OPA REPORTS ON CIGARETTE PROFIT STUDY Vending Machine
WHICH LED TO CONTINUANCE OF CEILING GANDIES
Results of an investigation of
the cigarette industry which led
the Office of Price Administra
tion to continue its “ceiling”
over manufacturers’ prices at
the levels of last December 26,
1941, were made public March
24 by Acting Price Administra
tor Hamm.
At the same time, Mr. Hamm
issued an amendment to the cig
arette schedule (No. 62) allow
ing manufacturers to revise any
temporary sales promotion pro
grams and to adjust prices in
the event that the present Fed
eral Internal Revenue tax on
cigarettes should be raised.
Income Higher In W ar
The OPA report, based on a
cost and profits study which em
braced the accounts of eight
companies producing approxi
mately 95 percent of all ciga
rettes made in the United States
in 1941, reveals among other
things th a t:
1. Average net income (before
income taxes) of five of the lead
ing manufacturers — American
Tobacco Co., including its sub
sidiary American Cigarette &
Cigar Co.; Liggett & Meyers To
bacco Co.. P. Lorillard Co.;
Philip Morris & Co., Ltd., Inc.;
and R. J. Reynolds Tobacco Co.
—rose from 17 percent of the
average book value of their in
vested capital in the pre-war
years 1936-39 to over 21 percent
in 1941.
Sales Are Up
20
Per Cent
2. Current cigarette sales are
running 20 percent above the
corresponding levels of 1941 and
indications are that, because of
the increase in national income
and enlargement of the armed
forces, this rate of increase
likely will continue.
3. Manufacturers’ 1941 profit
margins average 55 to 60 cents
per thousand on standard price
cigarettes.
4. While the current cost of
producing and selling standard
price cigarettes is from 10 to 16
cents per thousand above the
average cost last year, more than
half of these higher costs will be
offset by the considerably greater
volume of sales. In this connec
tion, the report says, “It thus
appears from the figures of
the manufacturers investigated,
which constitute about 95 per
cent of the industry, that, in
spite of the recent cost increases,
the cigarette industry will con
tinue to make very substantial
profits.”
made specially fo r
Vending Machines
W e hav e plenty o f
SALTED PEANUTS
AND MIXED NUTS
Also
American Made
Charms
PAN
C onfections
345 W . E R IE S T R E E T
C H IC A G O , IL L .
Any C ut to G row ers Held
Unnecessary
Major conclusion drawn from
the investigation is that the es
tablished maximum prices are
fair and equitable and (as an
nounced on February 27) will
be continued in effect. In issu
ing the report, the acting price
administrator stated “Mainte
nance of present manufacturers’
prices for cigarettes should not
depress prices paid to tobacco
growers. Even in the depths of
the depression, leading cigarette
manufacturers averaged 9.5 per
cent on their invested capital
before taxes and are now aver
aging over 21 percent. In view
of such profits, a cut in prices
paid to tobacco growers cannot
be justified on grounds of neces
sity.”
Now — As Always
O PERA TO RS’ H EAD Q U ARTERS
IH T H E B U L K V E N D IN G F IE LD
★ A lt h o u g h
bulk venders has greatly given
way to the defense of our coun
try , we a re s till anxious to
extend every possible coopera
tion to o p e ra to rs.
AUTOMATIC
P H O T O G R A P H Y
April, 1942
© International Arcade Museum
AUTOMATIC AGE
W e urge
that you direct your questions
and problems to our attention,
and keep abreast of the field
through
The
rem arkable
eoln-operated
P H O T O M A T IC
m achine, a w orldw ide publie fa v o rite , au to m a ti
c a lly ta k e s, fram es and d e liv e rs a fine personal
p ictu re in only 40 seconds! R e q u ire s no a tte n d a n ts:
v ery lit t le w eekly se rv ic in g .
P R O V E N a steady
m oney-m aker.
in v e stig ate
w ith ou t
o b lig atio n .
In te rn atio n al Mutoscope Reel C o ., In c ., 44-03 l l t h
S t .. Long Islan d C it y , New Y o r k .
p ro d u ctio n of
our
publication, The
Northwesterner.
THE NORTHWESTERN CORPORATION
OEAST ARMSTRONG STREET, MORRIS. ILL
7
http://www.arcade-museum.com/