State Explains "Gouging"

In a good piece in the SI Advance the paper helps to clarify the milk "gouging" issue: ""The price of milk is like a roller coaster, it goes up and down all the time," said Jessica Chittendon, a spokeswoman for the state Department of Agriculture. "The price-gouging law works best when the price goes down, because it prevents retailers from keeping those prices high." Not all prices above the threshold should be considered gouging, Ms. Chittendon added. In considering whether a retail price is "unconscionably excessive," the department considers mitigating factors, including changes in rent, wholesale pricing and the cost of marketing and handling."

"Mitigating factors!" Now that is a term of art in this city: "The Department of Agriculture uses a standard retail margin of 57 cents per gallon to gauge whether prices are excessive. But they only scrutinize the prices supermarkets set for gallons of milk, mostly because they don't have the resources to do anything else. That explains why some of the highest milk prices in both the City Hall study and the Advance survey were found in places that are never inspected -- local groceries, delis and bodegas -- and for smaller units of milk, like half-gallons and quarts."

In other words, the smaller convenience outlets where costs are even higher just to stay in business, and where the retailer is there, well, for the convenience of the local neighborhood. And think about the regulatory costs of inspecting 13,000 NYC bodegas: ""We do not have the means to enforce this in every store, in every instance," Ms. Chittendon said. "A little neighborhood bodega may charge 50 cents over the threshold, but they may just sell 20 gallons per week. But what is the taxpayer cost of addressing that one little bodega?"

And our guess is that if state Ag did the inspections they'd find that costs and margins made the gouging issue moot-not to mention the fact that there's a bodega-or two-on every corner, and competition is fierce, with milk often used as a loss leader.