Group challenges Wisconsin’s minimum markup law

Says gas, alcohol and tobacco pricing unfair

A lawsuit filed Monday against the State of Wisconsin challenges the constitutionality of Wisconsin’s minimum markup law.

The Milwaukee-based Wisconsin Institute for Law & Liberty filed the suit in Vilas County Circuit Court on behalf of Iron River, Michigan-based Krist Oil Co. and Green Bay resident Robert Lotto. Krist operates convenience stores and gas stations in northern Wisconsin and Michigan’s Upper Peninsula. Lotto regularly buys gas in the Green Bay area.

The minimum markup law, or Unfair Sales Act, regulates the sale of alcohol, tobacco and motor fuel. These products must be marked up 3 percent on wholesale transactions, 6 percent on alcohol and tobacco retail sales and 9.18 percent for motor fuel retail sales. In addition, retailers may not sell any products below cost.

WILL asserts the law is unfair to consumers who must pay the higher prices and the businesses that must charge those prices.

“This lawsuit seeks to vindicate the right of Wisconsin businesses to serve their customers free of anticompetitive, arbitrary and irrational government regulation,” the complaint reads. “In effect, the minimum markup law places a hidden tax on all Wisconsin consumers. And unlike normal taxes, which at least in theory are spent by the government in ways that benefit the public as a whole, this hidden tax goes straight into the pockets of businesses in the form of a guaranteed profit over their costs, regardless of their ability to run their businesses efficiently. It represents nothing more than a transfer of wealth from consumers to business owners who are not forced to compete for business.”

The Wisconsin Department of Justice declined to comment on the case.

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Molly Dill, former BizTimes Milwaukee managing editor.

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