Price controls

Louisiana Milk Police Combat Prices That Are Too Reasonable

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In Louisiana, it is illegal to sell milk for too much. It's also illegal to sell milk for too little. It's all a bit complicated, so producers are eligible for a milk subsidy.

Last week, state regulators cracked down on a grocery store that was engaging in a "disruptive trade practice," selling milk at a price that could "injure, reduce, prevent, or destroy competition."

From The Advocate:

State Agriculture and Forestry Commissioner Mike Strain said Fresh Market violated state regulations by selling milk below cost as part of a promotion.

The supermarket routinely sells a gallon of skim, 1 percent, 2 percent or whole milk for $2.99 on Tuesdays, limiting the quantity to four per customer.

State law requires retailers' markups to be no less than 6 percent of the invoice cost after adding freight charges.

The Dairy Stabilization Board oversees milk prices in Louisiana. The board was established after Schwegmann, a New Orleans-area grocery chain, launched a legal battle in the 1970s with the Louisiana Milk Commission to buy milk from out-of-state suppliers because it was cheaper.

…"They can sell it 6 percent over cost all day long. It's when they sell it below cost that it becomes a problem," Strain said.

…Strain said his office dispatched an auditor to the Fresh Market in Mandeville after receiving a complaint about the Tuesday promotion. His press office declined to identify the complainant.

…Strain said the regulations exist to keep the price of milk as low as possible.

Allowing a supermarket to sell milk below cost could drive competitors out of business, allowing the store to then increase the price of milk, he said.

It's hard to see how a once-a-week sale on milk could drive other grocery stores to bankruptcy. But perhaps that's best left to the Dairy Stabilization Board, which since 1974 has protected consumers from "disruptive trade practices," "excessive prices," and "inadequate supply."

Click here for Reason coverage of federal price controls that inflate the price of milk.

H/T Radley Balko by way of the Daily Caller.

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  1. You can get it for 99 cents a gallon here. It’s not premium, but it works.

  2. Allowing a supermarket to sell milk below cost could drive competitors out of business, allowing the store to then increase the price of milk, he said.

    This idiocy is repeated endlessly by proglodytes despite zero real world evidence that it has ever actually happened.

    1. For some reason they believe that if prices for milk increased, more people wouldn’t enter the milk industry and drive the prices back to some equilibrium.

      They live in a world where the economy bears no resemblance to the one we actually live in.

    2. It could only happen if there were an ENORMOUS barrier to entry, and based on the number of grocery stores and convenience stores and gas stations and etc, this clearly isnt the case.

      Honestly, Im not sure its the case for any industry if competition already exists, then goes away, that it couldnt come back easily.

      1. There is a barrier to entry. It’s just that the barrier to entry is called ‘minimum and maximum food prices.’

        1. Yeah, I was referring to a natural barrier to entry. Government ones exist in lots of fields.

  3. Strain said his office dispatched an auditor to the Fresh Market in Mandeville after receiving a complaint about the Tuesday promotion. His press office declined to identify the complainant.

    Everybody knows it was one of Fresh Market’s competitors. Fresh Market should use its 6th Amendment right to be confronted by its accuser.

    If a business does something the government doesn’t like but is perfectly legal, the government has no qualms about naming and trying to shame that business. but when business uses government to bully somebody else, suddenly government doesn’t want to any naming and shaming.

  4. …Strain said his office dispatched an auditor to the Fresh Market in Mandeville after receiving a complaint about the Tuesday promotion.

    It’s depressing that society’s instinctual response is not to put the auditor down like a rabid animal.

  5. Paging Gov. Jindal – the free market is looking for you.

    1. Last time I saw him, he was on top of a float in Krewe du Vieux. Not looking his best.

  6. Doesn’t Georgia have really liberal food laws? Take note, Louisiana.

  7. My favorite part is that they are punishing competition in milk prices in order to not “injure, reduce, prevent, or destroy competition.”

    Kafka is spinning in his grave fast enough to light Prague for a year.

    1. But not between sundown Friday and sundown Saturday.

    2. The wierdest part of it is that they think that the price of just ONE ITEM is going to drive all of the competitors out of business.

      Like they have never heard of a “loss leader”.

      Who knew that putting discounted bananas at the front of the store was destructive competition?

  8. Cows milk is for baby cows!

    1. If that were true, Holsteins wouldnt produce that much milk.

      1. That’s why they pump them full of drugs.

        1. Not really; they were bred that way.

    2. And for chocolate chip brownies.

  9. Gotta keep prices high to keep prices low!

    Gotta stop competition to keep competition!

    Gotta be slaves to be free!

  10. What are the competition laws in Lousiana?

    1. I’m serious shouldn’t this violate some kind of anti-trust law or some shit….

      1. This is an anti-trust law.

  11. If I were a grocer, and my competitor started selling milk below cost, I would send my employees out to buy their milk and sell it at my store at a profit.

    1. My initial response is to say, you are clearly not an idiot. But then, of course, for the good of those fatty fat fat customers, you should be put in jail for two reasons. First, you purchased milk that was being sold at illegally low prices. Second, you are a filthy profiteer. One more reason, you are probably a fatty, and are raising the costs of health care for everyone, while stealing money from them. You are disgusting.

  12. In Pennsylvania there is a minimum milk price; I can’t buy milk for less than $3.48 a gallon.

    Seriously.

    It’s the same price at Costco, Trader Joe’s, Target, wherever, because the state-set price is so high that nobody would ever go above it by more than 3 cents.

    1. Yeah, I bet there is something similar in Virginia. It’s the most noticable cost-of-living factor next to housing prices. Other food prices are about 30% higher, but milk is more than double.

  13. Milk is about $1.57 a gallon in Arizona.

    It’s at least $3.50 a gallon in Northern Virginia.
    I’m not exactly sure why. I suspect some similar price support system.

    Also, I don’t see that low milk prices have driven dairy farmers out of business in Arizona. They clearly still exist. There’s no shortage of milk down there.

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