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CONSUMER BEAT

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But don't look for milk coupons in Mass.

Massachusetts consumers can clip coupons for everything from cereal to chocolate chips, but milk -- a staple in most homes -- is off-limits.

A nearly 40-year-old state law effectively prevents milk processors and retailers from offering coupon discounts on their milk and cream products, something they do regularly in other states and would like to do here.

"We would love to have a level playing field and be able to compete against the drinks we compete against, like orange juice," said Marguerite Copel , a spokeswoman for Dean Foods of Dallas, the largest dairy processor in the nation and the owner of the Garelick Farms dairy in Franklin.

But state officials are worried that a level playing field for beverage companies would result in an unlevel playing field for Massachusetts dairy farmers.

"We remain concerned about how a change in the laws is going to impact the milk markets, particularly at the farm level," said William Gillmeister , an economist with the state's Agriculture Resources Department.

Edward Kabak , chief legal executive at the Promotional Marketing Association in New York, said milk laws in general are throwbacks to the Depression era. He said 20 states still have traces of the laws, but they are disappearing fast. He said California, Iowa, and Kentucky have done away with their laws, but states such as Maine and Massachusetts continue to regulate milk closely.

"It's sort of a remnant of ancient history," he said. "These laws are anticonsumer. They prevent consumers from getting free offers and cents-off coupons."

The Legislature approved Massachusetts' milk coupon prohibition in 1967 as an add-on to laws dating from the early 1940s regulating the sale of milk. The move was intended to protect small dairy processors and farmers who bottle their own milk from being run out of business by milk companies with much deeper pockets. The law refers to pricing that would have the effect of "unfairly diverting trade from a competitor or otherwise injuring a competitor or of destroying or lessening competition."

The coupon prohibition hasn't prevented dairy farms from going out of business. In 1967, when the prohibition was passed, there were 1,730 dairy farms in Massachusetts. Today, there are 189.

But the mindset that led to the passage of the milk coupon prohibition still prevails at the State House. Dean Foods, H.P. Hood of Chelsea, and officials from the state's supermarket industry pushed last year for repeal of the milk coupon prohibition. They succeeded in getting a bill out of committee and to the House floor, but no further.

Representative Peter V. Kocot , a Northampton Democrat, said he spotted the bill just before it was scheduled to come up for a vote and succeeded in getting it sent back to committee, where it was killed.

Kocot acknowledged there are few dairy farms left in Massachusetts , but he said the state should be doing everything it can to preserve them, even if it means denying consumers access to coupon discounts.

Kocot said he feared the bill would allow companies like Stop & Shop to undercut the prices of small dairies like the Our Family Farms co-op in Greenfield, which bottles and sells it own milk.

"This is a threat to the economic viability of small farms," Kocot said. "We're trying to build their market. We don't want to throw obstacles in the way of their market increasing."

Faith Weiner , a spokeswoman for Stop & Shop, said the chain carries Our Family Farms milk at several of its stores in Western Massachusetts.

"We would never hurt anyone like that," she said. "We are the local supermarket and want to stay that way."

Officials at Our Family Farms could not be reached for comment.

Douglas Dimento , a spokesman for Agri-Mark, a Methuen dairy farmers cooperative, said he followed the coupon discussion closely last year and concluded that repealing the law would do more harm than good for farmers.

He said his cooperative witnessed the impact coupons can have when Kraft Foods used them last year to undercut the prices of cheese produced by Agri-Mark's Cabot Creamery.

"They couponed the hell out of us with Cracker Barrel cheese," he said.

The Massachusetts milk coupon prohibition was modified slightly in 2001, when the Agriculture Resources Department exempted flavored milk.

The department ruled that chocolate and strawberry milks represent a small portion of the market and compete more directly against soda and other beverages.

Claire Rosenzweig , president of the Promotional Marketing Association, said most companies find coupons are an effective way to market their products. She said 76 percent of Americans use coupons because they save money.

Lynne Bohan , a spokeswoman for Hood, said shoppers are price-sensitive and the company needs coupons to compete effectively against beverage companies selling teas, waters, and energy drinks.

"We're competing for share of stomach. We're not competing for share of dairy anymore," she said. "We believe in competition. We believe competition is healthy."

Bruce Mohl can be reached at mohl@globe.com.

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