ST. PAUL — A Minnesota state legislative committee has narrowly approved a bill that will prohibit businesses from price gouging essential goods and services during emergencies, including the pandemic.
The House Commerce Committee on Friday, Feb. 26 passed the bill by an 8-7 vote. The bill would establish civil penalties for businesses who price gouge during public emergencies, fining them up to $1,000 per transaction. The bill carves out an exception for retailers if the price of what they’re selling, such as food or paper goods, increases further up the supply chain.
Thirty-five other states in the country have anti-price gouging laws on the books, one of which is Texas. State Rep. Zack Stephenson, D-Coon Rapids, who authored the bill, pointed to the recent extreme weather, dangerous power outages and drinking water shortages throughout Texas as evidence that anti-price gouging legislation is necessary. Because of their existing laws, businesses found to be price gouging can face fines of up to $250,000.
“Fortunately for Texans, their state has a law against price gouging in an emergency,” he said. “Minnesota, by contrast, has no such law and our citizens would be without recourse if something like what happened in Texas were to happen here.”
The bill has the support of Attorney General Keith Ellison, who told the committee on Friday that, “Protecting Minnesota consumers from being taken advantage of by predatory pricing practices in the middle of a public health crisis, weather disaster and other emergencies is fundamental to helping all Minnesotans fund their lives and live with dignity and respect.”
The Minnesota Retail Merchants Association supports the current form of the bill, President Bruce Nustad told the committee Friday. But Minnesota Grocers Association President Jamie Pfuhl said she is concerned the bill could put undue burden on small grocers, who could be tasked with proving their own increased costs should they increase prices during an emergency.
“The bill before you today is very well intended and we understand the purpose and the direction, but it does not lay all the foundation to address some of these complexities,” she said.
Several Republicans on the committee also took issue with the bill, saying that price increases during crises are often the result of supply and demand economics. Some suggested that dramatically increased prices can stave people off from hoarding essentials, as was done at the start of the pandemic.
State Rep. Eric Lucero, R-Dayton, pointed to dramatically increased fuel prices immediately after 9/11. If prices hadn’t shot up, he said people could have hoarded and drained gas supplies.
“That was not an example of somebody trying to gouge or take advantage of misery, as it’s been characterized,” Lucero said. “It wasn’t bad actors trying to profit. It was simply a response to market forces.”
Stephenson then accused his Republicans colleagues of “suggesting that that’s just fine that the way we should ration supplies during an emergency is on an ability-to-pay basis.”
“Your ability to provide food, water, housing, essential things for your family during an emergency, it’s fine for that to depend on if you have enough cash in the account to pay exorbitant prices and it’s fine that certain people profit off that,” he said. “I don’t think that’s fine and I don't’ think most Minnesotans think that’s fine.”