Milky Way to Freedom

Michael Gabriele, a deli owner in North Arlington, New Jersey, wanted to sell milk for less than his competitors. But when he tried to cut prices, New Jersey's Division of Dairy Industry ordered him to raise them or face heavy fines. Gabriele was outraged.

Why should the state, he asked the Bergen (N.J.) Record, "tell me that I can't change milk suppliers or take six cents out of my pocket and lose it on milk?"

New Jersey not only sets a minimum retail price for milk, it also requires stores to obtain state approval and wait 14 days before switching milk suppliers.

Now Gabriele has gone to court to try to overturn New Jersey's milk regulations, which are among the most stringent in the nation. He is challenging New Jersey's Milk Control Act as an anticompetitive government cartel.

Meanwhile, another suit, by the large New York dairy Beyer Farms, contends that New Jersey's regulations are unconstitutional restrictions of interstate commerce.

"What you have in New Jersey is complete protectionism," says attorney Sheldon Weiss, who represents Beyer Farms. "I can't think of another state which has milk laws as restrictive as New Jersey's."

After Gabriele publicly announced that he would sell milk for $2.03 a gallon, one penny below the state-mandated minimum, New Jersey regulators vowed not to enforce the Milk Control Act. But the law remains on the books and the Beyer Farms suit continues.

Success could mean big savings for New Jersey milk buyers. In December, a gallon of whole milk, on average, cost New Jersey consumers $2.63. In Philadelphia, where milk price controls are much less restrictive, the same gallon cost consumers $2.14.