Press Release December 18, 1997	Contact: Elisa Odabashian, Policy Analyst 415-431-6747 Consumers Union West Coast Regional Office

CONSUMERS UNION DECLINES TO JOIN "MAD ABOUT MILK" CAMPAIGN

SAN FRANCISCO, CA – Consumers Union, nonprofit publisher of Consumer Reports, is not a member of the "Mad About Milk" campaign and has declined an invitation to join it. Consumers Union has more than a 15-year history of monitoring milk pricing in California, and advocates lower retail prices. However, Consumers Union does not believe the actions advocated by Mad About Milk will lead to lower retail prices for consumers.

The Arizona-based Shamrock Foods is a leader of the Mad About Milk campaign. The California Department of Food and Agriculture is suing Shamrock for continuing to sell milk in California below the state’s standards despite many warnings to stop the practice. The campaign proposes to lower California’s milk standards and allow unfortified milk to be sold in the state. The campaign also endorses an end to what it calls out-of-state milk "tariffs." The campaign also seems to encourage an end to the minimum farm price for California dairy farmers. Consumers Union opposes all of these proposals. Consumers Union does not believe that the actions advocated by the Mad About Milk campaign will result in lower prices for the milk customer.

Consumers Union has conducted a number of studies on the retail price of milk in Southern and Northern California. These studies show that the gap between the farm price and the retail price in the state is widening due to a common retailer-pricing pattern. Specifically, when the farm price increases, retailers pass this on to consumers with a mark-up; when the farm price declines, retailers rarely pass on much of the savings to consumers.

"We oppose any effort to lower the quality and nutritious value of milk in California," said Elisa Odabashian, policy analyst with Consumers Union who has authored a number of reports on milk prices in the state. "The Mad About Milk campaign promotes an unnecessary step backwards. Additionally, we believe the consumer milk price in California is tied more to the actions of retailers than to the California farm price. There’s no reason to believe that dropping the minimum farm price or doing away with the pooling system the campaign calls ‘tariffs’ would translate into lower prices at the check-out counter."

Consumers Union agrees with one assertion of the Mad About Milk campaign regarding the sales-below-cost regulation in California. The state currently bans such sales. Consumers Union believes this regulation should be changed to allow milk "specials," which would encourage competition and lower the price for consumers.

"We’ve been advocating lower retail milk prices for years," Odabashian said. "And we’ll continue to pursue changes that would benefit consumers. We don’t believe Mad About Milk’s agenda will do that."