A dollar store opens in a rural community, sells products below cost and runs every other retailer out of business. Once it is the only show in town, the retailer can raise prices.
It was among several proposals concerning competition and markets that were laid over by the House Commerce Finance and Policy Committee Wednesday.
Attorney General Keith Ellison said the proposed legislation would update state law to address anti-competitive markets that can stifle innovation and hurt consumers, workers and businesses.
“We need some updated tools to be even more effective at the work you all are helping us do,” he said.
Ellison is especially concerned about market consolidation in the agriculture, health care and tech industries, which narrows choice for consumers as well as producers. He cited a farmer in Rice County who faced take-it-or-leave-it offers for their livestock because of so few potential buyers.
Warroad grocer Chuck Lindner said he can sometimes buy retail from a local dollar store cheaper than from his wholesaler.
The bills may be well-intentioned, but the impact will be increased litigation costs, said Beth Kadoun, vice president of tax and fiscal policy with the Minnesota Chamber of Commerce.
Businesses make pricing decisions every day, she said, offering discounts for paying electronically or buying in bulk or participating in loyalty programs. It’s unclear if the practices would be unlawful under the bill, she said.
A coalition of business associations, including the National Association of Independent Businesses, Minnesota Chamber of Commerce and Minnesota Retailers Association, wrote in opposition.
“This legislative proposal would flip the burden of proof on the defendant to justify every business decision related to price that is found to be objectionable,” the letter states.
Rep. Tim O'Driscoll (R-Sartell) noted big retailers can get price breaks through using their own trucks or warehousing, and he understands independent grocers don’t have that choice.
“It sounds like if you’re big you’re automatically bad, and that’s not necessarily the case,” O’Driscoll said.
As an example, he said it’s been the big businesses that have stepped up to pay higher wages to employees.