Rigged pricing. No, not British Airways or Korean Airline

You turn on your TV to learn that two major international carriers are heavily fined for fixing their ticket pricing. However there’s another illustration that should concern us more. Especially when there are millions more taxpayers driving their cars than flying to international destinations. I am referring to those who may live from month to month and closely watch their budgets.

Where is Larry going with this post?

I have just received the August 2007 issue of the Institute for Justice magazine entitled “Liberty & Law.” On pages three and 14 is a story that should make every driver’s hair stand on end. IJ Staff Attorney Bob McNamarra is challenging a law in Wisconsin to challenge price fixing from a different direction. Specifically the state MANDATING a minimum mark-up for owners of gas stations. Whatever became of the free marketplace where we engage in risk-reward decision making?
Since when is the government so concerned about our independent legitimate business operations?

Gas station owner Raj Bhandari wanted to give back to his community. He purchased a gas station in 2006 which he “brought back from the brink of bankruptcy by offering high-quality service and building strong ties with the local community.” He is barred form offering senior citizen discounts which sadly would benefit many of those living on a fixed income.

The article continues by saying “Unfortunately, the state Department of Agriculture, Trade and Consumer Protection informed Raj that he risks thousands of dollars in fines for his innovation because in Wisconsin, it is illegal to sell gasoline without a mandatory markup of between 6 percent and 9.18 percent.”

How nice. Wisc wants to protect it’s fuel sales tax and punishes a private sector entrepreneur for offering a discount on fuel. I have to wonder if they have a similar minimum for supermarkets who operate, in many cases, with only a ONE percent margin.

The Institute for Justice has stepped up to the plate and filed a law suit “urging the Wisconsin courts to protect his right to economic liberty by striking down the state’s minimum markup law. More than 30 states allow exactly the sort of competition that Wisconsin has banned, and three different supreme courts have struck down laws much like Wisconsin’s over the past 15 years.”

How ironic. That in the same day we read of price fixing by both the private and public sectors.

Question. Should any government agency price fix the sale of gasoline and diesel fuel?

About Larry Gilbert