February 04, 2013
More than 35 years ago, a law was put into effect to stabilize milk prices. At that time, the Louisiana Dairy Stabilization Board was created under the Department of Agriculture and Forestry to prevent unfair or deceptive trade practices in the sale of milk and milk products. Recently, the board received a complaint that a grocery store was selling milk below cost. As a regulatory entity, the board and this agency are required to uphold and enforce the laws.
As stated in the law, the purposes of the board are to:
1) Provide a regulatory program that is designed to stabilize the dairy industry in order to assure an adequate supply of healthful and wholesome dairy products to consumers at fair and reasonable prices.
2) Establish regulations to prevent unfair methods of competition and disruptive trade practices in the sale of milk and dairy products.
3) Enforce these regulations by licensing all processors, distributors and retailers.
4) investigate complaints regarding violations of its regulations and audit the financial records of processors, distributors and retailers to determine the costs of manufacturing, selling and delivering of dairy products.
The dairy stabilization law was enacted in 1974 when a company allegedly used unfair practices to drive down the cost of milk and drive out its competition. According to the Louisiana Revised :A. Unfair methods of competition, unfair or deceptive acts or practices and disruptive trade practices are hereby declared unlawful with respect to the sale of milk and milk products.
B. The board is hereby empowered and directed to prevent persons, partnerships and corporations from using unfair methods of competition, unfair or deceptive acts or practices and disruptive trade practices in the sale of milk and milk products, and the board, after notice and hearing, shall promulgate rules and regulations implementing the policy and purposes of this Subpart and defining with specificity acts and practices in the sale of milk and milk products which are unfair methods of competition, unfair or deceptive acts or practices and disruptive trade practices and providing for the investigation of complaints thereunder and the enforcement thereof. ...”
Rules were established and may be found in the Louisiana Administrative Code 7:XXXI.317.B.22 which states, “The selling or the offering to sell dairy products under terms or prices which result in said sale being below cost as defined herein is prohibited.”
There are similar laws pertaining to gas prices and electricity which are enforced by other state regulatory agencies.
Louisiana is one of 12 states that have below-cost provisions for milk.
The board is composed of two milk producers, one wholesale grocer, one processor, one retailer and three consumers.
Mike Strain, commissioner
Louisiana Department of Agriculture and Forestry