PART D THE BELOW COST STATUTE AND FAIR TRADE LAW: NEED FOR REPEAL The Commission has recommended elimination of the Below Cost Statute as it applies to milk. This recommendation is incorporated into the Milk Control Commission Bill (Exhibit 3).13 The Commission believed that total abolition of the Below Cost Statute, M.G.L.A. c.93 § 14F, as amended, or the Fair Trade Law M.G.L.A., c.93, §§ 14A-14C, as amended, was not within the power delegated to it. However, for several reasons this Commission strongly recommends that both laws be repealed. Chapter 93, section 14F, is part of the Unfair Sales Act and prohibits the below cost sale of all items. In effect, this inhibits effective competition at the retail level, due to the breadth and vagueness of its provisions and the uncertainty surrounding its enforcement. It is arguable that there was a need for this statute when it was originally conceived some 30 odd years ago. However, stimulating low cost sales will increase competition, provide the consumer with better value and generate sales and sales tax as well. Yet the retailer would still be protected from unfair sales practices by the provisions of the Consumer Protection Act, M.G.L.A. c.93, § 1 and 2. If a retailer wishes to increase competition and sales by lowering the price of his goods, there is not sound reason why he should be prohibited from doing so. Joined with the Below Cost Statute is the Fair Trade Law which allows companies to dictate the price of retail goods. Sections 14A and 14B of Chapter 93 give this practice statutory sanction. Setting minimum prices for products can only harm the consumer, by forcing him to bear the brunt of contracts made between retailers and manufacturers. The Fair Trade Law also eliminates any vestige whatsoever of competition, because it establishes price rigidity from store to store. As in the case of the Below Cost Statute, the Fair Trade Law is a creature of the depression when such steps may have been necessary in order to protect business. But with prices rising dramatically, consumers can no longer afford the luxury of these so called "protective laws", which protect business and not the consumer. Little or no negative impact would result from the abolition of this law, since it simply means that prices now frozen by manufacturers would be allowed to seek a level established by an open and fair competitive system. 13 See p. 249. The Commission strongly believes that unless this statutory Fair Trade Law, as well as any common law based fair trade laws are repealed, consumers will continue to pay excessive prices for products in the open market. It is the Commission's considered belief that the State should remove these statutory controls as soon as possible. EXHIBIT 2-FIRST QUESTIONNAIRE RULES AND PROCEDURES FOR THE USE OF CONFIDENTIAL INDIVIDUAL COMPANY DATA COLLECTED UNDER THE FOOD COMMISSION'S LINE OF BUSINESS REPORT PROGRAM Data collected under the Line of Business Report Program are gathered for the purpose of preparing statistical compilations, consistent with the confidentiality strictures contained herein. While the Commission intends to utilize tabulations of Line of Business data in the Commission Report, no individual company data contained in the Line of Business Reports will be revealed in these reports prepared by the Commission. However, these reports may be utilized in connection with any Commission investigation. The names of companies, financial data and all other information which are obtained from respondent companies are confidential, and persons authorized to have access to this information may not release, discuss or in any way provide access to such information to anyone not authorized to have access. Authorized access and use.-Access to and use of individual company data is restricted to members of the Legislative Commission on Food except that upon recommendation of the Commission, the data may be turned over to appropriate government authorities. Access by members of the Commission is authorized only during and for the purpose of electronic processing of such data. All persons having use or possession of individual company data will be personally responsible for securing the confidentiality of those data and for following the rules set forth above. Any violation of these rules, either through neglect or otherwise, will result in prosecution to the full extent of the law or any other legal action decided on by the Chairman of the Commission. |