By: Tom Hebert
Indiana lawmakers are considering House Bill 1109, legislation that imposes price controls on certain nonalcoholic beverages by infringing on the right of businesses to engage in private contracts. If implemented, this legislation would harm small businesses and competition in the Hoosier state.
Under current law, all Indiana retailers negotiate their preferred terms directly with the nonalcoholic beverage industry, which allows stores to benefit from seasonal promotions and discounts. This setup allows Indiana stores, from small convenience stores to large chain grocery stores, to drive down prices and compete for customers.
HB 1109 upends this free-market system by banning distributors of packaged nonalcoholic beverages (with a weight volume of 8 ounces or more) to offer price discounts or seasonal promotions to retailers if they don’t offer the same deals to every store in the state. This is a backdoor price control that will lead to less discounts and promotions on soft beverages being offered to Indiana retailers, driving up prices for shoppers.
Small businesses in Indiana will be disproportionately affected if HB 1109 becomes law. Mom-and-pop shops rely on promotional deals to fill their shelves with the products their shoppers prefer. Since HB 1109 prevents retailers from negotiating the best position for their businesses, shoppers will naturally look elsewhere – even to neighboring states – for a better deal. This will cause a loss of income and jobs across the state as Indiana businesses and workers attempt to dig out from under the pandemic.
Lawmakers should also consider the runaway inflation that is hitting Indiana shoppers, with blame rightly falling on the reckless tax-and-spend policies of the Biden administration. Household budgets are stretched thin, with Hoosier families cutting coupons and chasing deals on everyday products just to make ends meet. If retailers can no longer offer discounts on soft beverages due to HB 1109, Indianans will know who to blame.
Lastly, legislating this way will lead to a whole host of unintended consequences for industries across the state. At its core, HB 1109 is an unwarranted government intrusion into the right of private contract between businesses. The bill’s central conceit is that the government knows how to negotiate a better contract than Indiana business owners. If legislators open the door to this type of government regulation, it is entirely likely that the left will weaponize this legislative model to target every industry with crippling new mandates.
Ultimately, HB 1109 will chip away at the right of private contract in Indiana, driving up prices for working families and opening the door to further government regulation of private businesses across the state. Hoosier retailers do not need the government telling them how to run their businesses or dictating the prices of the products they put on their shelves.