Wisconsin Law Encourages Competition While Raising Gas Prices
Wisconsin Law Encourages Competition While Raising Gas Prices Save Email Print
Posted: 8:12 PM Jul 29, 2008
Last Updated: 8:49 PM Jul 29, 2008
Reporter: Megan Peterson
Email Address: megan.peterson@weau.com

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With high gas prices on everyone's mind anything that adds to the price doesn't make drivers happy. One Wisconsin law technically called the unfair sale act or what most people know it as: the minimum markup law.

It’s a law requiring gas stations to add on about $.30 to every gallon of gas they sell.
Tacking on that extra $.30 to already expensive gas makes the act seems like a bad idea.

But two local representatives say the unfair sales law is important and needed. Most people seem to be in agreement that something needs to be done to lower gas prices.

People we talked to said, "It's harder to make ends meet."
"With getting to work and gas prices and everything else it really cuts in to family fun time."
"We have to drill and we need alternative energy sources. It's that simple."

Republican Representative Terry Moulton agrees. He says he’s all for lowering gas prices. But he says keeping this act in place helps consumers more than it hinders them because it creates competition and prevents a big business from taking over.

He says big businesses would use it as a loss leader item and try to attract people to them. Meanwhile the small mom and pop stores around have to go out of business because they just can't keep up with that kind of competition. He says pretty soon they would control the marketplace.

The law mandates a 9.18% markup on gas in Wisconsin. As the wholesale price of gas increases so does the mark up percentage. In the past year the markup price per gallon of gas increased 44% since the wholesale price has been continually rising.

The unfair sale act used to also include grocery stores that had to add a specified amount to their products. That portion of the law was removed in 1986. Democratic Representative Jeff Smith thinks that was a big mistake.

Smith says, “Where are all the local grocery stores now? They're gone. Very rare to see. There is probably one mom and pop grocery store left in Eau Claire and that is precisely why it happened."

Smith says he doesn't want the same thing to happen to small business gas stations too. He thinks instead of getting rid of the law, solutions should be found to the rising gas prices.

Smith and Moulton both suggest more competition between oil companies and the use of more alternative sources to fuel. Smith also thinks setting a level of about $ .20 instead of allowing the percentage to increase with rising gas prices would be another idea to think about.

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Posted by: James Location: Eau Claire on Jul 30, 2008 at 08:39 AM
I agree with "retired". I'm glad we have the State of Wisconsin protecting us from low prices. I don't know about anyone else, but I hate it when I get a good deal. I understand and appreciate the "spirit" of the law; however, the "unfair markup law" is truely just unfair to the consumer forcing us to pay higher prices than we should. Personally, I love going into the smaller stores. The personal service and attention to detail are unsurpassed in the "mom and pop" stores. Have you tried getting through a Wal-Mart checkout lately?? Plan an extra 10-15 minutes on your shopping trip! Let's drop this goofy law and give the people of Wisconsin the chance to pay what we should for the products and service we want, not what the government tells us we should pay!

Posted by: Pat Location: Star Prairie on Jul 29, 2008 at 10:14 PM
Why tell only half a story? How do you account for the "Mom and Pop" gas stations surviving in other states that do not have a minimum mark up laws? I moved back to Wisconsin from Alabama and you could find a 10-15 cent per gallon difference in gas stations across the street from each other. The independent stations were cheaper, the major brands cost more but they do have brand loyal customers that are willing to pay more for their gas. The minimum mark up laws also save us poor Wisconsin residents from being taken advantage of with lower prices during the Christmas sale season. It's funny that on Black Friday, the stores in Minnesota are cheaper than here in Wisconsin, and we're supposed to be thankful that there are laws to protect us from cheaper gas and other goods. Do us a favor and investigate and tell the little folks "The Rest Of The Story"

Posted by: Retired Location: Eau Claire on Jul 29, 2008 at 09:44 PM
I feel lucky we have the State of Wisconsin protecting us from low prices. As an example, last week WalMart had a laptop computer on the front page of their advertiser for $398. That was for the rest of the country, here in Wisconsin same flyer, same computer but it was on sale for $494. The flyer also had school supplies that were much higher in the Wisconsin flyer. Who can we thank for this kind of protection provided by the minimum markup law?