Every Tuesday at Fresh Market stores in LA, you are able to buy a gallon of milk for 2.99, this was a promotion that the store had been running for some time. Now, thanks to some unidentified complaint, the State Agriculture and Forestry Commissioner Mike Strain says that this is illegal and has to stop.
No seriously a State Commissioner told a store that it is against the law for them to put a particular product on sale because the Dairy Stabilization Board doesn’t like it being the price that Fresh Market was selling the milk. Understand this, they were not affecting the price that the store itself was willing to buy the milk from the distributor, merely lowering the cost that they sold it to the consumer, also known as a sale. They LOST money on this deal. Willingly lost money on this deal.
But that isn’t cool once government gets involved. See government wants to control your life, and everything about you, including and down to the cost you pay for milk. If Fresh Market wanted to sell coke for 2.99 on every Tuesday that would be fine. But not milk. No sir.
According to state regulation milk has to be sold at 6% above invoice and shipping costs. You can go higher, but never lower. Thus milk will basically cost the same amount everywhere. The amount of things that are wrong with the idea that a government agency, be it state or federal, tells you how much you are ALLOWED to sell a product for is well ridiculous. If a store wants to lose money on a certain product to bring in customers to make that money up on other products who gives a damn. If the promotion doesn’t work the store will either cut it out or go out of business. Either way that is the law of supply and demand and capitalism. You know the concept of allowing people to make choices.
The Dairy Stabilization Board doesn’t agree with that though. Like most things in life it was created for the mere purpose of government intrusion. When stores in the 1970’s wanted to buy out of state milk because it was cheaper, there is that competition thing again, the state made up an agency to make sure that no matter where you bought the milk it would cost the consumers the same price. So instead of telling the dairy farmers to find new more efficient techniques or some other way to make their milk more competitive, we just made it so that everyone has to pay the highest price available.
So right now how much does a gallon of milk cost you in LA? According to The Advocate it’s between $4-7 a gallon. Now that means that every store has to be making at least 6% above cost or it’s illegal. Obviously some are at the 6% some are above that.
In some weird universe not connected to this one, here is what Mike Strain had to say
Strain said the regulations exist to keep the price of milk as low as possible. Allowing a supermarket to sell milk below cost could drive competitors out of business, allowing the store to then increase the price of milk, he said.
So somehow telling business what their minimum mark-up on a particular item has to be keeps the price low? We can see this isn’t working already. If it was there wouldn’t be a 3 dollar difference in the price of milk in LA alone. Every gallon of milk would cost exactly the same in every store. Of course that wouldn’t be fair, cause then someone might go out of business. If your entire business rests on the amount of milk you sell then you might want to diversify your grocery store. I’m just sayin. This law is in place to reduce efficiency and make sure everything is fair and by that they screw everyone who wants to buy milk.
Cross posted to The Handbook.