New York City: 86% Of Milk Sellers Are Price-Gouging Customers

Sorry New Yorkers, but according to the City Council, you’re overpaying for both rent and milk. Anyone charging more than $3.93 for a gallon—86% of the city’s milk sellers, from bodegas to Whole Foods—is violating the state’s milk price-gouging law.

Consumers are gouged an extra $0.40 on average.

“My little girl drinks between two and three gallons of milk a week,” said Queens Democratic Councilman Eric Gioia. “And when you’re being overcharged 40, 50 cents per gallon — I’m going to be okay, but there are a lot of families, if you’ve got a number of kids, that it can be really difficult.”

If you’re thinking “$0.40? That’s nothing!,” you’re not alone. Potential mayoral candidate and supermarket billionaire John Catsimatidis also supports gouging local business:

“The supermarket business is a dying breed in the New York area,” Catsimatidis told amNewYork. “Fifty percent of the supermarkets in New York City have gone out of business in the last 6 or 7 years because they didn’t charge enough.”

“[Speaker] Quinn should take Economics 101. It’s inexcusable that an official of the city of New York would just try to panic people.”

He’s right, you shouldn’t panic. If you see a grocer selling milk for more than $3.93 a gallon, or $2.01 per half gallon, call the state’s special anti-price-gouging hotline, at (800) 554-4501.

Report: Majority of Sellers in City Are Overcharging for Milk [The New York Sun]
Catsimatidis Sour On Quinn Milk Report [The Daily News]
(Photo: Getty)


Edit Your Comment

  1. jpx72x says:

    The stores will just raise the price on other goods. . .

  2. bcsus83 says:

    I agree w/ jpx72x on this one…ok so report them for price gouging on milk. Next week that box of cereal will be $5.50 instead of $4.50. And that steak you like? It’ll be $15 for a package instead of $12. The loaf of bread you use to make sandwiches? $3.50 instead of $2.25.

    My kids drink on average one gallon of milk a day. The cost of milk really adds up around here, but a whopping 40-cent difference in price isn’t going to make me shop somewhere else, or throw a hissy fit about it and scream ‘gouging!!’.

    Believe me, I’ll scream about something important that really makes a huge difference in my budget first–like the cost of gas. ;) It’s now cheaper to buy a gallon of milk than a gallon of gas. THAT is sad.

  3. I see your standpoint, jpx72x, and I agree. I think people get mad looking at the long run, though. Buying a gallon of milk every other day, that extra .40-.50 cents can add up to nearly 50 dollars a year. Some families just don’t have that much money to spare at all.

  4. timmus says:

    Does the state even have any teeth?

  5. Keavy_Rain says:

    So how exactly are consumers being “price gouged” here? Who determines the fair price for a gallon of milk in New York?

    You’d think supply and demand would set prices, but it is an election year and we gotta detract the masses from the important issues with stupid stuff like this.

  6. czarandy says:

    Next month on Consumerist:
    Milk shortages hit New York City

  7. taney71 says:

    Have price controls ever worked. Let the market determine the price. Aside from getting rid of this silly law lets push Congress to stop passing those farms bills that really do hurt our pocketbooks. Talk about something that actually does screw us at both ends. First out tax dollars go to big farmers and then we end up paying more for the food they produce. Ugh.

  8. balthisar says:

    Don’t like the price, go to one of the 14% of stores that aren’t “gouging” their customers. Why isn’t the price that the store owners paying shown here? Maybe the distributor is gouging. Trace it back to the cow; maybe Bessy is withholding in hopes of getting better alfalfa to cud on.

  9. sven.kirk says:

    How does the customer know they are being gouged in the first place, for any product?

  10. punkrawka says:

    Glad to see that Consumerist commenters have some understanding of economics, even if Consumerist editors don’t.

  11. madanthony says:

    I was an econ minor in college, so my reaction to price controls is “that’s never a good idea”.

    Even by price control standards, the NY one sounds bad.. It says it’s recalculated monthly. A lot can happen in a month, and it seems like there’s a good chance that the cost of milk could go up in 3 weeks to the point where the maximum price is lower than the cost of production/wholesale cost – which means either the store violates the law, loses money on every unit it sells, or stops selling milk…

  12. If you think that $3.93 is bad for a gallon of milk…
    Try lactaid milk! $3.93 for a half gallon! Isn’t that horrible now?

  13. Preyfar says:

    Milk prices aren’t that much different in Pennsylvania, either. Frankly, I think we’re feeling a lot of the burn from the ever rising price of diesel (amongst other gas). Everything is just more expensive.

  14. Lets also consider that rents/cost for business in the city are more then for those elsewhere in the state. So that $3.93 price restriction on milk statewide may mean a profit of $.20 for a supermarket in Albany, but a loss for a corner market in Manhattan.

  15. RetailGuy83 says:

    Why not margin controls? On Store Brand Milk, Bread, Butter, and Canned Goods – 5%. On National Brand – 8%.

    Or make it go all the way through the supply chain. From Cow to Shelf nore more than a net 20% margin on the raw price and expenses.

  16. maztec says:

    I’m sorry, but his daughter drinks HOW MUCH MILK?!?


    Even for a growing kid that is a LOT of cow milk.


  17. DeltaPurser says:

    @Keavy_Rain: Very well put!

  18. Conan the Electrician says:

    When almost all the milk retailers are charging the higher “gouging” price, you would think that’s because the market costs of the milk inputs overall have risen, and not because any single retailer is trying to make a quick buck.

    Why doesn’t NY state just set fixed prices for everything, in order to join the great consumer paradises of North Korea, Zimbabwe and Venezuela. Let me know how that works out.

  19. TheUncleBob says:

    Someone asked, and I’d like to ask again… how does one determine the “fair market price” of a product, and how does one go about determining at what price people are being “gouged”?

  20. richcreamerybutter says:

    When you commit to the one brand of milk from grass-fed cows, it doesn’t really make a difference. That said, I think a lot of non-NYers don’t understand that simply “going elsewhere” might involve walking 2 or 3 blocks for whatever place charges the least for whatever product.

    It’s not unusual to make a few stops to get everything you need, walking and carrying groceries for the entire trip. However, it’s also a factor in why we’re in better shape than the average Middle American. :)

  21. smartmuffin says:

    @dabusdriver: hail comrade!

  22. laserjobs says:

    Other mammals secretions, probably not the best thing we should be consuming. Don’t we stop drinking milk after weening?

  23. NoStyle says:

    If they have price gouging laws that cover milk, why not gas?

  24. Scuba Steve says:

    Sometimes I’m happy I’m lactose Intolerant.

    //Drinks 3 gallons of iced tea a week, no problem.

  25. richcreamerybutter says:

    @laserjobs: I’m surprised at the tardiness of this sentiment.

  26. rdldr1 says:

    @Scuba Steve: I am too, but enjoy lactose free milk. For some reason it lasts 2-3x longer than regular milk.

    BTW: I think New York City milk sellers are charging more for the growth hormones they put in the milk.

    *oh noes the milk industry is now going to sue me!!!*

  27. “17-year-old milk price-gouging law regulates the price of milk based on the size of the retailer and costs of production, among other factors. The price threshold is recalibrated monthly: This month, it is $3.93 for a gallon, $2.01 for a half-gallon, and $1.04 for a quart”

    That $3.93 is most likely the price that can be charged by a high volume store, which means a low volume can legally charge more.

    A gas regulation would work the same way, which means we would pay the same prices that we currently pay (unless the local mom&pop corner gas station is gouging).

  28. goodcow says:

    $3.99/half gallon of organic milk on 77th/1st.

  29. NoStyle says:

    Aren’t the oil companies making up BS about their production costs, saying they have to charge more now to offset future costs, based on a lot of what-if stuff that is pretty flimsy?

  30. huadpe says:

    @RetailGuy83: Maximizing the profit margin does several bad things.

    First, and biggest, is it changes the capitalist incentive from being the most, to being the least expensive. If I get more efficient at making milk, my profits go DOWN. Example: Let’s say I produce milk at 2000 gal/week for $1.50/gal costs. If I make 10% max profit, I can charge $1.65/gal for that milk, $.15/gal profit. If I reduce that to producing at $1.20/gal, I can charge $1.32/gallon, a profit of $.12/gallon. In the current market, If I reduced my costs, my profits would go up. Under your proposal, they go down. If every producer has an incentive to be LESS efficient, just wait for prices to skyrocket.

    The second reason percentage limits are bad is fraud. If I can lie about my costs and inflate them, and then make that pure profit. All price control systems generate fraud and black markets if they’re strongly restrictive.

  31. opsomath says:

    if there is a black market on milk…something is very, very wrong.

  32. opsomath says:

    but “86% of milk sellers are price-gouging?” that makes as much sense as “all our children are above average.”

  33. RetailGuy83 says:

    @huadpe: Thats a fair point. But barring collusion (which puts this example in lala land), the margin cap system would really allow the market to determine the price. Sure, you may make $.03 more a gallon because your costs are higher, but if you sell less milk then your gross revenue and gross profit dollars are less.

    Fraud I can definately see as an issue, but man if you ever got caught you could just hang the closed sign out front and go home forever.

  34. VikingP77 says:

    Thankfully I don’t have that milk consuming ex of mine anymore! I drink soy…it lasts a long time too. Milk is gross!!!

  35. More than $3.93 is price-gouging in NY?

    Hell, I’ve been paying nearly $4.50/gallon here in Jersey for the past few months. They’re getting off light.

  36. BrianU says:

    Growing up in Pennsylvania, I was aware of the PMMB, Pennsylvania Milk Marketing Board.
    There was so much milk produced that the price that dairy farmers received very low – too low for a small farmer to make a living even if they had what seems like millions of gallons of milk output. They would often spray field with their milk, or just dump it ( when TV cameras were present )to keep so much of it from going to market in an attempt to keep supply down and prices up. For better or worse, milk wasn’t a strictly supply and demand, let the consumer decide, type pricing model. In my 40+ years I have never heard any other PA resident ever mention the PMMB. You may want to check your own state, and local family dairyman before jumping to any conclusions or conspiracy theories.

  37. plasticredtophat says:

    Wow 4 bucks for milk! That sucks, I pay 2.80 here in good ol’ New Hampshire.

  38. snakeskin33 says:

    I really wish inflammatory words like “gouging” could be reserved for actual gouging, which I personally associate with unethical attempts to inflate profits in a situation like a natural disaster or a sudden supply crisis.

    This is simply a discovery that a price-fixing law — which most people wouldn’t even support if they understood it — is going unenforced across the state. And it’s probably going unenforced because the relevant enforcement agencies are well aware that the law does nothing for anyone and therefore is a terrible choice of priority if you have limited enforcement resources.

    An agency employee sent to enforce a price-fixing law is an agency employee not spending her time enforcing laws that actually have consumer protection benefits. It’s not enforced, everyone knows it’s not enforced, it wouldn’t make a lick of sense to enforce it, and everyone involved knows it. Chest-pounding about this is no different from the dumb “gas-tax holiday” proposals — an example of a politician trying to make it sound like he’s doing something to help families when, in fact, he is not. The actual pro-consumer position here, in my opinion, is “Here is another stupid publicity stunt masquerading as actual action on the struggling economy.”

    (And, seriously, if your kid is consuming five cups of milk a day, you have an unhealthy relationship with the milk industry to begin with. Not really the point, but still true.)

  39. wooogie says:

    so does this price limit apply only to regular milk? what about organic milk?

  40. MaliBoo Radley says:

    I don’t understand. Do kids really need to drink milk at all? I mean, will they get sick, wither and die without it?

    When I was a child, my family probably went through a half gallon a week. I only put it in my cereal. I drank far more juice and water than milk.

    Maybe the milk lobby needs to be seriously curtailed. No more “got milk” adverts. This 2-4 gallons a week seems insane.

  41. MBZ321 says:

    I would definitely not call charging 50 cents or more over “gouging”, but I guess NY has some crazy laws. In PA, we have a state minimum price…stores can charge whatever they want, but not below a certain amount. A few PA chains as well as Walgreens etc.. sell milk at minimum as a “loss” leader (or “break even” leader I guess) to get in traffic.

  42. bunjyzeke says:

    Are all of our Consumerist commentators laboring under the delusion that we live in a free market, where supply and demand actually determine prices? Someone was asleep in class…

    The farm bill repassed this week contains the following, among other provisions:

    About $40 billion for farm subsidies, and almost $30 billion will go to farmers to idle their land and for other environmental programs.

    Increases subsidies for some crops and provide more dollars for growers of fresh fruits and vegetables.

    Expansion of dairy subsidy programs.

    We don’t have a free market: we have welfare for corporations and powerful interests….wake up and smell the sour milk.

  43. @goodcow:
    Please tell me you are not complaining about the price of organic milk- if you are, that’s pretty silly. You don’t need to drink organic milk, and honestly it is a complete waste of money. Organics are not healthier than conventional foods. You are choosing to pay a premium for a product that is honestly only good for sucking money out of your wallet.
    I for one have a reason to complain about the price of milk- I have no other choice than to buy lactaid free milk a $4+ dollars a half gallon. You can go and buy normal milk at that price for a gallon a be fine. There is no need whatsoever to buy organic milk.

  44. taney71 says:

    @bunjyzeke: I believe I mentioned the farm bill in my first post.

    Anyhow, of course there is welfare given to corporations, but there is almost welfare being given to individuals. The question is which is worse? I think both are. And we’ll have more welfare and big government once Obama gets elected, but thats another topic.

  45. taney71 says:


  46. Kevin Cotter says:


    Most of the over-hyped working poor in this nation have cars, color televisions, and cell phones. If the 50 cents every other day hurts, have them cut back on cigarettes.


    The gas companies aren’t gouging us that bad either. Trent at The Simple Dollar has his take on Massive Oil Company Profits, and puts it into perspective. A good read…


    (fifth question down)

  47. goodcow says:

    @triscuitbiscuit: I wasn’t complaining, for organic milk that’s cheap. The main supermarkets in Manhattan (Gristedes, D’AG) are complete rape when it comes to pricing. The family owned Russian health food/organic store I shop at has amazing pricing.

    As for organic stuff not being healthier, that’s debatable, and the benefits vary depending on product. For dairy though, which is pumped full of anti-biotics and growth hormones, it does make a big difference.

  48. czarandy says:

    @bunjyzeke: Yes, our subsidies to farmers are a travesty, and I fully support eliminating them. Unfortunately, because of the way democracy works it’s unlikely that this will happen anytime soon. The individuals that benefit (farmers) have too much incentive to spend all their efforts lobbying, while those that are hurt (consumers) are hurt so little that we don’t really care.

  49. czarandy says:

    @goodcow: See this page: []

    “Both organic milk and regular milk are natural and pure. Stringent government standards that include testing all types of milk for antibiotic and pesticide residues ensure that both organic milk and regular milk are wholesome, safe and nutritious.”

  50. LosersHaveCreditCardDebt says:

    Nanny State leaders in New York have never heard of captialism and supply and demand.

  51. Angryrider says:

    Wait? $2.01 is price gouging? I pay $2.15 for my homogenized and pasteurized w/o hormones. And I’ve been doing this since the eggs have gone up.

  52. For that say price controls are a bad idea…

    …why do people keep believing this? Everytime, every single time we deregulate markets, the result is a fucking disaster. How did deregulating energy work out?

    Can you say Enron? Can you say rolling blackouts?

    How did loosening the regulations on mortgages work out? Can you say “recession?” Can you say “more federal bailouts to come?”

  53. And FYI, the NY law is not a price fixing law. It is an law to stop unconscionable prices on a food necessity.

    Nobody is losing money on $3.93 cents per gallon of milk. Far from it.

    But don’t let me stop you. Keep arguing for things that make your quality of life worse, your dollar worth less and your work hours longer. Long live Milton Friedman, Ayn Rand and Amity Shales! Hooray for being convinced to argue against your own self-interest!

  54. Oops, forgot to close out the bolding. Wish this site had an edit function…

  55. jpx72x says:

    @twophrasebark: Milk is not a necessity. It makes kids fat. Having milk in school lunch programs and available in public assistance programs isn’t because milk is good for kids; it’s included in these programs because it’s good for farmers who lobby for these things.

  56. BeastMasterJ says:
  57. lockdog says:

    @twophrasebark: Finally someone said it! Most of these laws are fairly old and only regulate the prices of milk and bread. They were written to protect poor children from malnutrition. At the very least families could afford to feed their children. The fact that 86% of stores are ignoring this law is a good sign that we don’t need it anymore. The fact that it is making the news may be a sign that this is changing.

  58. Thorny says:

    In Hawaii, there’s a store where the milk was $9.09 for 2%. The sale price on the other milk got as low as $5.15. Such a deal!

  59. lockdog says:

    @jpx72x: When these laws were made we didn’t have year-round transcontinental shipping of produce or junk food. Milk and bread were, and for the very poor still are staples. If bunker fuel and corn prices keep going up obesity is going to start being a lot less of a problem. for a totally off topic half baked conspiracy theory: This whole ethanol thing isn’t about energy independence, it really is about driving up food prices, but not for us, but for any state that could be considered an enemy or competitor. After all, China and most oil producing countries have no where near enough arable land, while the US, even if we had to seriously limit our use of oil based fertilizers we would still be the bread basket of the world. Its a tit for tat, “you take our oil, we’ll take you food,” brinkmanship game.

  60. Pinhedd says:

    Where are these numbers comming from? I run the dairy at my grocery store (handle all orders, etc…) and we sell a 4 Litre bag of milk for $4.49 (CAD) but the bags cost us a little over 5 dollars each.

  61. keenconsumerist says:

    Thank you guys for highlighting the law… Because Milk prices are way inflated around th brooklyn area. It has gotten so bad that I was induced to switch to Soy milk [Vanilla :) ] which is way better for you. It seemed a way better choice since the prices are becoming quite similar! I have seen prices from $4.50 – $5.50 in some areas… Price Gouging .. only for those who are not aware of the law!

  62. I can understand the economic argument. But if the law is on the books, it needs to be enforced. We shouldn’t pick and choose which laws to enforce based on the whim of who’s in power (I’m looking at you and your signing statements, W.).

    So the argument should be that this law should be repealed and I might agree with that. But that’d be next to impossible right now.

    @lockdog: The article says the law is only 17 years old. If it was “necessary” in the early 90s, then I imagine the people who wrote it think it’s necessary now.

  63. @Kevin Cotter: Please excuse me while I pat myself on the back for making the exact same argument three days earlier (more or less) about the oil companies that Trent made, even down to the McDonald’s comparison. It is a good thing to think about when you hear “windfall” profits.

  64. Lambasted says:

    @taney71: Have price controls ever worked. Let the market determine the price.

    I am sure many living in rent controlled NY apartments would disagree.

    Laissez-faire policies work better with luxuries but not with necessities. When people have no choice but to buy the product or few alternatives exist, supply and demand economics is a tad bit difficult to rely upon. That’s why we have antitrust and collusion laws to prevent companies for setting artificially high market prices.

    I am sure we were all grateful when the government stepped in and broke up Ma Bell, resulting in competition that subsequently lowered prices for all of us. The market didn’t work until government forced it to work. Comcast is the same way. Corporate bully who cannot be trusted with marketplace economics; it owns too great of a share.

  65. If someone charges too much at their store, then people can go to another store. The government has no place telling someone how to run a business. I can’t wait ’til Ron Paul fixes nonsense like this.

  66. Erwos says:

    @Lambasted: Yes, but then you run into the problem of just defining everything as a necessity. Truthfully, there are very few necessities, and milk probably isn’t one of them.

  67. Skankingmike says:

    being lactose intollarant. I drink Lactaid milk (I absolutely hate SOy + soy has similar effects that milk does with me) and i wish i could pay 3.99 for a gallon of milk :-p

    I pay 3.99 for a half gallon of milk. A gallon is something like 6 bucks and most places don’t carry it.

  68. snakeskin33 says:

    I agree, in theory, that laws that will not be enforced should not be passed. Absolutely true.

    But the fact of the matter is that choosing what to enforce and what not to enforce is the only way enforcement agencies survive. Every police department does it, every health department does it, every school district does it, and every regulator of anything does it.

    The philosophical point that it would be better to instantly repeal anything we decide we don’t need anymore is spot-on, but that isn’t what happens, and if we paused every legislative session to argue and pass those repeals and limitations, government would grind to a halt.

    What happens is that unnecessary laws and edges of laws simply fall into disuse, as this law has, until someone decides to try to raise them from the dead for reasons of his own. The lack of enforcement isn’t philosophically ideal and has problems of its own as far as oversight, but going for by-the-books enforcement isn’t ideal either. It’s a zero-sum game — if they go after this more, they go after other things less. Milk-price enforcers do not materialize; they are pulled from other work.

    This is not something I would support diverting any resources to, because I firmly believe it would only cause other prices to go up, and nobody would benefit. I support lots (and lots) of kinds of regulation, but I don’t think this does much for anybody.

  69. AustinTXProgrammer says:

    I think most retailers that are charging more should sell off their stock, and refuse to carry the milk if they can’t charge a market price for it.

  70. @ConsequencesIX: If someone charges too much at their store, then people can go to another store.

    8 out of 9 stores are charging too much. So, what, they can go to 7 more stores until they find the one that’s following the law?

    Ron Paul wouldn’t do anything about this. It’s wholly within the right of the city to have the ordinance. It’d be unconstitutional for the federal government to do something.

    If you don’t like the laws of New York City, then you can go to another city.

  71. nopricecontrols1 says:

    I hope all NYC retailers rebel by refusing to sell milk — make everyone go to NJ. Price controls is not the business of government.

  72. BrianU says:

    @Kevin Cotter: Where I live, and I suspect most places, a car is a necessity. You can’t go to work, medical or other appointments, grocery shopping, etc. without one. Try applying for a job, or interviewing for one and bring up the fact that you have to catch a bus – which are few and far between here. And if one is within striking distance of paying off a car, or actually having paid off a good and reliable vehicle, it doesn’t make much sense to “trade down” to a beater with a new set of payments and/or higher maintenance bills just so one can look poorer to avoid criticisms from people like you. I’m guessing either you have never walked a mile in he shoes of the working poor, or you have a very inflated view of yourself and the obstacles you overcame.

  73. sodden says:

    1 gallon = 16 cups, so 2-3 gallons is about 2.5*16, or 40 cups. Figure a tall glass of milk (2 cups) in the morning, and a cup of milk in cereal, then another glass after school and one during dinner. That’s 7 cups of milk a day. That’s almost half a gallon right there.

    2-3 gallons a week really isn’t that much, especially if the parents drink some, or use some in cooking.

    Sure, lots of people say drinking milk is bad for you, but there are lots that disagree.

  74. sodden says:

    @Michael Belisle:
    “Ron Paul wouldn’t do anything about this. It’s wholly within the right of the city to have the ordinance. It’d be unconstitutional for the federal government to do something.

    If you don’t like the laws of New York City, then you can go to another city. “

    Ron Paul wouldn’t do anything about it, other than to recommend that NY move away from price controls, unless he moved to NY and became mayor. Then he’d work to eliminate price controls on everything.

    Actually, the price controls in NY don’t really work. Sure, many renters are really low rent, but it also means they can’t move without seeing a huge increase. Are the landlords taxes kept to a low too or do their expenses go up? Rent control also makes it a less attractive area to build new rental apartments, which means finding an apartment in a rent controlled neighborhood is near impossible.

  75. sodden says:


    “…why do people keep believing this? Everytime, every single time we deregulate markets, the result is a fucking disaster. How did deregulating energy work out?”

    Hardly. Enron itself is a good example of what SHOULD happen to a badly run company that commits fraud. Sure, the investors and employees lost out, but that happens to any business that goes bankrupt. Should we regulate grocery stores and pizza places so that they don’t go out of business too?

    The problem isn’t deregulation, it’s corporatism.

  76. @sodden: sadly, Ron Paul can’t be mayor of every city in the country. He’s running for president and he believes in the rights of states to set their own laws.

    I don’t think a city with the density and population of New York City could function if it was ran by libertarians. It works out to about 1000 square feet of land per resident. What you do in your 2 centiacres definitely affects the people around you. If you take out all the rules, then organized crime, for example, will enforce their own.

  77. ianmac47 says:

    If the city wants to control expenses, perhaps its time consider a new rent stabilization law; we can do without milk, we can’t do without affordable housing.

  78. JollyJumjuck says:

    @NoStyle: “If they have price gouging laws that cover milk, why not gas?”

    Because the dairy farmer lobbyists have far less power than the oil and petroleum lobbyists.

  79. mrearly2 says:

    People shouldn’t be drinking that processed garbage, anyway. Only raw milk is good for us.

  80. @sodden: Enron is just one example of the continuing disaster of energy deregulation. And your argument is strangely circular.

    We deregulated the mortgage industry: Bear Stearns, Countrywide and a million homeowners have gone belly up and you don’t want to include the deregulation as the cause? That is EXACTLY the cause.