Wisconsin investigates grocery for pricing too low

The idea of minimum price regulations saw its American heyday during the New Deal, where it was a prime component of FDR’s National Recovery Administration. And the 1935 Supreme Court decision striking down the NRA as unconstitutional didn’t affect state laws like the one that has gotten Grand Rapids-based grocery chain Meijer in trouble for allegedly pricing its goods too low [Michigan Live]:

“Wisconsin is among 16 states with minimum markup laws that have price protections for retailers, according to the National Conference of State Legislatures.

“This is a bit peculiar for us, we are not accustomed to regulations that limit our customers’ ability to save money when they shop with us,” Guglielmi said.

More: K. William Watson, Cato (“While state laws like Wisconsin’s Unfair Sales Act are relatively rare, the federal government relies on the same bad economics to justify the U.S. antidumping law, which imposes punitive tariffs on imports sold below ‘fair value.'”).


  • What Meijer ought to do—post signs in stores stating what the price should be without this silly law–and then invite shoppers to call/email the bureaucrats who have nothing better to do with their time.

    It’s painfully obvious that whatever agency is looking at this has too big a budget.

    • That wouldn’t help much. It’s not like the people of Wisconsin are unaware of this law. It has been used for decades to smack small independent gas stations that try to run discount promotions.

      And the agency that enforces this law doesn’t do much in the way of ad-hoc investigating. They sit back and wait for the violator’s competitors to file complaints.

  • Those are some pretty good prices!

    It’s nice for the retailers when the Government helps them out, at the expense of the consumers, by enforcing a cartel price (above the free market price and lower than or equal to the monopoly price) for the supermarkets.

    The bane of the cartel is the strong incentive for individual members to cheat on their sales. Here, the Wisconsin government, by its enforcement, ensures that the supermarket cartel prospers within its borders.

  • I can understand (but disagree) with price controls because in a perfect world with unicorns you don’t want to have large companies dump on smaller ones because the large company can afford to take the losses longer or compensate from other locations.

    But this seems to be a case where Mejier was not trying to dump products or lower prices to control the market, but rather just to get into the market.

    The lower prices were for grand opening of stores in the highly competitive food store market. They were not long term prices.

    Haven’t Wisconsin legislators ever hear of “loss leaders,” an item that is sold at a low price just to get people in the store?

    I guess the legislators would rather make laws and remain ignorant rather than be informed and help businesses (and in the long run, consumers.)

    • I live in Wisconsin, I was born here and have lived here my whole life (45 years).

      This law is best known for being used to smack down small independent gas stations that try to use discount promotions to attract business away from the the branded stations.

    • Gitarcarver – if the smaller company cannot offer lower prices than the big company, yes they may go out of business – TO THE BENEFIT OF ALL CONSUMERS WHO NOW PAY LOWER PRICES FOR GOODS.

      Likely with a widened selection of varieties and brands.

      Price protection hurts consumers. It protects the cartel only, as noted by someone else above.

  • The voters of Wisconsin are generally aware of this law and it isn’t popular. Despite this, neither the Ds nor Rs in the state government show any interest in getting rid of it.