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. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Saturday, March 19, 2005

The Old Margarine/Butter Controversy

The Emirates Economist posted recently about a Canadian Supreme Court ruling, upholding a Quebec regulation that Quebecois must buy white margarine instead of margarine coloured to look like butter.

[The court] confirmed the rulings of the Quebec Superior Court in 1999 and the Quebec Court of Appeal in 2003 that validated the Quebec regulation which prevents the sale of margarine in the same colour as butter.
The regulation was put in place to help protect Quebec's dairy farmers:

According to dairy producers, 600 farms and 3,000 jobs would be
threatened if margarine took butter's yellow glow.
But the stated purpose was nonsensical: consumer protection:

Quebec said it was designed to ensure consumers
weren't confused about the products...

The controversy over butter and margarine is an old battle between consumers and dairy farmers. Back in the early 1940s, noted agricultural economist, Ted Schultz, led a battle for academic freedom at Iowa State University based on a study recommending the use of margarine:

A scientific study by a fellow professor had concluded that the nutritional properties of oleomargarine were no different from, and might be better than, traditional dairy-based butter. Although the study recommended oleomargarine as a way of conserving wartime resources, it provoked a firestorm of controversy within the state’s dairy community. Major efforts were made to squelch the report, but Ted Schultz, citing academic freedom and the dangers of censoring research, held firm and refused. He made it very clear that the goal of research was the discovery of truth and that there was no major scientific basis for criticizing the report. Therefore, he had the report published and the dispute escalated. When the college administration proposed withdrawing the article, Schultz spoke out unsuccessfully against the action and resigned in protest. The net outcome was that in 1943 he joined the Department of Economics at the University of Chicago, becoming chairman in 1946, to serve for fifteen years.
I did my graduate work in economics at Iowa State and had relatives who had been embroiled in the controversy. The above summary is a good one.

In the late 1940s I lived in Michigan; we bought oleo in clear plastic bags, not sticks or blocks. Each bag had a small food-colouring capsule in it that we had to break and mix in with the oleo to make it look yellow. We would get the desired colour, but the bags were a serious mess. We all cheered when the state legislature removed the ban on coloured margarine.

Oddly enough, by the time I got to Iowa in the mid-1960s to attend graduate school, the oleo/butter controversy was a faint memory in the minds of all but a few more senior faculty members. The stores carried coloured margarine, and it seemed I would never face such regulations and controversies again.

When I moved to London, Ontario, Canada in 1971, there were two margarine shocks. The first was that our old "butter" dishes were useless because neither butter nor oleo was sold in sticks but was sold in blocks instead [only recently have the products become available in sticks]. The second was that we could not buy oleo that had the same colour as butter. It either had be very pale, close to white, or very orange. When it is very pale, oleo is little more than salted vegetable shortening; when it is very orange, it looks a bit like cheesey butter or something.

In my naivete, I had assumed I had seen the last of the oleo/butter controversies when Ontario finally permitted the sale of oleo that is coloured to be the same colour as butter. And it is no surprise that I have never, in any of the jurisdictions in which I have lived, known of any consumer who was misled by the colour. One reason, surely, is that oleo and butter are both packaged, so we have to read what they are; we do not see their colour until we get them home and remove them from their packages (or open the tubs). It would be difficult for us to be misled by the colour.
[Update: Lisa, at London Fog, wonders if "Citizens in Quebec are apparently too stupid to read labels".]

It turns out that the Quebec gubmnt of Bourassa was more beholden to the dairy farmers; hence its ban on the sale of coloured margarine.

I applaud the decision by the Supreme Court of Canada. This is a matter that should be left to the provinces, even if I disagree with the policy. However, the matter is not finished. The federal gubmnt will likely take on the province because its ban conflicts with some of the portions of Canada's trade treaties with the U.S. and other countries.
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