4.11.09

YOUR RIGHT TO EXERCISE CHOICE. Protecting competitors is not the same as protecting competition. In Wisconsin, your right to have independent grocers to buy Thanksgiving fixings from is not free.
Wal-Mart has full-page ads in metro daily newspapers today promoting its prices for Thanksgiving dinner. It's a striking demonstration of the cost to consumers of the state's Unfair Sales Act, also known informally as Wisconsin's minimum markup law.

The ad in our paper offers frozen whole turkeys for 86 cents a pound. The same ad in the Chicago Tribune has turkeys for 40 cents a pound.

Ocean Spray cranberry sauce and Heinz turkey gravy are priced the same in Illinois and Wisconsin. But Green Giant canned vegetables cost six cents more here (56 cents) and Stove Top stuffing is $1.15 a box at Wisconsin Wal-Marts, compared with 78 cents in Illinois.

Wal-Mart's spokeswoman for the region has said the company will honor the law and will not offer its below-cost loss leader deals in Wisconsin. Wal-Mart prints different ad fliers during the holiday season, with higher prices, for stores in Wisconsin and three other states that ban selling below cost.

Proponents of Wisconsin's Unfair Sales Act say it protects small retailers who can't afford to sell things below cost.

The Wisconsin law does allow retailers to sell below cost to match competitors' prices, and I've never seen the state go after anyone for selling cheap Thanksgiving turkeys. I expect the prevailing supermarket price for frozen turkeys will go below 50 cents a pound this year, as it usually does.
The columnist is too young. Yes, the prevailing supermarket price for frozen turkeys will fall, but it's still covered by minimum markup. The state did investigate below-cost sales of December turkeys in 1973, and Morgan Reynolds, who was teaching intermediate price theory at Wisconsin at the time, had some fun with that news item.

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