Thursday, June 28, 2007

The Business that Did Not Charge Enough

A business owner in Wisconsin is in trouble because he did not charge old people enough.

As reported in Forbes, Raj Bahandari used to give the old people who bought gas at his BP station a 2 cents a gallon discount. Then one of his competitors filed a complaint with the state agency that regulates gasoline sales. It turns out there is a state law, the Unfair Sales Act, that requires station owners to charge a minimum price for gasoline. Bahandari faced stiff fines from the Wisconsin Department of Agriculture, and the possibility of expensive lawsuits from his competitors. So he stopped offering the discounts. Gasoline sales dropped 20 percent.

Then he started fighting back. He's suing the Department of Agriculture and its secretary, Rod Nilsestuen. The Institute for Justice, an Arlington, VA based law firm representing Bahandari, says the 1930s law is unconstitutional. It vows to take the case to the state Supreme Court.

Meanwhile, the state trade association representing gasoline retailers like Mr. Bahandari has come out against his lawsuit. It claims the law promotes fair trade. No word from the trade association on what the law does for old people.

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