Milk retailer agrees to raise prices, settling complaint it sold below cost

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By Greg Sukiennik, Associated Press, 1/8/2003 21:11

BOSTON (AP) A supermarket chain agreed Wednesday to raise the prices of its milk following a state investigation into allegations it was selling milk below cost in violation of state law.

Midland Farms, Inc. did not acknowledge the charge, saying it had already spent $100,000 in fees defending itself and could not afford to continue.

''We have struggled for months to satisfy the state that our no-frills approach to retailing allows us to sell at a very competitive price,'' company president Demetrios Haseotes said in a prepared statement.

Massachusetts regulators threatened legal action on finding out that the small supermarket chain was selling milk at as little as $1.49 a gallon at stores in Brockton, Lynn and Seekonk. The regulated prices that dairy farmers receive for their milk have dropped to an 11-year low, but the retail prices haven't changed, with the statewide average price for milk reaching $2.29 a gallon.

As part of its investigation into Midland Farms, the state's own agricultural economist determined most Massachusetts retailers were charging between 97 cents and $1.21 a gallon above the cost of putting milk on their shelves.

Farm and Agriculture spokeswoman Diane Baedeker Petit said the company had agreed to use the state's analysis to calculate new prices acceptable to the department.

''The state is not opposed to low milk prices,'' she said. ''It's the law you can't sell below cost.''

Easton-based Midland Farms said it would raise the cost to $1.68 per gallon for one percent and $1.88 per gallon for whole.

Previously, Haseotes said he is being victimized by an antiquated law to protect other retailers from competition and said his costs are lower than other retailers because his stores are low-overhead operations and he owns his own dairy-processing plant in Menands, N.Y.

-- Anonymous, January 09, 2003


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