Lawmakers Set Sites on Wisconsin's Minimum Markup Law
There’s dispute brewing in Madison over the state’s Unfair Sales Act. It’s also known as the minimum mark-up law. It requires retailers to mark-up what they charge for goods. The rule has been in place since the end of the Great Depression, and some lawmakers say it’s time to rethink the legislation.
In Wisconsin, for every dollar consumers spend on alcohol, tobacco and gas, about one penny is due to the state’s Unfair Sales Act. In addition to bumping-up the cost of those items, the law also bans retailers from selling general merchandise at below cost.
“Really, all the minimum markup law does in the end is it causes consumers to pay higher prices because it limits how low a retailer can sell their products for.”
That’s Republican Representative Jim Ott. He’s one of two lawmakers behind recently introduced legislation that would scrap the law.
Ott says the Unfair Sales Act was created to stop big retailers from lowering their prices and running smaller stores out of business. But he says these days, price doesn’t always determine where people shop.
“They also shop for quality, they also shop for unique products, and they also shop for convenience. Say sometimes you need a jar of olives, maybe you don’t want to buy a vat that has 20 jars of olives in it. You just want one jar of olives. Maybe sometimes you don’t want to drive to the large retailer, maybe you just want to walk to the corner store,” Ott says.
That fact isn’t lost upon Shelley McClone Carriere.
“People shop here because they like the politics of what we do and want to support us,” McClone Carriere says.
McClone Carriere is in charge of inventory at the Riverwest Coop.
She says without the law, retailers could manipulate the market.
“Undercharging for something isn’t sustainable. You can’t stay open as a business if you’re not marking up foods,” McClone Carriere says.
Wisconsin is one of about 16 states that requires markups. Brandon Scholz, president of the Wisconsin Grocers Association understands that most states don’t have them and businesses operate just fine. But he fears complications could arise, if you alter the tide.
“In other words, their laws are the way they are. They’ve developed their business plans and their pricing strategies to deal with their law. By changing the law, that’s where you’re going to see the problems because everybody’s business plans and pricing strategies have been built on this law, predicated on this law,” Scholz says.
Scholz says besides, the notion that the law is causing people in Wisconsin to pay more for goods is unfounded. He says prices here are comparable to neighboring states.
The bill making the rounds at the Capitol that would do away with the Unfair Sales Act stems from anonymous complaints about a newly opened Meijer store - that it was selling goods too cheaply. This isn’t the first time lawmakers and businesses have tried to do away with the law. Walmart fought it in the early 2000s. This time around, Walmart is the only organization registered in favor of the legislation. Nineteen groups have registered against it.