In Louisiana, it is illegal to
sell milk for too much.
It’s also illegal to sell milk for too little. It’s all a bit
complicated, so producers are eligible for a milk subsidy.Last week, state regulators cracked down on a grocery store that
was engaging in a “disruptive trade practice,” selling milk at a
price that could “injure,
reduce, prevent, or destroy competition.”From
State Agriculture and Forestry Commissioner Mike Strain said
Fresh Market violated state regulations by selling milk below cost
as part of a promotion.
The supermarket routinely sells a gallon of skim, 1 percent, 2
percent or whole milk for $2.99 on Tuesdays, limiting the quantity
to four per customer.
State law requires retailers’ markups to be no less than 6
percent of the invoice cost after adding freight charges.
The Dairy Stabilization Board oversees milk prices in Louisiana.
The board was established after Schwegmann, a New Orleans-area
grocery chain, launched a legal battle in the 1970s with the
Louisiana Milk Commission to buy milk from out-of-state suppliers
because it was cheaper.
…“They can sell it 6 percent over cost all day long. It’s when
they sell it below cost that it becomes a problem,” Strain
…Strain said his office dispatched an auditor to the Fresh
Market in Mandeville after receiving a complaint about the Tuesday
promotion. His press office declined to identify the
…Strain said the regulations exist to keep the price of milk as
low as possible.
Allowing a supermarket to sell milk below cost could drive
competitors out of business, allowing the store to then increase
the price of milk, he said.
It’s hard to see how a once-a-week sale on milk could drive
other grocery stores to bankruptcy. But perhaps that’s best left to
the Dairy Stabilization Board, which since 1974 has protected
consumers from “disruptive trade practices,” “excessive prices,”
and “inadequate supply.”Click
here for Reason coverage of federal price controls
that inflate the price of milk.H/T Radley Balko
by way of the