Why, Massachusetts, is it against the law to give away milk?

Ever wonder why you never see milk truly "on sale" here in Massachusetts?

Such as, "Buy 1 gallon and get the second free!"

At our local Price Chopper, buy-one, get-one-free offers show up on many items. In summer, it's hot dogs and buns, strawberries and angel food cake, for example. And throughout the year buy-one, get-one-free offers show up on bagged lettuce, bread, and different cuts of meat.

But never milk.

The reason: They'd be breaking Massachusetts state law if they gave away milk. Or, if they sold it at any price less than cost.

An article by Bruce Mohl in this morning's Boston Globe describes the Massachusetts Department of Agricultural Resources recent enforcement efforts to require that retailers comply with a 1941 state law that keeps them from selling milk below cost.

The article notes that previous investigations were "merely responding to complaints and enforcing a law on the books."

It's not clear whether Lincoln really did say, "The best way to get a bad law repealed is to enforce it strictly."

It's the right idea, nonetheless, and now it's up to us, acting through our elected legislators, to remove this intrusion into the market--make that, the super market.

Doing so will free retailers to compete for consumer purchases, give consumers more choices, and free up resources at the Department of Agriculture.

And who do you think has been filing the complaints that the Department is then forced to investigate? Surely not consumers.

I'll bet a FOIA request (below) that it's other retailers who are abiding by the law. And who would blame them? So let's free them all to compete.

In virtually every industry manufacturers envy the channel and the channel envies the manufacturers, each thinking that it's the other guy that's getting rich without working very hard.

It's no different in the dairy business, as we read in an earlier Mohl column that described the recent run up in milk prices. It included this from Dick Kimball, owner of a 350-cow dairy in Spencer, who explained that he lost money last year but is making money now:

Kimball said he wants consumers to know that milk processors and retailers are the ones profiting from milk, a charge disputed by supermarket industry officials.

Kimball said processors and retailers maintain their profit margins as the cost of milk rises and falls. He said farmers receive less than 40 cents of every dollar consumers spend on milk.

"It used to be 50-50," he said, "but now these guys have figured out that the dairy case is one of the biggest profit centers in the store."

When's the last time you read about an LBO or big private equity deal for a milk processor? Or an IPO? Or a billionaire milk processing mogul buying a new vacation home on Martha's Vinyard or a penthouse in Manhattan?

Knowing nothing about the milk processing business, I can only conclude that either they are great at colluding and keeping quiet, and are satisfied with living very modest lifestyles, or this is yet another case in which a manufacturer is envying someone else in the channel because that guy's job looks a lot easier than his.

And supermarkets? Dispel mistaken notions of excess returns in that industry by reading any one of the many articles about the intense competition in that industry. Or in retail generally, for that matter.

If the dairy case is one of the biggest profit centers in the store, then surely changing the law and freeing retailers to compete based on this product too will give consumers more choices.

And a final note: The production, distribution, and sale of milk is tangled up in a thicket of rules and regulations, including many at the state level. If you don't believe innately in the right of individuals to free markets--insert standard qualifications here, such as adults engaging in transactions without duress--read these rules and regulations substituting the name of another product or industry, preferably one in which the benefits of intense competition are obvious to all.

More on that in a future post.

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Thanks to the Reporters Committee for a Freedom of the Press for their excellent open government guide for Massachusettes. Their easy-to-use template helped create my request below.

July 22, 2007

Massachusetts Department of Agricultural Resources
251 Causeway Street, Suite 500
Boston, MA 02114

Re: RECORDS REQUEST

Dear Records Request Officer:

Pursuant to the state open records act, I request access to and copies of all complaints made during the last five years in-person, by mail, by phone, over the Internet, and in any other manner concerning milk alleged to be sold at a price that would violate any state laws or regulations governing the price of milk in retail establishments in Massachusetts.

Please inform me of the number of complaints and fee you wish to assess for these copies so that I may remit funds to you.

If my request is denied in whole or part, please justify any deletions by reference to specific exemptions of the act.

Thank you for your help.

Sincerely,

Lee Wright