Our View: Judge rules against gas pricing lawA federal judge last week ruled that Wisconsin’s minimum markup on gas is unconstitutional. The news could be good for consumers, but may also have a down side, especially for small-business owners – and eventually for consumers.
By: Editorial staff, Hudson Star-Observer
A federal judge last week ruled that Wisconsin’s minimum markup on gas is unconstitutional. The news could be good for consumers, but may also have a down side, especially for small-business owners – and eventually for consumers.
Wisconsin law makes it illegal for retailers to sell gasoline without marking it up either 6 percent over what they pay or 9.18 percent over the average wholesale price, whichever is higher. The law was passed in 1939 with the intention of guaranteeing fair competition. In theory, it’s intended to prevent large gas retailers from marking gas down to drive smaller competitors out of business.
An out-of-state corporation that runs travel plazas in Black River Falls and Oak Creek sued last year in an attempt to make the state stop enforcing the law. Rudolph T. Randa, chief judge for the Eastern District of Wisconsin, issued the ruling last Thursday. He said the 70-year-old law violates prohibitions against restraint of trade.
The minimum markup law has been a point of discussion for many years. Critics claim it inflates the price of gas – supporters claim it keeps the little guy in business.
Matt Hauser, president of the Wisconsin Petroleum Marketers and Convenience Store Association, said he was disappointed in the ruling. He said the ruling threatens more than 1,400 gas stations with independent owners in the state of Wisconsin. In fact, he claims that if the independents are crowded out of business, competition could be reduced and prices could eventually climb.
In Hudson, we’re aware of only one independent service station – Mike’s Standard on Coulee Road. He’s not sure how a possible change in the law will impact his business. He, like many independent owners across the state, claim the law hasn’t been enforced anyway. One state gas station owner said that he has owned a station since the 1960s and has never had anyone check his prices against invoices for gas.
Yet, in a business where pennies can make a difference, it could have an impact. Hauser posed the question, “Are Wisconsin consumers better off with more stations or less stations?”
The attorney general’s office is reviewing the ruling and has yet to decide whether it’ll appeal or request to stay the decision. We may not have seen the final chapter of the story.
If the gas ruling stands, however, it will likely have an impact on some other products in the state that face similar minimum markup laws. This could be one to watch.