Case Name: Krist Oil Company, et al. v. State of Wisconsin, et al.
Type of Case: Economic liberty
Court: Vilas County Circuit Court
Case Number: 2016-CV-117
Current Status: Complaint filed and answered; Wisconsin Petroleum Marketers & Convenience Store Association intervened; Stayed pending Highland Memorial v. Wisconsin
Wisconsin’s Unfair Sales Act (often called the “Minimum Markup Law”) is an outdated relic from a time when people believed price controls were a necessary tool for governments to use to manipulate markets. Our economic understanding has moved past such concepts, however, and its time our laws reflected that.
The Minimum Markup Law prohibits retailers around the state from selling products below an arbitrarily-defined “cost,” with limited exceptions. Beyond that, it also requires a certain markup above cost for certain products: 6% for alcohol and tobacco, and 9.18% for gasoline. In effect, it places a hidden tax on consumers, and unlike a normal tax (which pays for roads, schools, etc.), this tax just goes straight into the pockets of business owners as a guaranteed profit.
The Minimum Markup Law is anti-competitive and harms the very consumers it is supposed to protect. The law lacks any rational basis, as the evidence shows it not only fails to achieve its ostensible goals, it actively works against them. On behalf of an independent gas station owner and a northern Wisconsin consumer, we sued the state to have the law declared unconstitutional. The Wisconsin Petroleum Marketers & Convenience Store Association has intervened to defend the law.
The case has been stayed pending the outcome in Highland Memorial v. Wisconsin, another economic liberty case, which is currently being heard by the Wisconsin Supreme Court.