who purchase directly from the manufacturer includes a 9.18% markup (3% plus 6% compounded)". Under Wisconsin law, I would guess a store has no option to use "loss leaders" to attract customers, something that we regularly take advantage of here in Michigan.

BTW, California is proposing a new law regarding restaurants:Calderon, the Democratic majority leader in California's lower house, has introduced a bill to stop sit-down restaurants from offering customers straws with their beverages unless they specifically request one. Under Calderon's law, a waiter who serves a drink with an unrequested straw in it would face up to 6 months in jail and a fine of up to $1,000. http://reason.com/blog/2018/01/25/california-bill-would-criminalize-restau

It pobably doesn't count if the waiter is an illegal alien.

Mish, the next time you come up here to Wisconsin to watch the Brewers play the Cubs, be prepared to pay the “Chicago price” for your parking space.
To discriminate against sectors of society that are disliked (Cubs fans) seems wrong, but price discovery is price discovery here in WI.

I thought America was all about freedom, how can that be constitutional?

1

thanks for posting. this is crazy! it's right out of ayn rand

In a somewhat related article, ZH is reporting that grocery prices increased nearly 40% between 2000 and 2016. That's consistent with my experience, although Mish believes groceries are sill a bargain these days.

While the Fed has never revealed what inflation they are targeting, and why that would be good for consumers and the economy, after watching the Fed, ECB and BOJ print so much fiat and purchase everything from treasury bonds, junk bonds and now equities in an effort to create inflation, I wonder if it would be best if they were to simply mandate that all goods, services and wages inflate by 2% annually? Wouldn't that be easier? Yes I believe that is a stupid idea, but compared to all of their effort to try to achieve a 2% inflation target that benefits relatively few and creates massive income disparities, it would seem to be a more efficient solution.

Those charts validate my grocery claim. Any price up less than 20% over 10 years is up less than 2% per year. How often does one buy flour? Pasta is frequently on sale and lasts practically forever. Bread, milk, cheese, eggs, bananas, strawberries, lemons, tomatoes, pork chops and chicken, all up less than 2% per year. I routinely pay way less for every meat item in that basket. Thanks for confirming precisely what I have stated. Food is a bargain.

Some seem to interpret the United States experiment to be "the right to repress you in any way we see fit"

No bankers in Wisconsin are in prison for their participation in massive financial fraud during the housing bubble. It is unfair that this law is being enforced against the little guy.

I never knew markup laws existed. Real eye opener. This fits hand in hand with tariffs and affirmative action. If you can't compete on a level playing field, tilt the field in your favor.

She did write the manual for lefties - unintentionally one might hope

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