Greasing the Wheels of Rural Transformation? Margarine and the Competition for the British Butter Market

Paul Sharp
Authors registered in the RePEc Author Service: Markus Lampe

IFCS - Working Papers in Economic History.WH from Universidad Carlos III de Madrid. Instituto Figuerola

Abstract: This article considers an example of the impact of a new good on producers of close substitutes: the invention of margarine and its rapid introduction into the British market from the mid-1870s. This presented a challenge to the traditional suppliers of that market, butter producers from different European countries. We argue that the capacity to react quickly to the appearance of this cheap substitute by improving quality and establishing product differentiation was critical for the fortunes of butter producers. This is illustrated by a discussion of the different reactions to margarine and quality upgrading in Ireland, Denmark, and the Netherlands. A statistical analysis using monthly data for Britain from 1881&-7 confirms that margarine had a greater impact on the price of poor quality butter than that of high quality butter, presumably because it was a stronger substitute.

Date: 2014-03-01
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Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Greasing the wheels of rural transformation? Margarine and the competition for the British butter market (2014)
Working Paper: Greasing the Wheels of Rural Transformation? Margarine and the Competition for the British Butter Market (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cte:whrepe:35281

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