PRICE-GOUGING SAID TO SOUR MILK MARKET

SAN FRANCISCO -- High milk prices in California are the result of retail price-gouging rather than state regulations governing wholesale milk costs, a policy analyst for Consumers Union here said last week.h cost of milk to consumers."She said California consumers would benefit "from greater competition among the biggest retailers on milk. Consumers Union's milk price surveys over the last three years

SAN FRANCISCO -- High milk prices in California are the result of retail price-gouging rather than state regulations governing wholesale milk costs, a policy analyst for Consumers Union here said last week.

h cost of milk to consumers."

She said California consumers would benefit "from greater competition among the biggest retailers on milk. Consumers Union's milk price surveys over the last three years have consistently shown a near uniformity in high retail milk prices at supermarkets, in contrast to significantly lower and less uniform milk prices at smaller markets.

"We strongly support the repeal of a 30-year-old California law that protects retailers by prohibiting them from selling milk below their cost or as a 'special.' Doing away with the sales-below-cost law in California would invigorate competition among milk retailers and bring down milk prices to consumers."

Odabashian made her remarks in response to efforts to lower the state's nutritional standards on milk as a way to lower prices. "Consumers Union neither agrees with nor support's [the] argument that lowering nutritional standards would make milk more affordable to California consumers," she said.

"Historical and current data show that most fluid milk is sold to consumers at prices much higher than competition would dictate and that retail prices are not significantly linked to farmer and processor costs.

"The assumption that lower prices will result from lowering California's standards, which would marginally lower the wholesale cost of milk, is not supported by historical fact. Any lowering of nutritional standards will most likely result in consumers paying the same price for a less nutritious product."