Louisiana stops sale of cheap milk at market
A Louisiana supermarket was forced to yank its low-cost milk special after state auditors objected to the price.
Fresh Markets in Perkins Rowe was selling milk for $2.99 a gallon as part of a weekly promotion deal, but Louisiana requires that retailer markups be at least 6 percent above invoice and shipping costs, The Advocate reports.
Me Anti dumping measure.
Her Yeah but seriously how much markup they have to have? Price controls ...
Me 6% it says. What, that's unreasonable ?
Her Well what ever happened to free markets?
Me Hon, you understand what dumping is ?
Her Yes of course, but seriously why does the gov need to get in your business if you want to have a sale? Once upon a time there were gas wars, it was great fun, every station along the road each trying to charge a penny less per gallon ..
Me Well the theory behind it is this : without dumping, economy is a competition on operational costs. Whoever can make the product cheaper wins the market. With dumping, economy moves from an operational competition to a financial competition : whoever has the largest bank account or the best credit can sell his product for 0 for longer, thus driving everyone out of business, thus acquiring a monopoly, thus then being able to sell the item for infinity. It can be said, and I happen to think that the point of economy is to close the zero-infinity price window on everything as soon as possible. In this perspective, dumping is an antieconomic activity.
Her Yeah well monopolies are illegal, this is trying to hit it from both ends which is stupid.
Me Since it is the job of the state to maintain the standards of the marketplace (not participate in buying and selling, but keeping the standard of what 1 kg is, for instance), then the state has to intervene against dumping. Otherwise the marketplace quickly devolves into Joe paying an envelope into which he might have put some dollars for a sack in which Bill may have put some potatoes. This isn't a free market by any standard, as it's not in fact a market at all.
Her Well a special on milk once a week, with a limit don't sound like dumping.
Me Why not ?
Her What's it gonna do, run the dairy farmers outta business? Close down every other supermarket?
Her And who decided I have to make 6% on all my milk sales? What if I only want 5%. There just needs some better sense on this sort of stuff.
Me Listen : people can readily limit their milk buying to once a week. If you're allowed to dump once a week that's all you need. Everyone gets into the habit of driving to your store once a week, they make their week around it. Soon enough nobody else can sell any milk. You don't need to actively gain 100% of the market. If you just drop everyone else's volumes enough they will have to discontinue 'cause they can't cover fixed costs anymore, and there you have it. This is the economic equivalent of what's called splitting the vote in politics.
Her Mebbe but it sure sounds like a big step on the road to price controls to me.
Me Why ? It's a % not an absolute. You have to charge at least 106% of what your invoices say.
Her Hmm ok, but there is something wrong with the picture. I'll figure it out :P
Me Hehe. I think I'ma publish this, give everyone a chance.
So here's your chance.