File photo: WRN
A state law that prevents businesses from selling goods at below wholesale prices is facing a legal challenge.
The Wisconsin Institute for Law and Liberty is representing the Krist Oil Company in a challenge of the state’s Minimum Markup Law, also known as the Unfair Sales Act, which stops businesses from charging a price less than what they paid for most goods and requires that gas, alcohol, and tobacco products be sold at above cost. Critics of the law claim it violates free market principles by forcing consumers to pay more than the competitive price, while its defenders argue it protects smaller businesses from being priced out by larger competitors.
WILL general counsel Rick Essenberg said the law is based upon an “antiquated economic theory,” and that consumers are already protected by state anti-trust laws. “The notion that consumers are somehow served by paying prices that are higher than they otherwise would have to pay is simply implausible,” Essenberg argued during a call with reporters Tuesday.
A report by the Wisconsin State Journal shows the Krist Oil, which operates several gas stations in northern Wisconsin and other states, has itself been under a state investigation since 2011 for allegedly violating that law. A review by the Wisconsin Public Research Institute also found Krist filed 70-percent of the markup law complaints the state received in 2014.
The law was previously struck down by a federal court, but was later reinstated on appeal. The latest challenge was filed Monday in Vilas County court. A spokesman with the state Department of Justice says the agency will defend the state against the lawsuit.