FTC Staff Comment Before the Advisory Council on the Regulation of Dairy Practices Concerning the Dairy Trade Practices Act

26 FEDERAL Pl..AZA. 22M FL
NEW YQRI<. N.Y. 10278
(212) 264-1200
l"~ITED STATES OF .-\."'1ERICA
FEDERAL TRADE COMMISSION
:-JEW YORK REGIONAL OFFICE
V89IJ022
COMMISSION AUTHORIZED
1
t
February 	17, 	1989
Professor Robert 	T. 	Masson
Advisory Council 	on 	the 	Regulation 	of 	Dairy 	Practices
c/o 	Department 	of 	Economics
College 	of 	Arts 	and 	Sciences
Cornell 	University
Uris 	Hall
Ithaca, 	New York 	14853-7601
Dear 	Professor Masson:
The 	staff 	of 	the 	Federal 	Trade 	Commission 	is 	pleased 	to
respond 	to 	your 	letter 	of 	December 	23, 	1988 	to 	Daniel 	Oliver 1
Chairman 	of 	the 	Federal 	Trade 	Commission, 	requesting 	comments
relating 	to 	the 	Dairy 	Trade 	Practices 	Act 	("the 	Act"). 2 	We
understand 	that 	the 	Act 	is 	scheduled 	to 	expire 	on 	April 	I, 	1989,
and 	that 	the 	Advisory 	Council 	on 	the 	Regulation 	of 	Dairy 	Prac-
tices 	("the 	Council") 	has 	been 	charged 	by 'the 	New 	York 	Legis-
lature 	with 	the 	task 	of 	reviewing 	the 	need 	for 	legislation 	to
replace 	it. 	We 	also 	understand 	that 	the 	Council's 	mandate 	is
not 	limited 	to 	reviewing 	the 	Act, 	but 	includes 	analyzing 	the
relationships 	between 	the 	Act 	and 	both 	New 	York 	and 	federal
antitrust 	statutes. 	We 	believe 	that 	New 	York 	consumers 	are
likely 	to 	be 	best 	served 	if 	the 	Act 	is 	allowed 	to 	expire 	and 	is
not 	replaced 	by 	regulatory 	legislation.
Interest 	and 	Experience 	of 	the
Federal Trade 	Commission 	Staff
The 	Federal 	Trade 	Commission 	("the 	Commission") 	is 	charged
by 	Congress 	to 	prevent 	unfair 	methods 	of 	competition 	and 	unfair
and 	deceptive 	acts 	and 	practices. 	In,>/,furtherance 	crf 	its 	mandate,
the 	Commission 	or 	its 	staff 	frequently 	submits 	comments, 	upon
request, 	to 	regulatory 	agencies, 	legislatures, 	and 	other
These 	comments 	represent 	the 	views 	of 	the 	staff 	of 	the
New 	York 	Regional 	Office 	and 	the 	Bureau 	of 	Competition 	of 	the
Federal 	Trade 	Commission. 	They 	are 	not 	necessarily 	the 	views 	of
the 	Federal 	Trade 	Commission 	or 	any 	individual-Commissioner.
2
1988) .
N. Y. 	Agric. 	& 	Mkts. 	Law 	§§ 	258-s 	- 	258-z 	(McKinney

government 	bodies 	concerning 	the 	consumer 	benefits 	of 	unfettered
competition.
The 	staff 	of 	the 	Federal 	Trade 	Commission 	submitted
comments 	to 	the 	State 	of 	New 	York 	in 	1987 	an~yzing the 	potential
benefits 	of 	New 	York 	Assembly 	Bill 	No. 	3643~ 	which 	was 	designed
to 	remove 	barriers 	to 	entry 	created 	by 	prior 	milk 	legislation.
In 	1986, 	in 	a 	letter 	to 	Governor 	Cuomo I 	Commission 	Chairman
Daniel 	Oliver 	opposed 	New 	York 	milk 	licensing 	laws 	and 	regula-
tions 	that 	had 	the 	effect 	of 	preventing 	entry 	into 	the 	milk
distribution business, 	especially 	since 	a 	New 	Jersey 	business 	had
already 	demonstrated 	that 	it 	could 	successfully 	distribute 	milk
in 	Staten 	Island 	at 	a 	lower 	price 	than was 	then 	being 	charged. 3
In 	Section 	I 	of 	this 	submission, 	we 	set 	forth 	our
understanding 	of 	the 	Dairy 	Trade 	Practices 	Act. 	In 	Section 	II,
we 	describe 	possible 	justifications 	for 	economic 	regulation 	of
markets, 	including 	the 	milk 	market. 	Section 	III 	explains 	why 	we
believe 	economic 	regulation 	of 	the 	milk 	distribution 	industry 	is
not 	needed. 	We 	also 	point 	out 	that 	existing 	federal 	and 	st,ate
antitrust 	laws 	generally 	are 	sufficient 	to 	protect 	consumers
(Section 	IV).
I. 	THE 	DAIRY TRADE 	PRACTICES 	ACT
The 	Dairy 	Trade 	Practices 	Act 	consists 	of 	Sections 	258-s
through 	258-z 	of 	the 	New 	York 	Agriculture 	and 	Markets 	Law. 4
Section 	258-s 	declares 	that 	the 	New 	York 	State 	milk 	industry 	is
affected 	with 	the 	public 	interest, 	and 	that 	it 	is 	the 	public
policy 	of 	New 	York 	State 	to 	assure 	a 	plentiful 	supply 	of 	milk 	to
its 	inhabitants, 	maintain 	the 	economic 	well-being 	of 	the 	dairy
industry, 	preserve 	-competition, 	encourage 	improved 	technology,
and 	protect 	the 	consuming 	public. 	The 	basic 	operative 	sections
of 	the 	Act 	concern 	market 	conduct. 	They 	forbid 	certain 	types 	of
price 	discrimination, 	pricing 	below 	cost, 	and 	unfair 	methods 	of
competition 	in 	the 	distribution 	of 	fluid 	milk 	and 	fluid 	milk
products. 	Indirect - efforts 	by 	a 	seller 	to 	engage 	in 	these
forbidden 	tactics 	are 	also 	prohibited 	by 	Section 	258-w, 	which
bars 	the 	use 	of 	rebates, - commissions, 	brokerage, 	discounts 	and
gifts 	between 	a 	buyer 	and 	seller 	of 	fluid 	milk 	or 	fluid 	milk
3 	The 	comments 	of 	staff 	and 	Chairman 	Oliver 	focused 	on
statutory 	barriers 	to 	entry 	into 	the 	milk 	business. 	Statutory
barriers 	have 	been 	reduced 	by 	recent 	court 	decisions 	and
legislation. 	~ 	Farmland 	Dairies 	y. 	Gerace, 	650 	F. 	Supp. 	939
(E.D.N.Y. 	1987) 	and 	the 	subsequent 	amendments 	to 	the 	New 	York
laws 	concerning 	licensing 	of 	milk 	dealers, 	N.Y. 	Agric. 	& Mkts.
Law, 	§ 	258-c.(McKinney 	1988).
4 	N.Y. 	Agric. 	& Mkts. 	Law 	(McKinney 	1988).
2

5
products 	to 	accomplish 	the 	ends 	prohibited 	by 	Sections 	258t
through 	258v, 	except 	to 	meet 	competition. 	Knowing 	inducement 	or
receipt 	of 	a 	price, 	service, 	facility 	or 	benefit 	prohibited 	by
Sections 	258t, 	u 	or 	w, 	is 	forbidden 	by 	Section 	258-x. 	The
Commissioner 	of 	Agriculture 	and 	Markets 	is 	a~thorized by 	Section
258-y 	to 	issue 	regulations 	further 	defining 	acts 	deemed 	to 	be
prohibited 	under 	the 	above 	sections. 	Section 	258-z 	permits
private 	lawsuits 	as 	well 	as 	suits 	by 	the 	Commissioner 	of
Agriculture 	and 	Markets 	to 	enforce 	the 	Act 	and 	exempts 	sales 	of
raw 	milk 	by 	producers 	to 	dealers 	from 	the 	prior 	sections. 	These
laws 	were 	added 	in 	1973 	to 	the 	preexisting, 	complex New York 	milk
control 	law 	which 	dates 	back 	to 	1934. 	In 	1987, 	the 	entire 	Act
was 	repealed, 	effective 	April 	1, 	1989.
II. 	POSSIBLE 	LEGITIMATE 	JUSTIFICATIONS 	FOR 	ECONOMIC 	REGULATION
OF 	MILK 	INDUSTRY
In 	a 	competitive 	market, 	supply 	and 	demand 	are 	determined 	by
consumers 	voting 	with 	their 	dollars. 5 	To 	maximize 	profit _, in
this 	competitive 	system, 	a 	producer 	must 	satisfy 	consumer
preferences 	for 	products, 	packages, 	and 	methods 	of 	distribution
in 	the 	most 	efficient 	manner. 	Less 	efficient 	producers 	are
driven 	from 	the 	market, 	thus 	freeing 	up 	scarce 	resources 	for 	uses
that 	consumers 	value 	most 	highly. 	In 	this 	way 	"[v] igorous 	and
healthy 	competition 	engenders 	economic 	efficiency 	which 	redounds
to 	the 	benefit 	of 	cons.umers.,,6 	Consumer 	welfare 	normally 	is
maximized 	not 	by 	government 	regulation, 	but 	by 	allowing 	markets
to 	operate 	freely. 	.
Government 	regulation 	of 	markets 	may 	be 	justified 	in 	the
case 	of 	market 	failure. 	Market 	failures 	may 	arise 	when 	consumers
are 	unable 	to 	evaluate 	the 	safety 	and 	quality 	of 	certain 	goods
and 	services. 	In 	rare 	cases, 	producers 	may 	not 	have 	the
incentive 	to 	provide 	such 	information 	to 	consumers. 	Market
failures 	also 	may 	arise 	if 	a 	market 	participant 	can 	affect 	price
"The 	heart 	of 	our 	national 	economic 	policy 	long 	has
been 	faith 	in 	the 	value 	of 	competition." 	Standard 	Oil 	Co, 	y.
~, 	340 	U.S. 	231, 	248, 	(1951), 	as 	quoted 	in 	National 	Society 	of
Professional 	Engineers 	y. 	U.S., 	435" U.S. 	679, 	695, 	(1978).
Economist 	Paul 	Samuelson 	has 	explained 	that 	a 	competitive 	system
is 	"an elab9rate mechanism 	for 	unconscious 	coordination 	through 	a
system 	of 	prices 	and 	markets, 	a 	communication 	device 	for 	pooling
the 	knowledge 	and 	actions 	of 	millions 	of 	diverse 	individuals." 	P.
Samuelson, 	ECONOMICS 	42 	(12th 	ed., 	1985).
6
(1984).
International 	Tel. 	& 	Tel. 	Corp., 	104 	F.T.C. 	280, 	402
3

by 	reducing 	output. 7 	The 	exercise 	of 	market 	power, 	however,
requires 	not 	only 	the 	existence 	of 	a 	large 	market 	share 	but 	also
conditions 	that 	prevent 	other 	firms 	from 	entering 	the 	market 	to
compete 	with 	the 	dominant 	firm.
~
When 	markets 	fail, 	government 	regulation 	may 	be 	able 	to
correct 	the 	market 	failure 	and 	thus 	increase 	the 	general 	public
welfare. 	Even 	when 	regulation 	is 	proposed 	to 	cure 	a 	market
failure, 	however, 	it 	promotes 	public 	well-being 	only 	when 	the
costs 	imposed 	on 	all 	by 	that 	regulation 	are 	less 	than 	the 	costs
that 	would 	be 	incurred 	because 	of 	market 	failure. 	A regulation
designed 	to 	serve 	the 	interests 	of 	a 	special 	group 	may 	not
produce 	a 	net 	benefit 	for 	society 	as 	a 	whole.
III. 	SPECIAL 	REGULATION 	OF 	THIS 	INDUSTRY 	DOES 	NOT 	APPEAR
NECESSARY
The 	milk 	distribution 	industry 	does 	not 	appear 	to 	exhibit
any 	significant 	failures. 	Producers 	can 	receive 	adequate 	and
accurate 	information 	about 	consumer 	preferences 	in 	the 	milk
market, 	where 	consumers 	can 	easily 	express 	their 	desires 	through
frequent 	purchases. 	The 	proliferation 	of 	different 	types 	of 	milk
products 	sold 	in 	a 	variety 	of 	sizes 	and 	types 	of 	containers 	may
be 	some 	indication 	OE 	the 	amount 	of 	information 	being
transmitted 	from 	purchasers 	to 	producers 	in 	this 	industry.
The 	availability 	of 	accurate 	information 	about 	the 	quality
and 	safety 	of 	milk 	is 	a 	potential 	market 	information 	failure 	that
has 	been 	addressed 	by 	laws 	requiring 	various 	disclosures 	on 	milk
containers, 	~, 	disclosure 	of 	milkfat 	content, 	the 	identity 	of
the 	processor, 	and 	"freshness" 	dates. 8 	The 	Dairy 	Trade 	Practices
7 	Output 	restrictions 	can 	lead 	to 	lower 	prices 	when 	the
buyer 	has 	market 	power 	and 	to 	higher 	prices 	when 	the 	seller 	has
market 	power. 	~ 	General 	Foods 	Corp., 	103 	F.T.C. 	204, 	345 	n.30
(1984). 	.
Market 	failures 	could 	derive 	from 	"externalities." 	An
externality--environmental 	pollution, 	for 	example--is 	said 	to
exist 	when 	a 	cost 	associated 	with 	the 	production 	or 	consumption
of 	a 	product 	is 	not 	reflected 	in 	the 	price 	system. 	Hence, 	the
externality 	is 	overproduced 	because 	tHe 	price 	system 	does 	not
constrain 	its 	production.
8 	Reasonable 	health 	and 	safety 	regulation, 	..L..sL.., 	where
the 	drafters 	have 	fully 	taken 	into 	account 	the 	regulation's 	costs
as 	well 	as 	its 	benefits, 	can 	benefit 	consumers. 	As 	discussed
above, 	such 	regulation 	can 	appropriately compel 	producers 	to 	take
steps 	to 	kill 	harmful 	bacteria 	in 	raw 	milk 	and 	prevent
contamination 	of 	the 	milk 	product. 	Various 	disclosure
( continued ... )
4

Act 	does 	not 	address 	these 	health 	and 	safety 	issues 	but 	is 	a
purely 	economic 	regulation 	that 	cannot 	be 	justified 	unless 	the
markets 	for 	the 	production 	and 	distribution 	of 	milk 	are 	affected
by 	a 	market 	failure 	that 	leads 	to 	anticompetitive 	conduct.
«
In 	the 	milk 	distribution 	industry, 	a 	single 	distributor 	or
retailer 	does 	not 	appear 	able 	to 	exercise 	market 	power 	to 	raise
prices. 9 	Improved 	milk 	processing 	and 	distribution 	technologies
have 	made 	it 	possible 	for 	both 	raw 	and 	processed 	milk 	to 	be
transported 	considerable 	distances, 	greatly 	increasing 	the
geographic 	area 	of 	competition. 10 	Any 	attempt 	by 	an 	individual
firm 	to 	reap 	greater-than-competitive 	profits 	or 	to 	provide 	less-
than-competitive 	service 	is 	likely 	to 	be 	thwarted 	by 	a
competitive 	response 	from 	other 	firms 	in 	the 	market 	or 	potential
entrants. 	Indeed, 	incumbent 	firms 	are 	unlikely 	to 	attempt 	to
exploit 	market 	power 	when 	they 	know 	that 	any 	short-term 	profit
gained by 	overcharging 	or 	underserving customers 	may 	be more 	than
offset 	by 	the 	loss 	of 	those 	customers 	and 	associated 	normal
profits 	for 	the 	foreseeable 	future. 11
-,
Concerns, 	such 	as 	those 	expressed 	in 	Section 	258-s 	t'hat
specific 	"dominant" 	purchasers 	of 	milk 	may 	exploit 	market 	power
in 	a 	manner 	injurious 	to 	sellers, 	similarly 	appear 	unwarranted.
Numerous 	prospective 	purchasers 	from 	a 	multi-state 	area 	offer
,8 ( ... continued)
regulations 	can 	also 	benefit 	milk 	consU!l1ers. 	However, 	since
these 	existing 	health 	and 	safety 	regulations 	are 	not 	found 	in 	the
Dairy 	Trade 	Practices 	Act, 	but 	in 	other 	laws 	not 	facing 	repeal,
we 	do 	not 	address 	their 	merits 	in 	this 	comment.
9 	We 	recognize 	that 	price 	levels 	for 	raw milk 	are 	largely
determined by Federal 	and 	state 	milk marketing 	Orders. 	The 	State
Commissioner 	of 	Agriculture 	and 	Markets 	can 	and 	has 	established
minimum wholesale 	prices 	for 	raw milk. 	N.Y. 	Agric. 	& Mkts. 	Law, 	§
258-m 	(McKinney 	1988). 	This 	comment 	does 	not 	express 	an 	opinion
as 	to 	the 	appropriateness 	of 	raw milk 	price 	supports. 	We 	believe
that 	competition 	in 	the 	distribution 	of 	processed 	milk 	products
will 	assure 	consumers 	an 	adequate 	supply 	of 	such 	products 	at 	the
lowest 	mark-up 	above 	the 	prevailing 	raw 	milk 	price, 	whether 	that
raw milk price 	be 	determined 	by Orders 	or by market 	forces.
10 	The 	New 	York 	legislature 	has 	recognized 	that 	the
present-day pool 	of 	potential 	marketers 	of 	milk 	in New York 	State
extends 	throughout 	the 	greater 	part 	of 	the 	state, 	well 	into 	New
Jersey 	and 	Connecticut, 	and 	even 	into 	other 	New 	England 	states.
s..e.e. 	Declaration 	of 	Policy, 	N. Y. 	Agric. 	& 	Mkts. 	Law 	§ 	258-p
(McKinney 	1988).
11 	~ Matsushita 	Elec. 	Indus. 	Co. 	y. 	Zenith 	Radio 	Corp.,
475 	U.S. 	574, 	106 	S. 	Ct. 	1348, 	1357-58 	(1986).
5

alternatives 	to 	any 	seller 	subjected 	to 	lower-than-competitive
offers 	from 	a 	locally 	"dominant" 	firm. 	Further, 	New 	York 	dairy
farmers 	lawfully may 	join 	together 	in cooperative 	associations 	to
sell 	their 	output, 	thus 	enablin? 	them 	to 	negotiate 	from 	a
position 	of 	significant 	strength. 	2 	In 	adg.ition, 	if 	actually
faced 	by 	a 	purchaser 	able 	to 	exert 	significant 	power, 	sellers
operating 	through 	cooperative 	associations 	might 	enter 	the
distributor's 	market 	(~, 	integrate 	forward) 	in 	order 	to 	bypass
that 	purchaser.
Therefore, 	a 	significant 	market 	failure 	in 	the 	State's 	milk
distribution 	industry 	appears 	unlikely. 	However, 	should 	the
Council, 	with 	its 	specialized 	knowledge 	of 	this 	industry,
conclude 	that 	the 	threat 	of 	market 	failure 	is 	so 	great 	as 	to
warrant 	a 	prophylactic 	response,. 	regulation 	would 	be 	appropriate
only 	to 	remedy 	the 	specific 	likely 	failures 	identified, 	and 	then
only 	if 	the 	benefits 	of 	the 	regulation 	exceeded 	its 	costs.
IV. 	EXISTING 	FEDERAL 	AND 	STATE 	LAWS 	ARE 	SUFFICIENT 	TO 	PROTECT
CONSUMERS 	FROM 	ECONOMICALLY HARMFUL 	PRACTICES
A 	competitive 	milk 	market 	can 	be 	expected 	to 	satisfy
efficiently 	the 	dairy 	needs 	of 	New 	York 	cOllsumers, 	while 	at 	the
same 	time 	affording 	to 	New 	York 	State's 	dairy-related 	businesses
equal 	opportunity 	to 	succeed 	(or 	fail) 	based 	upon 	their
ingenuity, 	skill 	and 	effort. 	Effective 	competition 	in 	New 	York
State's 	milk 	markets 	does 	not· 	appear 	to 	be 	impaired 	by
significant 	market 	failure; 	nevertheless, 	these 	markets, 	like 	any
markets, 	must 	be 	protected 	from 	anticompetitive 	acts 	of 	their
participants. 13 	This 	protection 	is 	afforded 	by 	federal 	and 	state
antitrust 	statutes. 	The 	Sherman Act 	broadly 	proscribes 	concerted
action 	in 	restraint 	of 	trade 	and 	attempted 	and 	actual
monopolizatiorr. 14 	The 	Federal 	Trade 	Commission 	Act 	proscribes
"unfair methods 	of 	competition."lS 	New York 	State's 	Donnelly 	Act
contains 	a 	Sherman 	Act-like 	proscription 	of 	concerted 	action 	in
12 	N. Y. 	Gen. 	Bus. 	Law 	§ 	340.3 	(McKinney 	1988) 	and 	7
U.S.C. 	§§291-293 	(West 	1983) 	(Capper-Volstead Act).
13 	As 	noted 	above, 	in 	addition 	to 	tne 	Dairy 	Trade
Practices 	Act, 	many 	Federal 	and 	state 	laws 	and 	regulations 	govern
this 	industry 	and 	prevent 	it 	from 	operating 	as 	an 	unfettered
market. 	Nevertheless, 	we 	believe 	that 	the 	expiration 	of 	the 	Act
will 	increase competition.
14
1S
15 	U.S.C. 	§§ 	1-7 	(West 	1983).
15 	U.S.C. 	§ 	45 	(West 	1983).
6

16
restraint 	of 	trade. 16 	The 	Clayton 	Act 	proscribes 	specific
practices 	such 	as 	exclusive 	dealing 	and 	tying 	arrangements 17 	and
price 	discrimination 18 	to 	the 	extent 	that, 	in 	any 	particular
instance, 	they 	are 	likely 	to 	impair 	competition 	and 	provides 	for
private, 	treble 	damage 	actions 	to 	enforce 	both 	the 	Sherman 	and
Clayton Acts. 19 	(
These 	statutes 	generally have 	been 	interpreted 	by 	the 	courts
in 	a 	manner 	that 	distinguishes 	between 	vigorously 	competitive
conduct, 	includin~ aggressive 	pricing 	practices, 	and 	competition-
injuring 	conduct. 	0 	In 	contrast, 	the 	Dairy 	Practices 	Act 	may
sweep 	too 	broadly, 	condemning 	aggressive 	pricing 	that 	does 	not
injure 	competition, 	thereby 	depriving consumers 	of 	the 	benefit 	of
competition. 	For 	example, 	whereas 	courts 	interpreting 	the
Sherman 	Act 	have 	avoided 	erroneous 	condemnation 	of 	vigorously
competitive 	pricing, 	the 	Dairy 	Practices 	Act 	condemns 	pricing
below 	cost 	if 	even 	a 	single 	competitor 	is 	thereby 	eliminated,
irrespective 	of 	whether 	the 	pricing 	practice 	injures 	or 	promotes
the 	competitive 	process. 21
V. 	CONCLUSION
We 	believe 	that 	the 	interests 	of 	New 	York 	consumers 	and
businesses 	are 	best 	served 	through 	the 	fostering 	of 	free 	and
competitive 	markets. 	In 	a 	free 	market, 	competition 	will
encourage 	the 	milk 	industry 	to 	satisfy 	consumer 	preferences 	in
N. Y. 	Gen. 	Bus. 	Law 	§ 	340.1 	(McKinney 	1988). 	The
Council 	may 	wish 	to 	suggest 	that 	the 	Legislature 	consider
limiting 	the 	scope 	of 	the 	exemption 	from 	the 	Donnelly 	Act 	of
Section 	340.3 	of 	the General 	Business 	Law. 	The 	New 	York 	Court 	of
Appeals, 	in 	State V. 	Glen 	& Mohawk Milk 	Ass'n, 	61 	N.Y.2d 	705, 	460
N.E.2d 	1091, 	472 	N.Y.S.2d 	606 	(1984), 	determined 	that 	Section
340.3 	permits 	agricultural 	cooperatives 	to 	engage 	in, 	among 	other
things, 	collective 	refusals 	to 	purchase. 	~ 	State 	VI 	Glen 	&
Mohawk 	Milk 	Ass'n, 	93 	A.D.2d 	975,461 	N.Y.S.2d 	648 	(4th 	Dep't
1983) . 	Section 	340.3 	should 	not 	"provide 	blanket 	immunity 	for
all 	monopolistic 	and 	anti-competitive 	practices 	of 	these
cooperatives."(Doerr, 	J, 	dissenting.) 	In 	general, 	exemptions 	from
antitrust 	law 	should 	be 	disfavored.
17
18
19
20
U.S. 	574,
21
15 	U.S.C. 	S 	14 	(West 	1983}.
15 	U.S.C. 	§ 	13 	(West 	1983) 	(Robinson-Patman Act) .
15 	U.S.C. 	S 	15 	(West 	1983).
E.q. I Matsushita 	Elec. 	Indus. 	Co. 	v. 	Zenith Radio, 	475
106 	S. 	Ct. 	1348, 	1357-8 	(1986) I
N.Y. 	Agric. 	& Mkts. 	Law, 	S 	258-u 	(McKinney 	1988).
7

the 	most 	efficient 	manner, 	maximizing 	consumer 	choice 	while
ensuring 	that 	consumers 	pay 	the 	lowest 	competitive 	price. 	The
New 	York 	milk 	industry 	does 	not 	appear 	prone 	to 	any 	market
failure 	requiring 	regulatory 	intervention. 	Indeed, 	the 	Dairy
Trade 	Practices 	Act 	in 	some 	respects 	may 	facilitate, 	rather 	than
cure, 	market 	failure 	by 	preventing 	aggressive' competition 	and 	so
denying 	the 	benefits 	of 	competition 	to 	the 	consumers 	and 	busi-
nesses 	of 	the 	State.
For 	these 	reasons, 	we 	believe 	that 	New 	York 	consumers 	will
benefit 	if 	the 	Dairy Trade 	Practices 	Act 	is 	allowed 	to 	expire 	and
is 	not 	replaced 	by 	further 	special 	regulation 	of 	the 	New 	York
State milk 	industry.
We 	appre~iate 	the 	opportunity 	to 	comment.
Very 	truly yours,,
-----._-
Michael 	Joel 	Bloom
Director
New 	York 	Regional 	Office
8