THREAT OF FOOD MONOPOLY
Follette, Sen. Robert M. La Jr.
Threat Of Food Monopoly By SEN. ROBERT M. LA FOLLETTE, Jr. THERE has been an unfortunate tendency on the part of the general public to regard the oleomargarine-butter controversy as a more or less...
...It is true that the oleomargarine manufacturers are making strenuous efforts to drag the cotton farmer, the spy bean grower, and the great mass of urban consumers into the argument on their" side...
...No one challenges the right of the oleomargarine producers to manufacture and sell their product on its own merits, but when they attempt to utilize the butter coloring, it involves an element of unfair competition and consumer deception on which the public is entitled to intervene through legislative and regulatory measures...
...The ugly menace of monopoly is not confined to the great industrial centers of the nation...
...It is a matter of gravest public concern as to whether we are going to preserve for the future an agricultural industry based upon the rugged character of independent farmers as we have known in the past, or permit monopoly products to steal their market, ruin them financially, and turn them into slaves of the processing mills owned and controlled by the food trust...
...It is a natural food...
...If tike butter industry goes down before the onslaught of monopoly, the entire dairy industry, representing an investment of approximately thirty billion dollars, will be confronted with disaster...
...Its repeal would strike the industry a staggering blow...
...They can color it themselves if they desire...
...In the end the consumer would have suffered the most because the drive to monopolize the food industry would then be close to its goal...
...The purpose of such an assumption is to deny the legitimacy of any public intervention such as the present taxes upon oleomargarine...
...It may be added that 99-8/10 per cent of- the oleomargarine manufactured and sold in the United States is uncolored and is therefore not subject to the 10 cents tax...
...It threatens not only the future of industries like oil, aluminum, steel, rubber, and the other similar basic industries...
...Upon the outcome of this issue will depend to a large extent the economic and social shape of things to come in vast areas in this country...
...There is no doubt but what butter can take care of itself in any fair competitive contest with aspiring substitutes such as oleomargarine...
...There is still much to be learned, and that applies to research on products such as butter and oleomargarine...
...It is to be expected that once the color tax is eliminated, colored oleomargarine will be sold at a price from 5 cents to 7 cents a pound above the present price for the uncolored commodity...
...Butter is the balance wheel of the entire dairy industry...
...At the present time the oleomargarine interests are conducting the biggest advertising campaign in their history, and even though 99-8/10 per cent of the oleomargarine manufactured and sold in the United States is uncolored, oleomargarine manufacturers are resorting to the deception of coloring their product as pictured in their advertising, so that it resembles the appearance of butter...
...Nutritional research, in spite of the great gains made in recent years, still does not offer any basis on which any final and categorical comparison of food values can be made...
...It now produces more than 600 million pounds of margarine a year, which is practically equivalent to one-third of the total fats in butter...
...It is a superior product in taste and texture, as well as in nutritional value...
...There is no great controversy over the first tax...
...In contrast, the butter industry is made up of over 4,600 plants scattered throughout the nation...
...The oleomargarine industry is a highly centralized, closely knit, group...
...It has already undermined the independence and the competitive character of the American food industry, and is now seeking to expand its domain over agriculture itself...
...The outcome of the fight to repeal the tax on colored oleomargarine will have a far reaching effect on the dairy industry...
...But through- -out the mounting tide of propaganda sweeping over the radio, the newspapers, and even the staid and conservative periodicals, there is the implicit assumption that the entire controversy is but an incident in the normal competitive struggle between two products seeking an advantage in the American market-place...
...Actually, the controversy is much more than a private argument between two producer groups, or a mere competitive rivalry between two products...
...So far as the Federal law is concerned, those consumers who are in need of a low-cost spread, and who cannot afford butter, can secure uncolored oleomargarine at a price between 17 cents and 29 cents a pound...
...A great many of them are .cooperatively owned and operated by the farmers themselves...
...18 Firms Control Output The aggressive campaign launched by the oleomargarine producers at this time is one very important phase of monopoly's all-out offensive for control of American agriculture...
...The tax of one-quarter of one cent per pound is absorbed by the manufacturer, and adds nothing to the price the consumer pays...
...This practice was called to the attention of the Federal Trade Commission in the recent case against The Best Foods, Inc., but the Commission dismissed the charges upon information that the company had discontinued such advertising...
...It has no bearing upon the competitive position of oleomargarine as related to butter...
...Now, however, the consuming public is being bombarded again with glittering advertisements presenting oleomargarine as great chunks of golden yellow goodness, and the public is entitled to insist that the Federal Trade Commission go after such advertising at once...
...The whole foundation of agriculture would be gravely shaken...
...One is a tax of one-quarter of one cent per pound on the production of uncolored oleomargarine...
...The consequence of such a catastrophe would be borne not by a comparatively few heavy investors, but rather by four and one-half million farm families whose livelihood is at stake...
...This is an issue of economic democracy, a way of life...
...The consumer would do well, however, to look behind the arguments advanced by the oleomargarine lobby...
...Taken altogether, they furnish the outlet from 35 per cent to 40 per cent of the milk produced on four and one-half million farms...
...The cost of coloring the product amounts to approximately one cent per pound...
...The controversy arises over the Federal tax of 10 cents per pound on the oleomargarine that is artificially colored to look like butter...
...This is clearly demonstrated by the fact that in the past four years its production has increased approximately 100 per cent...
...This was the issue in recent clashes in Congress over the Federal tax on oleomargarine...
...THERE has been an unfortunate tendency on the part of the general public to regard the oleomargarine-butter controversy as a more or less private argument between the margarine manufacturers on the one hand, and the dairy farmers on the other...
...This production is turned out by only 72 plants, which are in turn owned by only 18 different concerns...
...The other is a tax of 10 cents per pound on oleomargarine that is artificially colored to look like butter...
...If the tax on colored oleomargarine is repealed, the artificially-colored product will immediately replace the uncolored variety because of its greater sales appeal, thanks to the artificial resemblance to butter...
...The comparisons made are only tentative...
...The consumer, therefore, can properly regard the attack now leveled against the Federal tax on oleomargarine as a "gift horse" that will ultimately be used against him...
...For the most part they are small plants...
...Consumer Would Suffer Most The manufacturers of oleomargarine have wept copiously about the consumer, in attempting to secure the repeal of the tax on colored oleomargarine...
...There are two Federal taxes on oleomargarine...
...Those who seek to protect and preserve the dairy industry ask only that it be protected from unfair competitive practices...
...But the farmer would not be the sole victim...
Vol. 8 • March 1944 • No. 13
