The End of “Minimum Markup” in Wisconsin?

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The End of “Minimum Markup” in Wisconsin?

A Wisconsin law that mandates higher prices may be on its last legs.

At least, that’s what the Wisconsin Institute for Law and Liberty hopes. They have filed suit to overturn the Unfair Sales Law, perhaps better known as the “minimum markup” law.

What does this law do? According to the MacIver Institute:

“The law requires that alcohol, tobacco, and motor fuel are marked up 3 percent at the wholesale level, 6 percent at the retail level for alcohol and tobacco, and 9.18 percent at the retail level for motor fuel. It also forbids retailers from selling most other products below cost.”

In essence, this law forbids businesses from selling certain products at prices lower than what the state thinks is proper.

Proponents of the law claim that it helps small businesses fight off competition from bigger companies. Larger businesses, in their view, can offer discounts that their smaller competitors cannot, so the law is needed to ward off “unfair competition.”

Opponents of the law say that it hurts consumers, who are unable to benefit from lower prices that businesses may otherwise be willing to offer. The law, in their view, artificially drives up prices and protects entrenched businesses from competition.

Two bills that would have repealed this law, SB 371 and AB 452, failed to pass the legislature this year.

What do you think? Do small businesses need the state to protect them from price competition? Or should businesses be free to offer products at prices below a state-mandated minimum?

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