Wisconsin Dealers Go to Court to Maintain Minimum Markup Act

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Wisconsin Dealers Go to Court to Maintain Minimum Markup Act

NEW YORK -- The Wisconsin Petroleum Marketers & Convenience Store Association (WPMCA) is appealing a federal judge's ruling that Wisconsin's Unfair Sale Act, also known as a minimum markup law, is unconstitutional.

Wisconsin's Unfair Sales Act is designed to keep the big-box retailers from selling gasoline and other products below cost to attract shoppers, and not incidentally, drive the smaller retailers, such as convenience stores, out of business.

"This law is vital to all citizens and small retailers in Wisconsin," said WPMCA President Matt Hauser. "It ensures a fair and competitive marketplace for everyone. Without it, independent retailers may become victims to predatory pricing and consumers could ultimately pay higher prices and lose choices at the pump."

The law, passed in 1939, mandated wholesalers and retailers sell their products at a minimum specific markup set by the state. Without the mandate, large retailers can sell gasoline, alcohol and tobacco at any price, even at a loss, which could strangle small businesses and force them to close down. Then, with competition out of the way, prices are free to go back up, sometimes to higher prices than before.

The policy statement of the Wisconsin Unfair Sales act states: "The practice of selling certain items of merchandise below cost in order to attract patronage is generally a form of deceptive advertising and an unfair method of competition in commerce."

Currently, the law remains in effect, pending the appeal.

So far the law has survived 10 constitutional challenges, including one to the Wisconsin Supreme Court. The outcome of this 11th challenge will be known in early 2010 when the Seventh Circuit is expected to issue its ruling.

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