fedgazette

Latest sale: Minimum markup repealed

Wisconsin State Roundup

Published May 1, 2009  |  May 2009 issue

A federal district court in Milwaukee struck down a long-standing state law that required gas stations to mark up gas prices as much as 9 percent.

Originally passed in 1939, the law has been a target for elimination multiple times at the state Legislature. The state had until mid-March to file an appeal to the February ruling, but chose not to, likely because Democratic Gov. Jim Doyle has been a long-time critic of the law.

The ruling had markup critics celebrating what they claimed would be a 1 cent to 8 cent drop in gas prices for consumers. Supporters of the law said small mom-and-pop chains could be put out of business by larger retailers who can now sell gas at cost, or even use below-cost prices as a loss leader to get drivers into their convenience stores for other, more profitable purchases.

The ruling also affects retailers, who previously were prohibited from selling certain goods below cost. In 2003, the Federal Trade Commission ruled that markup laws discourage competition and raise consumer prices.

Ronald A. Wirtz

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