New Minnesota Laws Allow Retailers to Offer Discounts on Gasoline and Dairy Sales

ST. PAUL, Minn.—Minnesotans could see prices for gasoline and dairy fall after two measures to eliminate minimum price requirements were signed into law by Gov. Tim Walz. The bipartisan bills were part of the larger Omnibus Commerce Appropriations Bill and Omnibus Agriculture Bill. The Institute for Justice (IJ) testified in support of the bills and applauds the signing.

“Minimum markup laws are the result of outsized influence from special interests with a direct stake in keeping higher prices in place, no matter how much they hurt consumers and businesses,” said Meagan Forbes, IJ Director of Legislation and Senior Legislative Counsel. “As the Federal Trade Commission has long recognized, these laws protect individual competitors, not competition, and discourage pro-competitive price-cutting. These reforms will give businesses more flexibility with pricing and will help consumers at a time when many families are struggling with rising costs.”

Minimum markup laws prohibit retailers from pricing their product below a state-mandated floor. Under Minnesota’s law, gas stations were forced to sell gas for 8 cents more than what they paid for it. Following the change in Minnesota, only seven states will continue to impose a minimum markup on selling gas. State law also prohibited retailers from selling dairy products like milk, yogurt and cottage cheese below cost except for one month per year—June, national dairy month.

While proponents of minimum markup laws argue that they benefit small businesses, a 2017 study found that minimum markup laws have had “no effect” on the number of gas stations in a state. Nor did the study find any “evidence whatsoever that retailer attrition has been any different in the states with such laws.” The study concluded that “artificially inflating prices has not saved ‘mom and pop’ retailers.”