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WISCONSIN

REGULATION OF PRICE COMPETITION

A. RESALE PRICE MAINTENANCE

Rev. Stat. (1939)

Fair Trade Act

Sec. 133.25. Certain contracts not in restraint of trade; exceptions. (1) This section may be cited as the "Fair Trade Act."

(2) As used in this section, "producer" means grower, baker, maker, manufacturer; and "commodity" means any subject of

commerce.

(3) Except as provided in subsections (4) and (6), no contract relating to the sale or resale of a commodity which bears, or the label or content of which bears, the trade-mark, brand, or name of the producer or owner of such commodity and which is in fair and open competition with commodities of the same general class produced by others, shall be deemed a contract or combination in the nature of a trust or conspiracy in restraint of trade or commerce by reason of any of the following provisions contained in such contract: (a) That the buyer will not resell such commodity except at the price stipulated by the vendor.

(b) That the vendee or producer shall require that any person to whom delivery of a commodity is made for the purpose of resale shall agree that the latter will not, in turn, resell except at the price stipulated by the vendor or vendee.

(4) Every contract containing the provisions referred to in subsection (3) shall include the provision that such commodity may be resold without reference to such contract in the following cases:

(a) In closing out in good faith the owner's stock or any part thereof for the purpose of discontinuing delivering any such commodity.

(b) When the goods are damaged or deteriorated in quality, and notice is given to the public thereof.

(5) Wilfully and knowingly advertising, offering for sale, or selling any commodity at less than the price stipulated in any contract referred to in subsection (3), whether or not the person so advertising, offering for sale, or selling is a party to such contract, is unfair competition and is actionable at the suit of any person damaged thereby.

(6) This section does not apply to any contract between producers or between wholesalers or between retailers as to sale or resale prices. (7) (a) Upon complaint of any person that any contract containing the provisions referred to in subsection (3) is unfair and unreasonable as to the minimum resale price therein stipulated, the department of agriculture and markets may in its discretion serve by registered mail upon the parties to said contract notice of the time and place for a hearing on said complaint, at which hearing said parties shall show cause why the said contract should not be set aside. If upon such hearing the department of agriculture and markets shall find that such contract is unfair and unreasonable as to its minimum resale price provisions, said department may by special order declare such contract to be in restraint of trade.

(b) The department of agriculture and markets shall assess the costs of such proceeding against such contracting parties in case it finds such contract unfair and unreasonable and against the complainant if it finds such contract fair and reasonable: Provided, however, That the costs against any one complainant in any one complaint shall not exceed five dollars.

(c) Decisions in such cases shall be subject to judicial review as provided in section 93.20.

(8) This section shall not apply to any cooperative society or association not organized for profit. (1935, c. 52: 1935, c. 477; 43.08 (2).)

Judicial Decisions

Constitutionality of the Act.

The statute, sec. 523.25, is constitutional as being within the police power of the State. The provision allowing the department of agriculture and markets to review any resale price established and to declare a fair trade agreement in restraint of trade if it finds the price established to be unfair and unreasonable is not a price-fixing statute but is expressly designed to safeguard the public against the creation of monopolies. The provision exempting cooperatives from the operation of the statute is invalid because it makes no distinction between

cooperatives selling to members only and those selling to the public. In the latter case, the cooperative is in direct competition with other dealers in selling to the public and therefore the distinction between this class of cooperative and other dealers is unreasonable, discriminatory, and unconstitutional. However, under the separability clause in the statute, this does not affect the remainder of the act. Weco Products Co. v. Reed Drug Co., 225 Wis. 474, 274 N. W. 426 (1937), overruling Milwaukee Drug Co. v. Reed Drug Co. (Cir. Ct. 1936), CCH 7447, 2 P-H 40150.

Application of the Act.
Notice.

In Hiram Walker, Inc., v. Goldman, (Cir. Ct. 1938), 3 CCH 25137, the plaintiff established the price in contracts with several retailers nd then distributed schedules of the prices so established among the ide. The court stated that this constituted sufficient notice of the ale price restriction.

es Bound by Resale Price Restriction.

oncontracting dealer with notice of the resale price restriction nd by it. Weco Products Co. v. Reed Drug Co., supra. The required is notice at the time of acquisition of the goods. Walker, Inc., v. Goldman, supra. But where plaintiff has hat defendant did have notice, the burden is on the defendant ow at the notice was not received at the time of acquisition. id.

Barties Estal

shing a Price Restriction.

Faintiff, a

sole distributor of a commodity bearing a trade-mark, establish a price restriction. Ibid.

Thas the right to

Resale Price Restriction.

IParties Enforcing or of a commodity bearing a trade-mark, plaintiff As sole distributs goodwill and can enforce a resale price estabhas an interest in goodwill of the commodity. Ibid.

lished to protect the

Defenses.

le reasonable efforts to enforce the resale price Plaintiff, having mac violators, can maintain an action to enjoin restriction against other the statute. Ibid.

defendant from violating

Excepted Sales.

not except from its operation sales made The Fair Trade Act does 1. the State, jobbers must abide by resale tothe State and, in selling to pursuant to the statute. Op. Att'y.

ce restrictions established

A

-1, March 28, 1939, 3 CCH.

25249.

B. PROHIBITION OF SALES BELOW COST

commerce.

Rev. Stat. (1939)

Unfair Sales Act

Sec. 100.30. A new section is added to the statutes to read : 110.15. Unfair Sales Act.-(1) Policy.-The practice of selling certain items of merchandise below cost in order to attract patronage is generally a form of deceptive advertising and unfair method of competition in Such practice causes commercial dislocations, misleads the consumer, works back against the farmer, directly burdens and obstructs commerce, and diverts business from dealers who maintain a fair price policy. Bankruptcies among merchants who fail because of the competition of those who use such methods result in unemployment, disruption of leases, and nonpayment of taxes and loans, and contribute to an inevitable train of undesirable consequences, including economic depression.

(2) Definitions.-When used in this section unless context otherwise requires:

(a) "Cost to retailer" means the invoice cost of the merchandise to the retailer, or the replacement cost of the merchandise to the retailer, whichever is lower; less all trade discounts except customary discounts for cash; to which shall be added freight charges not otherwise included in the invoice cost or the replacement cost of the merchandise as herein set forth, and cartage to the retail outlet if done or paid for by the retailer, which cartage cost, in the absence of proof of a lesser cost, shall be deemed to be three-fourths of one percent of the cost to the retailer as herein defined after adding thereto freight charges but before adding thereto cartage and mark-up and a mark-up to cover a proportionate part of the cost of doing business, which mark-up, in the absence of proof of a lesser cost, shall be six percent of the cost. to the retailer as herein set forth after adding thereto freight charges and cartage but before adding thereto a mark-up.

(b) "Cost to the wholesaler" means the invoice cost of the merchandise to the wholesaler, or the replacement cost of the merchandise to the wholesaler, whichever is lower; less all trade discounts except customary discounts for cash; to which shall be added, freight charges, not otherwise included in the invoice cost or the replacement cost of the merchandise as herein set forth, and cartage to the retail outlet if done or paid for by the wholesaler, which cartage cost, in the absence of proof of a lesser cost, shall be deemed to be threefourths of one percent of the cost to the wholesaler as herein seten after adding thereto freight charges but before adding thereto

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