UF00083566_00002.pdf

UF00083566_00002.txt

UF00083566_00002_pdf.txt

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27 July 1960
File: 1.3.11.2

Honorable C. Farris Bryant
Governor Nominee

Duval Hotel

Tallahassee. Florida

Dear Mr. Bryant:

The Florida Hilk Commission has scheduled a public hearing
on retail price conditions in the three milk marketing areas
under its jurisdiction comprised of thirty-six counties. and
accounting for fifty-four per cent (54%) of Florida's milk
reduction. to be held on August 3. 4 and 5. Senate Hearing
oom 31. Capitol Building. Tallahassee. Chairman Odham has
asked that I extend to you. on behalf of the Commission. a
cordial invitation to attend this important hearing. and he
has asked that I give you the background on the subject of
this particular hearing.

On November 15. 1957. the Commission. at the close of a
public hearing on the then existing retail price regulations
in existence or some twent ~iour ears. by a six to one

vote rzgeeled those regulat one wh ch set minimum prices
below ich distributors of milk and all retail outlets could
not sell milk and cream. This action followed closely the
revision of several regulations affecting dairy producers
which will not be reviewed here.

unmm

Honorable C. Farris Bryant
Pa e 2
J y 27. 1960

Following repeal of retail price controls and in the Spring
of 1958. the Commission received numerous requests from
distributors of milk asking for re-enectment of controls due

to a price war principally at retail supermarkets where milk
was offered as a loss leader.

It was generally stated that loss leader sales at super-
markets were disrupting established consumer purchasing
patterns in the market; that independent distributors of milk
could not compete on home delivery routes and in their drive-
in cash and carry stores because the supermarket prices were
often below cost and not having the resources of national
chain distributors. independent Florida concerns and the
competition they offered would soon be eliminated.

the Commission scheduled a public hearlng on this matter for
May is. 1958 and at the conclusion of the hearing. adopted an
order prohibitin any retail outlet from limiting the quantity
of mil offered or sale regardless of price and prohibiting
these same firms from making the purchase of milk contingent
upon the purchase of any other commodity in the store. This
has been described as the no limit. no tie-in order. and the
principal expressed by the Commission in its ado tion was
that a merchant should have the privilege of sel ing at any
price desirable but if the price was unrealistic then those
members of the industry affected should have the opportunity

to bu out the entire supply on hand at whatever price
adver ised.

Early in 1959 distributors of milk asked for further con-
sideration on the re-enectment of retail price controls.
commenting that the no tie-in. no limit order mentioned

above was ineffective. in arch 1959 a committee. composed

of Commission members and milk industry representatives. was

ap inted to study the problem and a public hearing on the

su ject was scheduled for April 2. 1959. The Committee
reported to the Commission at the public hearing that after
thorough study it was their recommendation that the Commission
adopt an order prohibiting the sale of milk at {eggi below a
price that would be 150% of the producer price or ole fluid
milk at 4! butterfat content. as established by the Commission.
For example. at the currently established producer price of 61¢
per gallon for 4% butterfat milk. this floor below which milk
could not be sold would equal 46¢ per one-hell gallon unit.
which is the major item handled by the supermarkets.

norms Ill. GOXIIOIIOR

onorablo C. Farris Bryant
Pogo 3
27 July l9CD

At tho conclusion of tho hoaring tho Commission. by a 4-3 voto.
roconnondod that its roviously adoptod lsgislativo program for
tho 1959 sossion of t a Florida Logislaturo includo s roconnon-
dation that all languago in Chaptor 501. Florida Statutos.
rolating to rotail prico contro s bo roposiod. Following
adoption of this notion tho Co-nission by anothor d-S voto
roconnondod that tho logislaturo substituto for tho ropoalod
rotail prico languago tho 150! 'floor' nontionod in tho abovo
paragraph. No action was takon by tho Commission on tho
adoption of an ordor as roconnondod by tho con-ittoo.

During tho 1959 sossion of tho logislaturo a bill ontitlod
Public Hoalth Connittoo Substitute for Houso Bill dd? possod
tho Houso and Sonata and provided. among anothor things. for
tho ro oal of all is ago rolating to retail prico controls
and su otituting tho 50% retail 'floor' rocnmnondod b tho
Commission. and a ono paragraph section authorizing {u l rotail
prico controls aitor public hoaring and finding by tho
Commission that an omorgonc osistod and for poriods not to
oscood six months. This bi 1 later draw an Esocutivo Voto.

Lator during 1959. distributors of milk from Northoast Florida
again callod {or onactoont of solo form of rotail prico control
on tho basis of on osisting prico oar and on Soptoobor 15. 1959
a public hoaring was hold in Jacksonvillo on this subjoct. At
tho conclusion of this hoaring tho Commission. by a 4-3 voto.
adoptod on ordor prohibiting tho salo of silk atugfgil boiow

a prico that oas 140% of tho producor prico for o luid
milk at l! buttorfat contont as ostablishod by tho Col-ission
for tho fourtosn county Northoast Florida Hill Markoting Aroa

gniy. For osanplo. this would ooual 43¢ {or a half-gallon
un t of milk.

In Juno of this yoar. distributors of nilk roouostod a public
hoaring in ordor that tho Commission oi ht considor tho onactnont
of add tional rotail controls stating f rst that action by tho
Commission of last Soptombor. sotting tho 140! "floor" was
inadoouato: sscondly that tho distributors of milk not affoctod

at tho wholosalo lovol by tho regulation woro granting voluno
discounts to supornarkots bringing tho ohoiosala prico of ono-
half gallon units of nilk to a gonoral avorags of 39.60 per

unit and third. that loss loador salos by supornarbots plus ohooo

salo discount practicoo by distributors woro now sproading to the
Central Florida and To a Bay ilk Markots. Also at this timo

too distributors of oil in tho Northoast Florida notiiiod tho

".OIWA m OOIUIIIIOI

Honorable C. Farris Bryant
Page a
27 July 1960

Commission of their desire to terminate their producer
suppliers of raw milk. some fourteen in all. and hence-
forth produce all of their oen needs. stati that they
could no longer pa; producers the minimum pr ce for raw
milk reouired by t e Commission and compete for the
retail market at prices generally preva ent in that
area. (A reouest of this nature had. until just recently
by Commission regulation. required a distributor to proove
that just cause' existed for terminating a producer. in
addition to the giving of ninety days notice rior to a
date fixed by the Commission as required b t a statute.
However. this re ulation had been under at act in the
courts. and the lorida Supreme Court recently held that

the Commission could not reunite the showing of 'cause'
in addition to the notice.)

Thus we arrive at the public hearing mentioned in my
opening paragraph. Distributor members of the industry
have been advised in advance of the necessity to appear
with proper audits to support their request or additional
controls due to a loss on their operation as a result of
current price wars. We have assembled all possible data
on the status of the industr and appropriate persons and

records have been subpoenad roe among distributors and
retail merchants.

This can be the most penetrati inquiry made on the
question of retail price contro s.

Experience indicates this to be a matter that will be
brought to your attention from time to time and Chairman
Odham wishes to assure you of full opportunity to observe
this hearing or participate in any manner des rable.

Key testimony should develop during the first day of the
hearing.

Respectfully.




D. u T
Administrator

HDW:dn
rtoesoa mu; BOIIuIIOI




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