Court Rules To Reinstate Minimum Profit Law

Argh.

Madison - A federal appeals court Friday revived Wisconsin’s controversial minimum markup law on gasoline sales after a lower court last year blocked enforcement of it.

The decision means the 1939 law aimed at protecting small-time gas station operators will once again be enforced in the state. Many mom-and-pop operators have said the law prevents them from being run out of business by companies that could sell gas at or below cost.

But opponents of the law - including some small shops - have maintained it stifles competition and costs drivers an extra 1 to 8 cents a gallon.

In February 2009, Chief U.S. District Judge Rudolph Randa in Milwaukee froze enforcement of the Wisconsin law, ruling that it violated the federal Sherman Act, an antitrust law that bars restraint of trade between states.

State Attorney General J.B. Van Hollen, a Republican, then decided not to appeal the federal court’s decision. Gov. Jim Doyle, a Democrat, also supported leaving the law dead - an illustration of the unusual way the intensely contested issue cuts across established political lines.

But the Wisconsin Petroleum Marketers and Convenience Store Association successfully intervened in the case and won the appellate decision reinstating the law.

The decision reopens the decades-long debate in Madison over whether the law should be kept in place. Two of the candidates for governor said they supported the markup law, and none of them called for repealing it.

This also highlights a tangible difference between Walker and Neumann:

Former U.S. Rep. Mark Neumann of Nashotah, a Republican, normally opposes government involvement in markets but said he supports the markup law.

“It’s a fine line to walk on this one,” he said.

Without the law, big companies could lower prices temporarily, drive competitors out of business and then raise prices, he said.

“I want the market to work . . . ,” he said. “You can’t create situations where competition is going to be destroyed.”

Milwaukee County Executive Scott Walker, the other major Republican in the race, stopped short of saying he supported the law, but said his focus was on finding other ways to lower gas prices rather than repealing it.

“The biggest reason to act on it would be if you could see a noticeable change in prices, but everything I’ve seen thus far suggests that it wouldn’t be,” Walker said. “It’s really about the oil supply or the fuel supply. And that’s why I’d be focused on making sure we’re connected to more refineries.”

Neumann is wrong.  You can’t believe in the free market and support the minimum markup law.  They are contrary concepts.