Regulators from the Massachusetts Department of Agricultural Resources zealously enforce a 1941 law that prohibits retailers from selling milk below cost. The law was originally intended to help level the playing the field between small stores and large chains, but now serves to keep the price of milk artificially high. Just last week, state regulators asked the Market Basket supermarket chain why they were selling milk for only $2.59 per gallon. From the Boston Globe:
David McLean, operations manager for the Tewksbury-based chain, said the company would be adjusting its price upward to $2.89 a gallon and may go even higher this week when wholesale prices are scheduled to rise.
“We will be making an adjustment,” he said. “Naturally, we respect what the regulations are.”
McLean declined to say what Market Basket was paying for the milk it sells. The third-largest supermarket chain in Greater Boston by sales volume, it has a reputation for low prices.
Have a heart, Massachusetts regulators. Though milk helps to drive retail sales, protecting consumers by demanding high prices is counterintuitive.