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California and the West

Committee OKs Diluted Version of Milk Bill

State Senate: Measure sought to lower prices, but industry opposition reduces it to a grocery survey.


SACRAMENTO — In the face of stiff opposition from dairies, milk processors and grocery stores, grand plans to lower high milk prices have been pared back to the barest of essentials: a plan to survey grocery stores and post the results on the Internet.

Sen. Jackie Speier (D-Daly City), who tried to get the state out of milk pricing but saw her legislation gutted, said her amended bill, which trickled out of a key committee Tuesday on a 6-2 vote, is the best she can do this year.

Speier had introduced her bill after finding that milk prices had topped $4 a gallon in the state's metropolitan areas earlier this year. California milk is consistently among the country's most expensive.

A second bill, by Sen. Debra Bowen (D-Marina del Rey), aimed at removing the requirement that all milk sold in California be fortified with calcium and protein, died three weeks ago in the same committee, the Senate Agriculture and Water Resources Committee.

Consumer advocates who sponsored Speier's bill expressed disappointment, but are pinning their hopes on Speier's vow to reintroduce the bill next year.

"Let's keep the pressure on until we can get something else," said Elisa Odabashian, senior researcher with Consumers Union, the publisher of Consumer Reports.

Likewise, Mad About Milk, a consumer information effort funded by out-of-state dairies, saw the Speier bill as a foot in the door. "It lets us keep talking about it," said spokeswoman Audrie Krause.

Dairy representatives celebrated passage of the leaner bill Tuesday with hand-shaking and back-slapping inside and outside the hearing room.

They had vehemently opposed Speier's original bill, which removed the state's requirement that stores sell milk for no less than their cost plus overhead. Farmer and processor representatives feared that would put downward price pressure on them, and smaller grocers testified they were afraid large chains would slash prices just long enough to put them out of business.

Jim Tillison, executive director of the 1,500-dairy Alliance of Western Milk Producers, said the amended bill should fulfill Speier's intent of helping consumers by identifying where they can buy milk the most cheaply.

As now written, the Speier bill calls for the state to survey prices on all types of milk monthly in five stores in each of five regions.

The results from those stores, plus any others that voluntarily disclose their prices would be posted on the Internet and available through a toll-free number. Notification of the Web site address and the phone number would be displayed near the dairy case in all stores.

The state Department of Food and Agriculture estimated Tuesday that the survey program would cost more than $90,000 a year. Speier disputed those numbers, which could hurt the bill's chances of passing this year.

It was an exaggeration, Speier said, "to suggest the state needs to create a new fiefdom in the Department of Food and Agriculture."

Sen. Steve Peace (D-El Cajon) characterized as particularly absurd the estimated $31,500 cost of designing a database and Web site.

The price data the state would collect each month under the bill would be great research for future legislation, Speier said. Odabashian agreed, saying it could prove whether price cuts made during the heat of the lobbying against the bill the last few months will be sustained.

Behind the scenes, Speier has accused bill foes on the Senate Agriculture and Water Resources Committee of being beholden to the dairy industry. During Tuesday's hearing she lashed out at them publicly, telling committee Chairman Jim Costa (D-Fresno) that "if the [original] bill were taken to any other committee it would . . . be on the Senate floor by now."

A red-faced Costa--born into a San Joaquin Valley dairy family--voted for the gutted bill but gave Speier a private tongue-lashing after the hearing.

Costa had previously said he agreed that decades-old state dairy policies needed updating, but thought the Speier and the Bowen approaches were misguided.

Annual surveys by Consumers Union have repeatedly shown that milk is sold more cheaply at small mom-and-pop stores than at large grocery chains, despite economies of scale at the larger stores. By the same token, consumer buying studies show that people buy their milk wherever they shop for the rest of their groceries.

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