MacIver News Service | Jan. 10, 2018
By M.D. Kittle
MADISON —A conservative lawmaker is calling on Gov. Tony Evers to work with the Legislature to do away with Wisconsin’s Unfair Sales Act, a relic of a law that has smothered competition and cost consumers higher prices for nearly 80 years.
But state Sen. David Craig (R-Big Bend) will have to persuade more than the new Democrat governor. He’ll have to change the thinking of some of his fellow Republicans who have resisted repeal amid pressure from special interests.
“Wisconsin’s Unfair Sales Act, also known as the ‘minimum markup law,’ has far surpassed its life expectancy,” Craig wrote in his letter to Evers, sent Wednesday. “…(T)his antiquated law has limited the pricing freedom of Wisconsin businesses and put the financial burden squarely on middle-class consumers.”
As the senator notes, the minimum markup law sets a government-mandated price floor causing Wisconsin consumers to pay more — in some cases, a lot more, as MacIver News Service has reported.
“This anti-free market law makes it illegal for store owners across the state to sell goods at a discount, establishing markups at least nine percent above wholesale cost,” Craig wrote. “The limitation of marketplace competition, combined with the mandated restriction on discounted pricing, prevents consumers from stretching their dollar and is a direct assault on household budgets.”'Alleviating the financial burden imposed by the Unfair Sales Act is not a Republican or Democrat issue, it is a Wisconsin issue, and we can work together to repeal this law' -- @SenDaveCraig #wiright #wipolitics Click To Tweet
Supporters of the Great Depression-era law insist that it protects bigger retailers from driving out competitors, particularly mom-and-pop stores, through pricing power. Federal Trade Commission research, however, has found little risk in that. In 2005, FTC chairwoman Deborah Platt Majoras, told a Senate committee that minimum markup laws “harm consumers by depriving them of the lower prices that more efficient stations can charge.”
Still, special interest groups like the Wisconsin Petroleum Marketers & Convenience Store Association push the same talking points they have for decades.
“We oppose any attempt to weaken the law because we believe any attack on Wisconsin industry is an attack on all industry,” the association’s Douglas Parrott told a legislative committee during a hearing on a minimum markup reform bill in February.
It was a near-miracle that Senate Bill 263 even received a public hearing. The measure, which would have eliminated the restriction on retailers and wholesalers selling prescription drugs and general merchandise at below cost, didn’t make it out alive for a floor vote.
“Alleviating the financial burden imposed by the Unfair Sales Act is not a Republican or Democrat issue, it is a Wisconsin issue, and we can work together to repeal this law and allow Wisconsin’s families and businesses to prosper by getting government further out of their budgets,” Craig wrote in his letter to Evers.
“I ask you to work with the Legislature in championing this reform which will further improve Wisconsin’s standing as one of the best places to live, work, and raise a family,” the senator concluded.
Read Sen. Craig’s full letter here.