the retail price above 25 cents. if a
profit is to be made.
Selling cigarettes at a price above 25
cents per pack poses a mechanical prob-
lem more serious than tax and price
changes have compelled in the past. Due
to the fact that state and city taxes on
cigarettes are in creasing in number and
amount, a price increase by manufacturers
would bring a problem for operators in
states other than Louisiana.
The general view is that the public
would pay higher prices for cigarettes, if
necessary, although the U. S. Dept. of
Commerce is on record with a warning
that the peak of cigarette sales may come
at any time now, if the cost of living begins
to pinch smokers too much. The Dept. says
smokers will save on clothing and even
car expenses before cutting down on
smokes.
In the background, there are a lot of
pros and cons on the question of tobacco
costs in making cigarettes. Some spokes-
men for manufacturers have said , tobacco
costs account for as much as 70 per cent
of the production cost of cigarettes. The
U. S. Dept. of Agriculture issued a bulletin
in 1945, giving a breakdown on cigarettes,
and tobacco cost is put as a minor part
of the total.
Tobacco leaf prices were cut sharply by
buyers in the midst of the market season
in 1946. Rumors suggested a similar move
by buyers at the height of the buying sea-
son of 1947 but the newspapers in tobacco
states and Tobacco Weekly, a trade paper,
flatly warned manufacturers that such a step
might prove " disastrous." So tobacco leaf
prices in 1947 set a record, much above
parity prices on good grades.
It now appears cigarette makers may be
considering a price increase as the best
way out in an era of generally high costs.
Earnings of the companies in the first half
of 1948 may be the deciding point.
MERCHANDISE
(Continued from Page 37)
ette output in April put the total at 16.5
per cent above a year ago. For the ten
months of the fiscal tax year, total cigarette
output was 4.3 per cent above the same
period a year ago. Output also climbed
about 10 per cent in April over the month
of March. Dept. of Agriculture estimates
that cigarette consumption for current fiscal
year mB,y run as high as 375 billion, saying
that high personal income level keeps the
consumption up.
Annual report of Philip Morris, released
in June, showed sales in U. S. as making
good gains but foreign sales of the brand
were off. FTC hearings on the long standing
case against Luckies for its advertising,
condemning use of "toasted" and the "two
to one" choice of tobacco experts, were re-
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Cookies- National Biscuit took the re-
cent news spotlight, with its expansion
plans, etc. Eight new'Jllants are planned and
two should be finished in 1948; new plants
will be used chiefly to increase output of
soda and butter crackers. Firm reported
prices are now about 5 per cent above last
year but no further increases are expected
- unless materials also advance. Cost of
raw materials is now about 30 per cent of
total expense.
Coffee - Spot market began showing
some declines in June and futures trading
for July held steady for a period of at least
two weeks; Brazil was supporting its prices
to prevent further declines.
Frozen Foods-Recent reports empha-
size fact that the trade has improved its
distribution and can now begin to build
up sales again. The weeding out process is
finished, trade leaders say. Prices on equip-
ment still remain high.
Ice Cream- Government reports show
April output of ice cream made good season-
al gains over March, but that total was
5 per cent under year ago. Output for first
four months of the year is 9 per cent under
the same period a year ago, but is 31 per
cent above the 5-year average for the period.
Ice cream trade reports that temperatures
in April were seasonally normal for most
parts of the country, that butterfat content
of ice cream was slightly below the first
three montbs of the year. States showing
gains in ice cream output were Ind., Ill.,
Wis., and Okla. Pacific Coast states had
biggest drop in output compared with
April last year. June was dairy month for
the nation and big booster campaign for
ice cream was heralded in Saturday Evening
Post (June 26) with a full pa'ge ad in color.
Juices-Chicago market on citrus juices
still described as U1isettled, with wide varia-
tions between unknown brands and the best
advertised brands. Retail stores still offer
46-oz. orange juice at bargain prices, al-
though wholesale trade does not warrant
reduced prices. One chain has recently
offered two 16-oz. cans of grapefruit juice
at 25 cents. Dept. of Agriculture estimates
that consumption of juices has been gain-
ing steadily since 1943 and that 1948 use
will show good gains, per capita use quad-
rupling that of the prewar period. Florida
trade reports that 1948-1949 season produc-
tion will be somewhat smaller than that of
the season just ending; orange outlook is
for 72 per cent of a full crop, and grape-
fruit at 69 per cent of a full crop.
P eanuts-Crop report for June 1 gave
Virginia-Carolina region as generally good,
but stands in some areas about 75 per cent;
the market for shelled peanuts is improv-
ing.
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*
52
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COIN MACHINE REVIEW