(The Center Square) – People in Wisconsin are paying a bit more for some holiday staples this year thanks to the state’s decades-old protections for mom and pop gas stations.
Will Flanders with the Wisconsin Institute for Law and Liberty said the state’s minimum mark-up law makes Thanksgiving more expensive.
“Minimum markup in Wisconsin raises the prices of numerous products from gasoline to medicine. It is particularly painful at Thanksgiving when families are unable to take advantage of some of the deep discounts on important staples like the Thanksgiving turkey,” Flanders told The Center Square. “Companies are forced to either adhere to the law or face complaints from competitors who benefit from what is essentially a price-controlling cartel on consumer goods.”
Minimum mark-up is a depression-era law that was first enacted to stop out of state gas companies from undercutting Wisconsin gas station owners. It required gas station owners to charge cost, plus an additional mark-up of 6% over what the station paid, or 9.18% over the average wholesale price of the fuel, whichever was higher.
The law, however, has lingered on the books, and now stops stores in Wisconsin from offering lower than cost prices on many things.
“If you ever wondered why gas stations will advertise the ‘lowest legal price’ on beer, it’s because this antiquated state law prevents them from selling it any lower,” Flanders said. “Wisconsin is a state that is proud of its drinking heritage, particularly at Thanksgiving. People should be angry at the way minimum mark-up gets in the way of that.”
There have been some attempts to repeal the minimum mark-up law, but the law remains very popular with gas station and store owners. And Republican lawmakers in Madison are split on the idea of ending it.
Flanders said it remains unpopular with customers, though.
“There was a substantial push about five years ago to repeal the law. I think it made it into the public consciousness at that point. But special interests managed to defeat the effort, and I think interest in it has faded again,” Flanders added. “We’re not aware of any strong efforts currently toward repeal of the law. Like in many other areas, entrenched special interests have seemingly been successful in preventing reform. But a law that makes things tougher on consumers without even accomplishing its goal of protecting small businesses is ripe for another effort from the legislature.”
