Sale of milk, cream, butter or fresh dairy products below cost.
1. No distributor or retailer may sell fluid milk, fluid cream, butter or any fresh dairy product below cost.
2. In determining the cost for a distributor who processes or manufactures fluid milk, fluid cream, butter or any fresh dairy product, the following factors, in addition to any other factor acceptable to the Commission, must be considered:
(a) Cost of raw products based on actual cost or on current and prospective supplies of fluid milk and fluid cream in relation to current and prospective demands for fluid milk and fluid cream.
(b) Cost of production.
(c) Reasonable return on capital investment.
(d) Producer’s costs for transportation.
(e) Cost of compliance with health regulations.
(f) Overhead.
3. In determining the cost for a peddler-distributor or retailer, the following factors, in addition to any other factor acceptable to the Commission, must be considered:
(a) Purchase price of the product.
(b) Overhead for handling.
(c) Reasonable return on capital investment.
4. For the purposes of subsections 2 and 3:
(a) Reasonable return on capital investment must be calculated per unit of production by dividing the product of:
(1) The net capital investment; and
(2) The reasonable rate of return on capital investment,
Êby the total sales per unit of production. “Net capital investment” includes land, buildings, equipment and any other capital asset used as a rate base. A reasonable rate of return on capital investment shall be deemed to be the rate fixed for 6-month United States treasury bills at the auction in the first week of the month of January or July immediately preceding the date that the reasonable return on capital investment is calculated.
(b) Costs for overhead must be determined according to generally accepted principles of accounting and allocated proportionately to each unit of production. Costs for overhead include salaries for executives and officers of the company, all other costs of labor, including indirect costs, rent, depreciation, costs for maintenance, costs incurred in delivering the product, fees for licenses, taxes and insurance, cost of materials, costs for repairs, the cost of electricity and other public utilities, and all other costs that relate to the sale and distribution of the product. Any expense incurred in the marketing of a finished or manufactured dairy product which cannot be attributed directly to a particular product must be apportioned to the product on a basis consistent with generally accepted principles of accounting relating to costs.
5. Each distributor who processes or manufactures fluid milk, fluid cream, butter or any fresh dairy product and each peddler-distributor shall file with the Commission a statement of costs, listing separately, and as applicable, the items set forth in subsection 2 or 3 of this section and any other applicable factors relating to cost. The statements must be kept current as prescribed by regulations adopted by the Commission. All statements must be kept confidential by the Commission except when used in judicial or administrative proceedings pursuant to NRS 584.325 to 584.670, inclusive.
6. Each distributor who processes or manufactures fluid milk, fluid cream, butter or any fresh dairy product and each peddler-distributor shall file with the Commission lists of wholesale prices and of minimum retail, distributor and dock prices. No distributor may sell at wholesale prices other than, or at retail, distributor or dock prices less than, those contained in the appropriate list, except in the case of bids to departments or agencies of federal, state and local governments. In no case may the distributor sell or offer to sell below cost.
Last modified: February 26, 2006