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Post date: June 30 1999

Ag Says Most Retailers Have Reduced Milk Prices

Attorney General Spitzer said today that most of the retailers identified by his office as having excessively high milk prices have substantially reduced their prices and are now in compliance with state regulations.

He noted, however, that a handful of stores continue to sell milk at prices that may violate the state’s price gouging laws, and he has recommended that these stores now face enforcement actions.

"Our goal is to enhance compliance with the state’s milk pricing structure," Spitzer said. "This has been achieved in large measure. However, a number of stores, inexplicably, have refused to explain why their prices are unconscionably high. As a result, we are now recommending appropriate enforcement action to help protect the integrity and effectiveness of the law designed to benefit New York consumers."

In April, investigators from the Department of Law checked milk prices on three separate occasions and found 27 supermarkets, convenience stores and other retail shops that had not passed on a more than 30 percent reduction in producer prices that had occurred several weeks earlier. Spitzer sent a letter to each of the stores warning that unless prices were reduced immediately, enforcement actions might ensue under the state’s milk price gouging statute.

A follow-up investigation in May found that after receiving the letter, 19 of the 27 stores moved quickly to reduce their prices -- by an average of 50 cents per gallon. Five stores, however, continue to sell milk at prices that are more than 30 cents above the threshold for possible price gouging. These five stores -- located in New York City, Syracuse, Plattsburgh, Watertown, and White Plains -- have been referred to the State Department of Agriculture and Markets, which is responsible for triggering formal milk price gouging actions.

Spitzer called on the department to be aggressive as possible in protecting consumers. "The state’s emphasis ought not to be on celebrating the level of compliance in the food industry -- which is relatively high -- but on identifying and prosecuting those retailers who break the law."

Under the state’s general business law, the threshold for price gouging is 200 percent above the Class I price of fluid milk. The threshold price declined sharply in early April as producer prices fell, but rose slightly in May. The new threshold price for a gallon of milk is $2.55 in the upstate region and $2.67 per gallon downstate.

Overall, milk prices have declined significantly since March, when the average price per gallon was a record $3.02 statewide. April’s average price was $2.58, and May’s average price was $2.53.