LRB-3086/1
RAC&MGG:skg:jlb
1995 - 1996 LEGISLATURE
October 12, 1995 - Introduced by Representatives Brancel, Hahn, Lehman, Olsen,
Ainsworth, Huber, Dobyns, Ott, Albers, Zukowski, Vrakas, Freese, Gard
and
Johnsrud, cosponsored by Senators Welch, Schultz and Buettner. Referred
to Committee on Consumer Affairs.
AB616,1,7 1An Act to renumber and amend 100.30 (2) (a); to amend 100.30 (2) (b), 100.30
2(2) (c) 1. a., 100.30 (2) (d), 100.30 (2) (L) (intro.), 100.30 (2m) (a), 100.30 (2m) (b),
3100.30 (3), 100.30 (5) (a), 100.30 (6) (a) 7. and 814.04 (intro.); to repeal and
4recreate
100.33 (1) (h); and to create 100.30 (2) (a), 100.30 (2) (am) 1m., 100.30
5(2) (cb), 100.30 (2) (cg), 100.30 (2) (cm), 100.30 (2) (j), 100.30 (2) (m), 100.30 (4m),
6100.30 (5m), 100.30 (6) (a) 9. and 100.30 (6) (a) 10. of the statutes; relating to:
7the regulation of the sale of merchandise below cost and providing a penalty.
Analysis by the Legislative Reference Bureau
Currently, with certain exceptions, the state unfair sales or "minimum
markup" law requires a wholesaler of cigarettes, other tobacco products, fermented
malt beverages, intoxicating liquor, wine or motor vehicle fuel to sell that
merchandise for at least 3% more than the cost of the merchandise to the wholesaler.
The law requires a retailer of cigarettes, other tobacco products, fermented malt
beverages, intoxicating liquor, wine or motor vehicle fuel to sell that merchandise for
at least 6% more than the cost of the merchandise to the retailer. Finally, the law
requires a retailer or wholesaler of other merchandise to sell that merchandise for
at least its cost to the retailer or wholesaler. Generally, under the unfair sales law,
cost is computed as the lesser of the invoice cost or the replacement cost of the
merchandise, plus excise taxes and overhead costs, and minus certain trade
discounts.
The unfair sales law prohibits offering loss leaders. A loss leader is the sale of
an item of merchandise at less than cost in order to induce the purchase of other
merchandise or to unfairly divert trade from a competitor.
This bill creates different minimum markup requirements for sellers of motor
vehicle fuel from those in current law. The minimum markup requirements under

the bill for retail sales of motor vehicle fuel vary depending on various factors,
including whether the retail seller is owned or operated by a refiner or wholesaler
of motor vehicle fuel. Depending on those factors, the minimum markup under the
bill for retail motor vehicle fuel sales is generally 6% over the cost of the motor vehicle
fuel to the retail seller, 6% or 9.18% over the retail seller's lowest selling price or
9.18% over the average posted terminal price. The average posted terminal price is
the average posted price at which motor vehicle fuel is sold at a motor vehicle storage
and distribution facility that is supplied by a pipeline or marine vessel, from which
facility motor vehicle fuel may be removed at rack and from which facility 5 or more
refiners sell motor vehicle fuel.
The minimum markup requirements under the bill for a wholesaler of motor
vehicle fuel are generally 3% over the wholesaler's cost or 3% over the average posted
terminal price, whichever is greater.
The bill also provides that a person may be liable for a violation of the minimum
markup law if the person is a partner, officer or director of a person who commits a
violation. The bill permits a person who is liable for a violation to obtain contribution
from any other person who may also be liable for the violation.
Under current law, the department of agriculture, trade and consumer
protection (DATCP) or a district attorney may bring an action on behalf of the state
to recover a forfeiture against a person who violates the minimum markup law.
DATCP may also issue an order requiring certain retailers or wholesalers to cease
and desist from violating the minimum markup law. Finally, under current law,
DATCP or a district attorney may bring an action to enjoin a violation of the
minimum markup law. This bill permits a person who is injured or threatened with
injury as a result of a sale or purchase of motor vehicle fuel in violation of the
minimum markup law to bring an action against the violator for an injunction, or for
the recovery of 3 times the amount of any monetary loss sustained or an amount
equal to $2,000 multiplied by each day of continued violation, whichever is greater,
plus costs and reasonable attorney fees.
Current law contains certain exceptions to the minimum markup
requirements. One of those exceptions provides that the minimum markup
requirements do not apply if merchandise is priced in good faith to meet the existing
price of a competitor. This bill provides that the exception applies only if the price
of motor vehicle fuel is identical to the price of the same motor vehicle fuel sold by
a direct competitor at not less than the competitor's cost on the same day, and is
established in good faith to meet the competitor's price.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB616, s. 1 1Section 1. 100.30 (2) (a) of the statutes is renumbered 100.30 (2) (am), and
2100.30 (2) (am) 1., as renumbered, is amended to read:
AB616,3,11
1100.30 (2) (am) 1. With respect to the sale of cigarettes or other tobacco
2products, fermented malt beverages, or intoxicating liquor or wine, or motor vehicle
3fuel,
"cost to retailer" means the invoice cost of the merchandise to the retailer within
430 days prior to the date of sale, or replacement cost of the merchandise to the
5retailer, whichever is lower, less all trade discounts except customary discounts for
6cash, plus any excise taxes imposed on such merchandise or the sale thereof other
7than excise taxes collected by the retailer, and any cost incurred for transportation
8and any other charges not otherwise included in the invoice cost or the replacement
9cost of the merchandise as herein set forth, to which shall be added a markup to cover
10a proportionate part of the cost of doing business, which markup, in the absence of
11proof of a lesser cost, shall be 6% of the cost to the retailer as herein set forth.
AB616, s. 2 12Section 2. 100.30 (2) (a) of the statutes is created to read:
AB616,3,1713 100.30 (2) (a) "Average posted terminal price" means the average posted rack
14price at which motor vehicle fuel is sold at the close of business on the determination
15date by all refiners at a terminal plus any excise taxes imposed on the motor vehicle
16fuel or its sale and any cost incurred for transportation and any other fees or charges.
17In this paragraph, "average" means the arithmetic mean.
AB616, s. 3 18Section 3. 100.30 (2) (am) 1m. of the statutes is created to read:
AB616,3,2019 100.30 (2) (am) 1m. With respect to the sale of motor vehicle fuel, "cost to
20retailer" means the following:
AB616,4,821 a. In the case of a retailer who is not owned or operated, either directly or
22indirectly, by a refiner or by a wholesaler of motor vehicle fuel and who purchases
23motor vehicle fuel from a refiner or wholesaler of motor vehicle fuel for retail sale at
24a retail station, the invoice cost of the motor vehicle fuel to the retailer within 10 days
25prior to the date of sale, or the replacement cost of the motor vehicle fuel, whichever

1is lower, less all trade discounts except customary discounts for cash, plus any excise,
2sales or use taxes imposed on the motor vehicle fuel or on the sale of the motor vehicle
3fuel and any cost incurred for transportation and any other charges not otherwise
4included in the invoice cost or the replacement cost of the motor vehicle fuel, plus a
5markup of 6% of that amount to cover a proportionate part of the cost of doing
6business; or the average posted terminal price at the terminal located closest to the
7retailer plus a markup of 9.18% of the average posted terminal price to cover a
8proportionate part of the cost of doing business; whichever is greater.
AB616,4,199 b. In the case of the retail sale of motor vehicle fuel by a refiner at a retail station
10owned or operated either directly or indirectly by the refiner, the refiner's lowest
11selling price to other retailers or to wholesalers of motor vehicle fuel on the date of
12the refiner's retail sale, less all trade discounts except customary discounts for cash,
13plus any excise, sales or use taxes imposed on the motor vehicle fuel or on its sale and
14any cost incurred for transportation and any other charges not otherwise included
15in the invoice cost of the motor vehicle fuel, plus a markup of 9.18% of that amount
16to cover a proportionate part of the cost of doing business; or the average posted
17terminal price at the terminal located closest to the retail station plus a markup of
189.18% of the average posted terminal price to cover a proportionate part of the cost
19of doing business; whichever is greater.
AB616,5,620 c. In the case of the retail sale of motor vehicle fuel by a wholesaler of motor
21vehicle fuel at a retail station owned or operated either directly or indirectly by the
22wholesaler of motor vehicle fuel, the wholesaler of motor vehicle fuel's lowest selling
23price to other retailers on the date of the wholesaler of motor vehicle fuel's retail sale
24less all trade discounts except customary discounts for cash, plus any excise, sales
25or use taxes imposed on the motor vehicle fuel or on its sale and any cost incurred

1for transportation and any other charges not otherwise included in the invoice cost
2of the motor vehicle fuel, plus a markup of 6% of that amount to cover a proportionate
3part of the cost of doing business; or the average posted terminal price at the terminal
4located closest to the retail station plus a markup of 9.18% of the average posted
5terminal price to cover a proportionate part of the cost of doing business; whichever
6is greater.
AB616,5,107 d. In the case of a retail sale of motor vehicle fuel at a retail station by a person
8not described in subd. 1. a. to c., the average posted terminal price at the terminal
9located closest to the retail station plus a markup of 9.18% of the average posted
10terminal price to cover a proportionate part of the cost of doing business.
AB616,5,2111 e. In the case of a retail sale of motor vehicle fuel at a place other than a retail
12station, the invoice cost of the motor vehicle fuel to the retailer within 10 days prior
13to the date of the sale, or the replacement cost of the motor vehicle fuel, whichever
14is lower, less all trade discounts except customary discounts for cash, plus any excise,
15sales or use taxes imposed on the motor vehicle fuel or on its sale and any cost
16incurred for transportation and any other charges not otherwise included in the
17invoice cost or the replacement cost of the motor vehicle fuel, plus a markup of 3%
18of that amount to cover a proportionate part of the cost of doing business; or the
19average posted terminal price at the terminal located closest to the place of delivery
20plus a markup of 3% of the average posted terminal price to cover a proportionate
21part of the cost of doing business; whichever is greater.
AB616, s. 4 22Section 4. 100.30 (2) (b) of the statutes is amended to read:
AB616,6,1023 100.30 (2) (b) "Cost to retailer" and , "cost to wholesaler" and "cost to wholesaler
24of motor vehicle fuel"
as defined in pars. (a) and (am), (c) and (cb) mean bona fide
25costs; and purchases made by retailers and, wholesalers and wholesalers of motor

1vehicle fuel
at prices which cannot be justified by prevailing market conditions
2within this state shall not be used in determining cost to the retailer and, cost to the
3wholesaler and cost to the wholesaler of motor vehicle fuel. Prices at which
4purchases of merchandise other than motor vehicle fuel are made by retailers or
5wholesalers cannot be justified by prevailing market conditions in this state when
6they are below the lowest prices at which the manufacturer or producer of such
7merchandise sells to other retailers or wholesalers in this state. Prices at which
8purchases of motor vehicle fuel are made by retailers and wholesalers of motor
9vehicle fuel cannot be justified by prevailing market conditions in this state when
10they are below the average posted terminal price.
AB616, s. 5 11Section 5. 100.30 (2) (c) 1. a. of the statutes is amended to read:
AB616,6,2312 100.30 (2) (c) 1. a. With respect to the sale of cigarettes or other tobacco
13products, fermented malt beverages, or intoxicating liquor or wine, or motor vehicle
14fuel,
"cost to wholesaler" means, except as provided in subd. 1. b., the invoice cost of
15the merchandise to the wholesaler within 30 days prior to the date of sale, or the
16replacement cost of the merchandise to the wholesaler, whichever is lower, less all
17trade discounts except customary discounts for cash, plus any excise taxes imposed
18on the sale thereof prior to the sale at retail, and any cost incurred for transportation
19and any other charges not otherwise included in the invoice cost or the replacement
20cost of the merchandise as herein set forth, to which shall be added, except for sales
21at wholesale between wholesalers, a markup to cover a proportionate part of the cost
22of doing business, which markup, in the absence of proof of a lesser cost, shall be 3%
23of the cost to the wholesaler as herein set forth.
AB616, s. 6 24Section 6. 100.30 (2) (cb) of the statutes is created to read:
AB616,7,12
1100.30 (2) (cb) With respect to the sale of motor vehicle fuel, "cost to wholesaler
2of motor vehicle fuel" means the invoice cost of the motor vehicle fuel to the
3wholesaler of motor vehicle fuel within 10 days prior to the date of the sale or the
4replacement cost of the motor vehicle fuel, whichever is lower, less all trade discounts
5except customary discounts for cash, plus any excise, sales or use taxes imposed on
6the motor vehicle fuel or on its sale and any cost incurred for transportation and any
7other charges not otherwise included in the invoice cost or the replacement cost of
8the motor vehicle fuel, plus a markup of 3% of that amount to cover a proportionate
9part of the cost of doing business; or the average posted terminal price at the terminal
10located closest to the place of delivery plus a markup of 3% of the average posted
11terminal price to cover a proportionate part of the cost of doing business; whichever
12is greater.
AB616, s. 7 13Section 7. 100.30 (2) (cg) of the statutes is created to read:
AB616,7,1614 100.30 (2) (cg) 1. Except as provided in subd. 2., "determination date" is the day
15preceding the day of the sale of motor vehicle fuel by a retailer or wholesaler of motor
16vehicle fuel.
AB616,7,2217 2. If a retailer or a wholesaler of motor vehicle fuel sells motor vehicle fuel on
18a day other than the day on which the retailer or wholesaler of motor vehicle fuel last
19purchased any motor vehicle fuel and the sale of the motor vehicle fuel by the retailer
20or wholesaler of motor vehicle fuel occurs no later than 10 days after its last purchase
21by the retailer or wholesaler of motor vehicle fuel, "determination date" means any
22of the following dates selected by the retailer or the wholesaler of motor vehicle fuel:
AB616,7,2423 a. The day preceding the day of the sale of motor vehicle fuel by the retailer or
24wholesaler of motor vehicle fuel.
AB616,8,2
1b. The day on which motor vehicle fuel was last purchased by the retailer or
2wholesaler of motor vehicle fuel.
AB616, s. 8 3Section 8. 100.30 (2) (cm) of the statutes is created to read:
AB616,8,64 100.30 (2) (cm) "Refiner" means a manufacturer, producer or refiner of motor
5vehicle fuel or a person who purchases motor vehicle fuel for sale to wholesalers of
6motor vehicle fuel.
AB616, s. 9 7Section 9. 100.30 (2) (d) of the statutes is amended to read:
AB616,8,128 100.30 (2) (d) "Replacement cost" means the cost computed as specified in par.
9(a) or (am), (c) or (cb) at which the merchandise sold could have been bought by the
10retailer or, wholesaler or wholesaler of motor vehicle fuel at any time if bought in the
11same quantity as the retailer's or, wholesaler's or wholesaler of motor vehicle fuel's
12last purchase of the said merchandise.
AB616, s. 11 13Section 11. 100.30 (2) (j) of the statutes is created to read:
AB616,8,1714 100.30 (2) (j) "Terminal" means a motor vehicle fuel storage and distribution
15facility that is supplied by a pipeline or marine vessel, from which facility motor
16vehicle fuel may be removed at a rack and from which facility at least 5 refiners sell
17motor vehicle fuel
AB616, s. 11 18Section 11. 100.30 (2) (L) (intro.) of the statutes is amended to read:
AB616,8,2219 100.30 (2) (L) (intro.) "Wholesaler" includes every person holding a permit as
20a multiple retailer under s. 139.30 (8) and every person engaged in the business of
21making sales at wholesale, other than sales of motor vehicle fuel at wholesale, within
22this state except as follows:
AB616, s. 12 23Section 12. 100.30 (2) (m) of the statutes is created to read:
AB616,8,2424 100.30 (2) (m) "Wholesaler of motor vehicle fuel" includes all of the following:
Loading...
Loading...