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No Surprise: Higher Back-To-School Prices Thanks To Wisconsin's Minimum Markup Law

Comments | Posted in News, mi perspectives | By MI President Brett Healy | Posted August 22, 2016 5:00 AM

2016 MacIver Annual Price Check
Some back-to-school items in Wisconsin 24%-148% higher

August 21, 2016

[Madison, Wisc...] Back-to-school shopping in Wisconsin is once again more expensive than in neighboring states thanks to the state's minimum markup law that outlaws sale prices that are too low.

The minimum markup law, also 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 made to pay for this archaic law that is still on the books.

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According to advertisements obtained by the MacIver Institute from early August, Wal-Mart stores in Milwaukee charged higher prices for some basic back-to-school items than Wal-Mart stores in Chicago or Minneapolis.

Some common school items cost on average 92 percent more in Milwaukee, with Crayola Crayons the single biggest difference, costing almost 150 percent more in Milwaukee than in Chicago or Minneapolis.

Parents picking up a Themebook in Chicago only paid $0.17, but that same Themebook cost $0.42 in Milwaukee, more than double the price in Illinois.

Crayola Markers cost $0.97 in Minneapolis but thanks to Wisconsin's archaic minimum markup law, those same Crayola Markers cost $1.94 in Milwaukee, a 100 percent increase.

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Last legislative session, Sen. Leah Vukmir (R-Wauwatosa) and Rep. Jim Ott (R-Mequon) introduced a bill that would eliminate the Unfair Sales Act. Unfortunately, the repeal bill did not receive even a public hearing in either house.

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Even though legislators have refused to act, a recent poll shows that Wisconsinites are tired of paying higher prices and want the law repealed. Late last year, reputable research firm Public Opinion Strategies published a poll that showed eighty percent had an unfavorable view of the minimum markup law when told "Wisconsin residents are required to pay more for many on-sale items than residents in neighboring states simply because of this seventy-five year old law."

Wisconsinites were just as mad when they found out "the law forbids retailers from selling to consumers below cost also requires that gasoline retailers sell gas to consumers with a minimum nine percent markup, meaning Wisconsin drivers have to pay more for gas here than drivers do in other states."

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The law has also lead to a situation where retailers have filed complaints with the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) against competitors offering items for too low of a price. MacIver first reported last summer on numerous complaints being filed against Meijer, a privately owned Michigan-based grocery and supercenter chain of stores with over 200 locations in the country, as it broke into the Wisconsin market.

Phil Woodman, president of very popular Wisconsin-based retailer Woodman's, complained to DATCP that Meijer's sale price on Maxwell House coffee was "ridiculous!!"

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The minimum markup law also makes illegal in Wisconsin many of the discounts received on popular national bargain hunting days like "Black Friday" or "Amazon National Prime Day."

Luckily for Wisconsinites, Wisconsin state government has its own Price Police, bureaucrats who make sure you are not receiving the best deals on the items you want to buy.

The earliest Senator Vukmir and Representative Ott could re-introduce their bill to repeal the Unfair Sales Act is January, 2017 when the next session of the legislature is scheduled to convene.

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