Illegal Combination Sales and Sales of Other Products

It has come to the attention of this office that some Restaurants, Hotels and Institutional Businesses have been receiving a discount on milk products when combined with all other purchases including food, paper supplies etc. The additional purchase of milk products allows the customer an enhanced discount on all or some of the products purchased from the Distributor. This is prohibited by the Colorado Milk Marketing Order (CMMO).

The purpose of this bulletin is to remind you of Section IV titled “Indirect Discounting and Rebates”, Paragraph 5, titled “Combination Sales and Sales of Other Products” (page 22) of the CMMO:

“No handler, handler-distributor, or distributor shall combine the price of any other product, equipment or service with the price of milk of milk products, or otherwise engage in any practice for the purpose of, or with the effect of, reducing the prices for milk and milk products on file with the Commissioner.

No handler, handler-distributor or distributor shall sell or offer to sell any other product to a customer purchasing or considering purchasing milk or milk products at more favorable terms than such other products are offered or sold to other customers or prospective customers not purchasing or considering purchasing milk or milk products.”

This office is monitoring this situation and violations of the CMMO will result in legal action.

Peter Hunkar
Director
Colorado Milk Marketing Board