SECTIONS 61381-61391 - California Statutes

FOOD AND AGRICULTURAL CODE

SECTION 61381-61391

61381. Any false or misleading advertising, as defined in Sections
32914 and 36062 of this code, and Sections 17500, 17501, and 17502 of
the Business and Professions Code, of milk, cream, or any dairy
product is an unlawful practice.

61382. Discrimination in price between distributors or between
wholesale customers, or between consumers, that purchase milk, cream,
or any dairy product of like grade and quality under like conditions
of service if the effect of that discrimination may be substantially
to lessen competition or to injure or destroy or prevent competition
with the person that either grants or knowingly receives the benefit
of the discrimination is an unlawful practice. This section does
not, however, prevent differentials which make only due allowance for
differences in the cost of the raw product which is used in the
milk, cream, or dairy product, or the cost of manufacture,
processing, sale, or delivery which results from the different
methods or quantities in which the commodities are manufactured,
processed, sold, or delivered.

61383. The sale or offer to sell or giving of any article in any
transaction which involves the sale or disposal of milk, cream, or
any dairy product, for less than the cost of the article, as "cost"
is defined in Section 61384, to secure or retain the milk, cream, or
dairy products business of any wholesale customer or any person that
buys as a consumer is an unlawful practice.

61384. (a) The sale by any retailer, wholesale customer,
manufacturer, or distributor, including any producer-distributor or
nonprofit cooperative association acting as a distributor, of milk,
cream, or any dairy product at less than cost is an unlawful
practice. This subdivision applies to finished products, and does not
apply to sales of bulk milk between handlers.
(b) For the purposes of this section, the following terms have the
following meanings:
(1) "Cost," as applied to manufacturers and distributors, means
the total consideration paid or exchanged for raw product, plus the
total expense incurred for manufacturing, processing, handling, sale,
and delivery.
(2) "Cost," as applied to wholesale customers, means the invoice
price charged to the wholesale customer, or the expense of
replacement, whichever is lower, plus the wholesale customer's cost
of doing business.
(3) "Cost of doing business," as applied to wholesale customers,
means a wholesale customer's total operating expense divided by the
customer's total sales income.
(4) (A) Except as provided in subparagraph (B), "total
consideration paid or exchanged for raw product," in the case of
market milk or market cream used in the manufacture of class 1, 2,
and 3 products, means the department's current announced regulated
minimum price of the market milk or market cream, payable by handlers
to producers, except as provided in Section 62708.5.
(B) Notwithstanding subparagraph (A), in situations involving
sales on a bid basis to public agencies or institutions, the
definition in subparagraph (A) shall only apply to market milk or
market cream that is utilized for class 1 purposes, as those purposes
are defined in Chapter 2 (commencing with Section 61801).
(c) Proof of cost, based on audits or surveys conducted in
accordance with generally accepted accounting principles as defined
by the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board, and modified, if necessary, to
satisfy the requirements of this section, shall establish a
rebuttable presumption of that cost at the time of the transaction of
any sale. This presumption is a presumption affecting the burden of
proof, but it does not apply in a criminal action.
(d) Nothing in this section shall be deemed to prohibit any of the
following activities:
(1) The meeting, in good faith, of a lawful competitive price or a
lawful competitive condition.
(2) A distributor's action in making conditional sales of
equipment or other property, extending credit for merchandise
purchased, or paying a customer's obligations not otherwise
prohibited by this chapter to another distributor in connection with
the transfer of the customer's business from the latter to the
former.
(e) The secretary shall establish, by regulation pursuant to
Section 61341, the procedures which shall be used to make the
determinations required by this section, including the following:
(1) Any modifications to the generally accepted accounting
principles described in subdivision (c) necessary to satisfy the
requirements of this section.
(2) Procedures for evaluating efforts to meet lawful competitive
prices or conditions.
(3) Other procedures necessary or appropriate to facilitate the
application or enforcement of this section.

61385. Any false statement or representation which is knowingly
made, by any wholesale customer or consumer, or anyone that is acting
on the behalf of either, to any distributor or manufacturer, or any
representative of a distributor or manufacturer, that a competitor of
the distributor or manufacturer has offered or is offering to sell,
or is selling milk, cream, or any dairy product to the wholesale
customer or consumer at a lower price than the manufacturer or
distributor has offered or is offering to sell, or is selling it is
an unlawful practice.

61391. Solicitation by, or collusion or joint participation between
or among, any manufacturer, distributor, producer, wholesale
customer, consumer, or any representative of any of them, to commit
any of the unlawful practices which are prescribed in this article,
or the use of any misrepresentation, threat, intimidation, or boycott
to effectuate the commission of those unlawful practices, makes any
person that participates in those unlawful practices subject to the
penalties of this chapter.