Coin Machine Review (& Pacific ...)

Issue: 1949 March

FTC On Quantity Discounts
WASHINGTON - The Federal Trade
Commission is making increasing provisions
for preventing quantity discounts to large
buyers in all kinds of business. The candy
trade will be especially interested in this
step, since charges have been made by
candy wholesalers for a year or more that
special discounts were given to large buy·
ers of candy bars.
Official reports say that the new plan
announced by FTC is the first time the
commission has attempted to use its power
to tell sellers that there is a point beyond
which they cannot increase their discounts
merely because of an increase in the quan·
tity ordered.
It seems the FTC is now taking steps
to notify all sellers of goods that there
are specific rules which they must follow
in selling to large buyers.
Army Asks Bids On Candy
CHICAGO - The Army recently asked
for bids on certain kinds of candy bars by
manufacturers· here, to be supplied for the
Army's individual assault ration. Bids
were asked on one·ounce sweet chocolate
bars, starch jelly candy bars, tablet chew-
ing gum, etc.
Production capacity of the candy trade
is so high at the present time that needs
for the entire military forces are not ex-
pected to cause any shortages of the par-
ticular bars needed by the government.
Bigger Bllr~ Lower Price~
New. Trend In ClIlIdy Mllrkel
CHICAGO-In one of its own special
surveys, the Wall Street J oumal recently
summarized the resuts of its investigations
in a front page story that said: More for
a Nickel. Two trends are at work in the
candy bar trade and both of them form a
pleasing story to operators of vending ma-
chines.
1. Candy bar manufacturers are already
cutting prices, and will probably reduce
them still more during the year.
2. Candy bars are beginning to show an
increased size.
Three reasons are given for the present
candy bar situation: consumer resistance
to higher prices, increased competition and
a 50 per cent drop in cocoa bean prices.
Operators have heard about consumer
resistance to higher prices in the discus-
sions during the last two years about dillle
bars. Even a year ago operators were be-
ginning to observe the increased competi.
tion among manufacturers. It was more
than brand competition, and extended to
the point of salesmen becoming more cour-
teous, as many operators phrased it.
Western Candy Meet Date Set
The decline in cocoa bean prices is said
to have been a surprise to the trade. It
SAN FRANCISCO - The third annual
happened mostly during December and
convention of Western Confectionery In-
dustries will again be held here, the tenta- - January and was especially noticeable in
the market reports during the first month
tive date having been set for March 24
and 25. A. C. Carrington, Alameda, has
of the year. However, authorities predicted
fluctuations in price and by Feb. 1 th e
been named as chairman of the convention.
. ea ,
markets started doing just that. It was also
reported there are no signs that controls
over African and Brazilian supplies have
been relinquished.
But a decided price drop had already
taken place, seemingly more than enough
to offset scares about sugar prices. Furthe·r-
more, many other ingredients used in candy
had been a part of the · general price de-
clines of recent months.
To help along, copra took a price dive
of about 25 per ceUt and cocoanut bars will
in time feel the aid of such a price. ad-
vantage.
Although operators said they had not
been confronted with much criticism about
the small bars, according to THE REVIEW
survey publish ed in our February issue,
page 42, yet it is known that consumers
did not like the small .bars. The WSJ says,
however, that consumers took the reduced
bars in preference to a price increase.
Thus, consumers will welcome th e news
that manufacturers are already beginning
to in crease the size of bars. Mars, Inc., is
reported to have started increasing size of
its bars late in December, with about 13
per cent covering the average increase;
one of its bars has about 20 per cent more
chocolate, and another has 22 per cent
more almonds and chocohite; another bar
has had its cocoanut make up the increase.
Saying that peanuts have not yet come
down in price, Williamson Candy Co. add·
of A meff s
~ t powerfully
mosdvertised bars
4')
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' 44
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Mill ions of
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COIN MACHINE REVIEW
1
I
ed some to the ~eight of Oh Henry bars
beginning 1 an. 1, also another small in·
crease as of Feb. 1. Peter Paul, Inc., began
more than two months ago to increase th e
weight of three of its bars- although old
labels are still being used. This firm made
the chocolate thicker.
Other bar manufacturers were reported
to be increasing bar sizes, ~s of Feb. 1,
but would require three to four weeks to
get new bars out on the market.
The price angle will be of most direct
interest to operators. Many of them have
already profited by the price reductions on
certain bars, and notices of price reduc·
tions on candy bars are now a welcom e
routine. ,The WSl lists the following price
reductions to illustrate the trend:
_E. 1. Brach & Sons wired wholesalers,
1 an. 31, that prices on three of its bars had
been cut from 80 to 72 cents on 24-count
boxes; Walter H. 10hnson reduced Power-
house bars from 80 to 72 cents; Wilbur-
Suchard offered a 1 anuary special, at 72
cents instead of 80; Euclid Candy Co. has
cut from 80 to 75 cents; and so on. Some
of the firms have been offering similar price
cuts on the larger packs most often pur-
chased by operators.
Hershey is said to be sticking to its price
list, but admits considering a bigger bar.
Hershey has helped other manufacturers
reduce ,prices, however, by cutting cost on
coatings by as much as half on some types.
Operators will be interested in the re-
port th been running about 20 per cent below the
same period a year ago. It seems that 1949
is starting off similar to the previous year,
for the first two months of 1948 brought a
definite drop in sales of all kinds of candy,
including candy bars through vendors.
Manufacturers say that, by giving op-
erators and retailers a better break and
also by giving the .consumer a bigger bar,
they hope to sell more candy bars this year.
In an official report, the National Candy
Wholesalers Assn. said manufacturers had
started reducing prices last year, but that
some makers were offering premiums and
deals in an effort to maintain present prices.
Wholesalers much prefer price redur-tions,
the report said.
The cocoa bean subject probably will be
much discussed for months. The spot mar-
ket price dropped from 53 cents a pound
last November to 23 cents on lan. 31. Th e
African crop began moving in November
and showed up to be bigger than expected.
About half of the Brazilian crop has been
held off the market, but will be available
eventually. Processors like Hershey carry
supply to cover three to five months. Gen-
eral stocks in the country are low; most
buyers bought lightly for months to force
prices down .
Cocoa bean and chocolate market circles
have buzzed for weeks with reports that
candy bar sizes will be increase d and will
use 'more 'chocolate. One candy trade pa-
per recently said market authorities have
advised that the recent drop in cocoa bean
prices was "quite abnormal," and that sell-
ers of chocolate should be prepared for
other changes.
Peanut prices come in for much criticism
by candy manufacturers. Market prices for
processed peanuts seem to be still holding
at a high level, said to be bolstered by th e
large exports of pea nuts. Growers have
heen getting about one cent lower per
pound than parity support price for their
1948 crop. Except for the present high
export rate, peanut prices should show
some declines in price.
MARCH, 1949
REGIONAL REPORTS
(Continued from page 42 )
of new locations such as airports and filling
stations here.
All in all, the Industry is crying for a
more eff~.cti"e public relations program at
the conimunity level and a number of
prominent coinmen and association officials
are aiming at getting membership inter-
ested in. becoming more active in their
community affairs to gain friendship
towards the long-suffering Coin Machine
Industry in this state. Coinmen hope to
build reputations to prevent future attacks.
DO YOU WANT TO SA VI
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MONEY·MAKERS
N . F. Wood
Washinglon, D. C.
Operator business has not been good re-
cently, but thousands of D. C. government
workers are about to get a $330 raise, and
that should mean a lot more loose money
floating around. ,Federal workers received
a similar raise last year.
General business during 1 anuary and
early February was al~o poor except for a
brief spurt during Inauguration Week, and
even that spurt was' less ' than expected.
Operators are not discouraged, however,
and hope for better things when the winter
doldrums ar" over. Commerce Dept. has
rome out with some intprestin lY figures for
Wa~hington business. ' All retail busines~es
in 1948 averaged a 5 per cent gain over the
previous year. For filling stations and drug
stores in the nation's capital, the gain was
about 14 per cent. D. C. restaurants and
taverns, however, reported declines of 3
per cent from 1947.
,
Arcades are doing fairly well, with two
new ones having opened in recent weeks
to bring the downtown total to seven. In
mid-town, two Negro establishments are
operating. The opening of a fourth D. C.
television station, WOIC, hypoed TV in-
terest to the detriment of phono operators.
The sensational success of the local basket-
ball pros has spurred interest in telecasts
of 'the games. The flow of coins into pin
balls has been satisfactory, but the terrific
cost of maintenance imd new equipment is
playing hob with the net.
Soft drink vendors ' are doing fair fo}
winter months, while the pick-uD in candy
sales hasn't been all that could be hoped
for. Ciggie machines are doing okeh, but
operators have their eye peeled on the
prospective salps tax which will force a
orice rise. Luckies are well out in front,
but Philip ' Morris is moving up like a
house' afire. Coin laundries, located in most
of the newer apartment houses, are earning
their keep, and a couDle of laundries have
oDened UD in the northwest section of town.
Shoe shiners are sDotted only in arcades
and are attracting little trade. Scales con-
tinue to show a small but steady profit.
R oy S. R amsey
Push Qtrorterly Tax Payment
MIAMI BEACH, Fla.-A special meet-
ing of the tax committee of the National
Assn. of Automatic Machine Owners was
held here recently to outline plans for ob-
taining payment of federal taxes on coin
machines quarterly instead of on an an-
nual basis.
The committee discussed ways of pre-
senting a petition to proper officials, pos-
sibly to the House Ways and Means Com-
mittee eventually. Arguments to be used
were also discussed fully. One suggestion
considered is that federal tax stamps be
issued, to be affixed to each machine on
which fee has been paid. Before further
steps are taken, NAAMO requests that op-
erators write their views to its headquarters
at 1325 Boardwalk, Atlantic City, N. 1.
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45

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