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Chains Slash Prices in Wake of Farmlands Ruling

January 16, 1987

NEW YORK (AP) _ Milk prices at chain grocery stores plummeted Friday by 60 to 70 cents a gallon because of the entry of New Jersey milk into the metropolitan market, store officials said.

Whole milk at at least four major chains cost precisely the same - $1.99 a gallon, $1.09 a half gallon and 59 cents a quart Friday.

Milk from Farmland Dairies of Wallington, N.J., was stocked at 24 Grand Union supermarkets throughout New York City and Long Island, including a store on Manhattan’s Upper East Side that attracted a protest by Teamsters who said jobs will be lost if the state’s milk licensing law is weakened or eliminated.

A federal judge last week gave Farmland permission to extend sales from Staten Island to Manhattan, the Bronx, Brooklyn and Queens, over the objections of New York milk producers who had been protected by state law from competition from New Jersey for half a century.

U.S. District Judge Leonard D. Wexler did not strike down the state law, but ruled unconstitutional and ″protectionist″ a ruling by former Agriculture Commissioner Joseph Gerace denying Farmland permission to extend its market.

Grocery chains dropping their prices Friday were Grand Union, A&P and Sloan’s. D’Agostino Supermarkets Inc. said it cut its prices Thursday.

A&P, Sloan’s and D’Agostino were not stocking Farmland milk, but A&P spokesman William Vitulli said ″We’re studying the situation.″

Farmland President Marc Goldman said Friday that he could reach agreement with other chains within hours or days.

He said he’d already ordered 10 new trucks and five new trailers to handle increased demand. ″I hope we’ll need even more,″ he said.

Mary Ellen Callahan, buyer of dairy and frozen foods for Sloan’s Supermarkets Inc., said prices had been marked down from $2.59 a gallon, $1.39 a half-gallon and 71 cents a quart.

A&P dropped its prices from $2.49 a gallon, $1.39 a half-gallon and 71 cents a quart, said Vituli, adding that matching the lowest price around ″has been our policy constantly. It’s a high-image, competitive item.″

D’Agostino prices had been $2.63 a gallon, $1.41 a half- gallon and 72 cents a quart.

Milk producers and union members said a price war would produce temporary bargains, but will eliminate smaller milk suppliers and hurt independent grocery stores.

″In a price war, the only winner is the company or companies that cause that price war,″ said New York Milk Industry Council spokesman Stephen Mangione. ″In the long run, the state loses an industry.″

Mangione said New Jersey has ″far more lax″ health standards than New York and New Jersey producers benefit from lower utility rates, wage scales and taxes.

At the Grand Union store on East 86th Street Friday, cartons and jugs of whole, lowfat and skim milk filled a section of the dairy case.

Outside, shouting Teamsters forced Grand Union officials to move a press conference from in front of the store to the basement.

Local 584 President William Whelan said 2,500 union jobs were threatened by deregulation of the state milk industry.

″Deregulation of an industry is a typical union-busting tactic,″ Whelan said. He said New Jersey milk is delivered by members of Teamsters Local 680, meaning his drivers would get less work and put in jeopardy Local 584′s pension fund.

But City Councilman Noach Dear, a major proponent of the change, labeled ″nonsense″ Teamster claims that jobs would be lost, saying milk producers ″are not going to be selling less milk, they’ll be selling more milk.″

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