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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.

Posted by Owen at 1936 hrs
Economy + Law + Politics + Politics - Wisconsin

1. So, they both have the same opinion of the law, but Neumann is wrong because he gave the wrong reason?

   Huh…

   Posted by .(JavaScript must be enabled to view this email address) on September 03, 2010 at 2016 hrs
   
   
   

2. Seriously, are we supposed to ignore that Walker is on the wrong side of the free market here too? Or what?

   Posted by .(JavaScript must be enabled to view this email address) on September 03, 2010 at 2023 hrs
   
   
   

3. OK, 7 minutes between comments… patience…

   You are absolutely right.  As I reread the article, Walker is coming down on the wrong side too.  I have sent him an email asking for a clarification since the direct quote from him isn’t definitive.

   Posted by Owen on September 03, 2010 at 2028 hrs
   
   
   

4. I would also note that my own State Senator, Glenn Grothmann, is absolutely wrong on this issue.  He has opposed repealing minimum markup in the past.

   Posted by Owen on September 03, 2010 at 2029 hrs
   
   
   

5. I was just trying to make sure I was being clear on my point. I sometimes have a problem with that, being that my cynicism and sarcasm are seldom able to be transmitted through typing.

   Walker is my guy, but he is absolutely wrong on this issue, if this is his stance.

   The minimum markup law does nothing but stand in the way of the free market, it’s a farce. It is not the place of government to protect the profits of ANYONE, be they Wal-Mart or Ma and Pa Grocery.

   If, in todays day and age you cannot compete on the basis of service, especially with the cultural rejection of foreign products and big business of late, then you have other problems to deal with.

   Trust me, I live it every day.

   Posted by .(JavaScript must be enabled to view this email address) on September 03, 2010 at 2036 hrs
   
   
   

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   Posted by hairstraightener on September 04, 2010 at 0627 hrs
   
   
   

7. About five years ago, I asked Grothmann, in person, why our gas prices were so high compared to those in Minnesota. I also asked why we couldn’t repeal the minimum-profit law. He responded, “Minnesota pays much higher vehicle registration prices, so it all comes out in the wash,” and, “if we got rid of minimum markup, stores like Walmart would start selling gas - and ‘nobody’ wants that.” I was very surprised to hear those answers out of his mouth.

   Posted by Fuzz on September 04, 2010 at 0925 hrs
   
   
   

8. Just proves how entrenched the “progressive” ideas of economic engineering really are. It’s a crying shame.

   Who would want to buy gas at Wal-Mart, Glenn? How about the single mom living paycheck to paycheck, who now has to deal with big increases in car insurance as well as outlandish gasoline prices?

   Meddling in the market rarely has desireable results. Thats kind of how the economy got where it is.

   Posted by .(JavaScript must be enabled to view this email address) on September 04, 2010 at 1102 hrs
   
   
   

9. Here in Nevada, we don’t have minimum make up and we pay significantly less than Wisconsin, especially in groceries.  We have competition here between mom and pop stores and the chain stores.  We do have a choice. 
   For instance, at Thanksgiving time, when Wisconsin was paying about $1 a pound for a turkey, we were paying 20 cents a pound.
   That makes a big difference when you have mouths to feed and you have limited income.  But I guess, in Wisconsin, there are no poor people..

   Posted by .(JavaScript must be enabled to view this email address) on September 04, 2010 at 1332 hrs
   
   
   

10. 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.”

    Scott Walker has been endorsed by the Ethanol Lobby.

    So it’s not likely that he’ll make any effort to pull the corncobs out of our a###es, is it?

    If he DID so, fuel-mileage would increase, and taxpayers would pay less in subsidies to the Corn-A-Hole-ing crowd.

    Posted by dad29 on September 04, 2010 at 1648 hrs
    
    
    

11. Great, so now we can chosse from a bunch of RINOs.

    If Glenn Grothman really said what Fuzz in #7 said, I don’t know what to think.

    If it’s true, it just goes to show how creepy socialism has taken over.

    Posted by .(JavaScript must be enabled to view this email address) on September 05, 2010 at 1044 hrs
    
    
    

12. I meant to say Creeping socialism.

    Same thing i guess.

    Posted by .(JavaScript must be enabled to view this email address) on September 05, 2010 at 1045 hrs
    
    
    

13. In Vegas, Wal Mart tried to sell gasoline and you know, it failed and they took the pumps out.
    So, Grothman is wrong.

    Posted by Dan on September 05, 2010 at 1341 hrs
    
    
    

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    Posted by .(JavaScript must be enabled to view this email address) on September 05, 2010 at 1439 hrs
    
    
    

15. “Glen Grothman is right.”

    I have typed this exactly as many times in my life as Owen and others on the blog have typed in:

    “Glenn Grothman is wrong “

    Once

    Of course- even when he’s right, the explanation for his position doesn’t make a lot of sense.

    But he is, and that’s good enough for a labor day weekend.

    Posted by .(JavaScript must be enabled to view this email address) on September 05, 2010 at 2314 hrs
    
    
    

16. But he is, and that’s good enough for a labor day weekend

    Yeah, right.

    Maybe you should understand the “cliff’s-notes” of the detriment of this law before commenting on it.

    Posted by .(JavaScript must be enabled to view this email address) on September 06, 2010 at 1421 hrs
    
    
    

17. I could always see both sides of this argument.  I think minimum markup is absurd.  Government has no interest in establishing a minimum level of profit.

    But I also think in terms of preserving competition and consumer options, there may be some merit in preventing businesses from selling items below cost in order to drive traffic.  While it’s arguably beneficial to consumers in the short term, it’s negative if the long-term effect is to eliminate or stifle other retail options that might otherwise serve as a natural competitive check on prices.

    Consumers typically benefit from competition, but ultimately it is the goal of most businesses to increase their market share, and that usually means running their competitors out of business.  Somehow, those interests have to balanced.  Consumers aren’t rationally going to pay more simply to preserve their options, and businesses aren’t rationally going to help the other guy because its customers like having choices.

    Posted by Recess Supervisor on September 06, 2010 at 1631 hrs
    
    
    

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