‘This is bad for Wisconsin consumers and retailers’

MADISON — Wisconsin shoppers are
learning a hard lesson this Black Friday weekend. They are paying
more, according to one lawmaker who hopes to change that.

The state’s minimum markup law actually makes it illegal for stores
to sell TVs, gaming systems, clothes, shoes, appliances and just
about everything else for the lowest price.

“Some Black Friday deals are valid in Illinois or Iowa but not in
Wisconsin. This is bad for Wisconsin consumers and bad for Wisconsin
retailers,” state Sen. Duey Stroebel, R-Cedarburg, said. “A family
in Kenosha or Marinette should not have to drive across state lines
to get the lowest price on Black Friday. Government should not
dictate pricing on consumer goods, the free market can set prices
for these goods that both retailers are happy to accept and
consumers are happy to pay.”

Minimum markup in Wisconsin dates back to the Great Depression. It
requires stores to sell most everything at a 9 percent markup. Beer
and gasoline get a 3 percent markup.

“The goal was to set a price floor to prevent bigger businesses from
selling items at a loss in an effort to drive out smaller
competition. Once the competition was out of business, the theory
goes, the  bigger businesses could then raise the prices,” Will
Flanders, research director at the Wisconsin Institute for Law and
Liberty, said. “The minimum markup law remains in place because many
small businesses and special interests believe the law protects
them. For example, existing gas stations like it because it prevents
other startups from coming and offering lower prices. It guarantees
a certain level of profit or margin on sales.”

It is, ironically, the bigger stores that suffer the most under
minimum markup, according to Stroebel. He asserts it’s the shoppers
at the bigger stores that suffer the most under minimum markup.

“Wisconsin’s minimum markup law increases costs for items,” Stroebel
said. “That’s especially clear when some Black Friday sale prices
aren’t valid in Wisconsin because of our minimum markup law.
Wisconsinites should be able to get the same deals on Black Friday
as our neighbors in Illinois.”

“The minimum markup law is a ‘lose-lose’ for Wisconsin,” Flanders
added. “It raises prices for consumers without helping the small
businesses it is designed to protect. It is high time that this
Depression-era measure come off the books.”

There is an effort to end minimum markup. But it has gone nowhere
over the past few years.

“Unfortunately, a full minimum markup repeal remains a heavy lift,”
Flanders said. “But there are reasons to be optimistic. Gov. [Tony]
Evers supported a repeal on gasoline. And a bipartisan group of
lawmakers supported a repeal of the law’s application to
prescription drugs. Perhaps by simply eroding the law, we can
finally put it in the dustbin.”

Stroebel has a proposal to end minimum markup. He said he hopes to
get his plan a hearing in the spring.