sale prices of margarine and cottonseed oil over many years.11 This chart definitely establishes that the two products have historically moved up and down together, and, furthermore, since decontrol of prices, oils have actually advanced much more rapidly than has margarine. 4. Finally, chart III attached shows the average retail price of margarine since decontrol. While food prices in general have risen very substantially, the trend of margarine prices has, on the whole, been downward. For the 3 months for which overlapping data are available, margarine prices have been under the levels of the same months a year earlier. (The data are given in table III.) A second good answer to this fallacious profiteering charge lies in the fact that profiteering is possible only if an industry is not competitively organized. The following characteristics of the margarine industry are familiar to every student of economics as earmarks of a competitive situation: 1. "Brand loyalty" is at a minimum. 2. The brands of the various manufacturers are similar in quality and other physical attributes. 3. All manufacturers distribute nationally or over a broad region and move additional tonnage into any market in which a temporary shortage exists. 4. Of the 24 qualified manufacturers who operate 44 margarine factories in the United States, 9 are relatively large publicly-owned companies, and 15 are in the small-business category. There has never been even the slightest tendency for the former to gain volume at the expense of the latter. 5. Today, and for many years past, important segments of the industry have not held membership in the Industry Trade Association. 6. A typical means of profiteering is limitation of output. Margarine production in 1947 was 100 percent over 1935-39 and 30 percent over 1946. It is very important to note that actually the greatest deterrent to competition in the industry is the web of restrictive Federal and State antimargarine laws. This legislation discourages entry of new firms, discourages the building of additional, more efficiently located plants, and holds output per plant at less than the most economic levels. The final answer to the profiteering charge is that it would be the worst possible business policy for margarine to be priced beyond the reach of any considerable number. Margarine combines high quality with inexpensiveness. It is a product for people in all income classes. TABLE I.-Average retail prices, butter and margarine, ratio, and spread, in cents; years, 1930-47; and months, 1946-48 11 To simplify the chart, data on cottonseed oil alone are plotted. The prices of soybean, corn, and peanut oils and of edible animal fats parallel that of cottonseed oil amost exactly. TABLE II.—Oleomargarine 1 and cottonseed oil, indexes of average wholesale prices [1926=100] Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Oleomargarine.. Cottonseed.. 61.7 66.8 69.9 67.8 67.8 67.8 67.8 67.8 67.8 67.8 67.8 67.8 117.9 1944: Oleomargarine. Cottonseed. 67.8 67.8 67.8 67.8 120.9 1945: Oleomargarine.. Cottonseed. 93.6 120.9 1946: Oleomargarine.. Cottonseed.. 1947: Oleomargarine.. Cottonseed. 93.6 93.6 93.6 93.6 11935-44: Oleomargarine, standard, uncolored, per pound, Chicago. 1945 to date: Oleomargarine, vegetable fat, f. o. b., New York. Source: Bureau of Labor Statistics. TABLE III.-Average retail price of margarine since decontrol, months, 1946-48 Approximate number and percentage of grocers licensed to sell margarine, January Source: Total number of retail grocers based on a 1947 report compiled by Dun & Bradstreet for Life magazine and adjusted according to estimates by the Department of Commerce and the Progressive Grocer. Number of licensed dealers in margarine obtained from the Bureau of Internal Revenue. |