SENATE BILL REPORT

SB 5692

BYSenators Bailey, Hansen, Barr, Anderson and Bauer

Allowing the marketing association of a cooperative to enter into discussions pertaining to milk agreements.

Senate Committee on Agriculture

Senate Hearing Date(s):February 19, 1987

Majority Report:  That Substitute Senate Bill No. 5692 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Hansen, Chairman; Anderson, Bailey, Barr, Gaspard.

Senate Staff:Tom McDonald (786-7404)

                  February 19, 1987

AS REPORTED BY COMMITTEE ON AGRICULTURE, FEBRUARY 19, 1987

BACKGROUND:

The Washington State Milk Pooling Act was enacted in 1971 to provide a means for milk producers to establish a market area pooling arrangement.  The Director of the Department of Agriculture is authorized to prescribe marketing areas, establish pooling agreements, and otherwise administer the Act.

Under the Act, milk dealers are defined as operators of a milk plant who collect milk from producers and disperse milk or milk products to establishments in the designated market area.  The Director can revoke or suspend a milk dealer's license if the dealer has been a party to fixing prices; however, collective marketing and sale of milk through a cooperative association organized under statutory authority is not to be considered a conspiracy in restraint of trade or an illegal monopoly.

Milk dealers, as well as other persons or entities, who assist in the marketing and sale of milk may be agents and not members of the cooperative association.  Although agencies of cooperative associations are recognized as a part of, or the same as, the association for the purposes of marketing and sales, the Milk Pooling Act does not state that agencies are protected like the cooperative associations from a presumption of acting in a conspiracy in restraint of trade.

SUMMARY:

A cooperative association making collective sales and marketing milk, or the agency of the association, will not be deemed to be conspiring in restraint of trade or an illegal monopoly.

EFFECT OF PROPOSED SUBSTITUTE:

A cooperative association making collective sales and marketing milk, directly or through a marketing agent, will not be deemed to be conspiring in restraint of trade or an illegal monopoly.

Fiscal Note:      none requested

Senate Committee - Testified: Dan Coyne, Washington State Dairymen's Federation