Coin Machine Review (& Pacific ...)

Planned Merchandising Is
Answer to Today's Solt Market
NEW YORK-"Today, the problems fac-
ing the vending machine industry are those
facing every consumer industry in a soft-
ening market," said J ohn S_ Mill, vice-
presiden t and sales manager of the Rowe
Manufacturing Co., in an in terview at the
Rowe New York office. "In all cases, the
only answer can be more concentrated
merchandising than ever before. Our in-
dustry must clean house-and plan its
selli ng stra tegy as carefully as other giant
industries, where merchandising is accepted
as an important part of any selling pro-
gram. It is our job, as manufacturers to
lead the way- and our company, for one,
is pioneering in ways to help operators
maintain volume and profits.
"For example, the figures show that there
are just as many cigarettes being smoked
today as ever before-in fact, considerably
more. Yet many operators report diminish-
ing cigarette sales. Why? In surveyin~
those markets, we have discovered thal
the greatest drop occurs when there is a
price differential between vendor sa les and
store sales. People are co untin~ th eir pen-
nies today, and every penny co unts. Again,
there have been serious d rop-offs in traffi c
in many vendor locations. P eople ca nnot
afford to go out as often. Th e result, less
spending in taverns, restaurants and other
cigarette machine locations. Vending ma-
chine sales, of co urse, follow this downward
trend.
"Here is a situation that must be fa ced
sq uarely. What do we have to offset it-
and how can we best go about doing it?
"In the first place, vending machines
have one overwhelming advantage over
any other form of retail selling-conveni-
ence. It is up to us to make the most of
it by seeing that machines are kept clean,
appealing and attractive. They should de-
( See PLANNED, Page 38)
Officilll Beport Pllts Finger
011 High Cigllrette Bevenlles
WASHINGTON-One of the most wide-
ly quoted reports on cigarettes and other
tobacco products issued in recent years
was the May 1949 bulletin on the tobacco
situation, i sued by the Bureau of Agri-
cultural Economics. The recent report em-
phasizes how much greater is the total
tax revenue on tobacco products than is
the total paid to growers for the raw to-
bacco.
Th e recent report rivals in interest a
bulletin issued by the BAE in 1945 which
contained a breakdown on who gets what,
and how much , of the cigarette dollar.
The 1945 report emphasized the growing
tax load a nd also revealed that tobacco
growers get the smallest part of the dollar
paid for cigarettes.
Th e BAE report appeared about the tim e
an official revenue report for April had ap-
peared to show that sale of federal tax
stamps for cigarette had taken a drop of
about 14 per cent below the mark of April
a year ago. The federal revenue report is
usually followed as a guide to the trend
in cigarette sales, and such a decided drop
in April puzzled lea ders in the cigarette
industry-as one tobacco trade paper put it.
Reports during the months that have
passed since January had not indicated
that a real drop in cigarette consumption
might be starting, although there had been
some speculation as to how soon the grow-
ing unemployment and smaller payrolls
might begin to show in cigarette sales. But,
actually, month to month reports had
shown a steady rise in cigarette consump-
tion for the year, equal to last year's steady
REBUILT CICARETTE MACHINES
SOME HAVE NEW PAINT JOBS
All machines have been t horoughly overhauled by tra ined Rowe ser vicemen,
are in top mechanical condition and excellent appearance.
Set for 20c Operation
8
8
10
10
Col.
Col.
Col.
Col.
Rowe
Rowe
Rowe
Rowe
Imperials
Royals
Royals
Pres idents with Crusader-type operating bar
$50.00
70.00
70.00
95.00
F.O.B. Shipping Point
ROWE SERVICE CO.
LOS ANGELES OFFICE : 2620 So. Hill St., Phone PRospect 3228
SAN DIEGO OFFICE: 727 Third Ave., Phone FRanklin 4246
36
gains, and then the April report appeared
to cause the industry to stop and think.
Many have raised the question as to
when high taxes on cigarettes might hegin
to discourage a growing use of the product.
Cigarette sales in the states that have also
passed high taxes on smokes have been
watched to see if such a trend might show
up. Louisiana, with its state fee of eight
cents per pack in addition to the federal
tax of seven cents, might be regarded as
a real testing ground. The evidence thus
far , however, has not heen conclusive when
all the states that have high taxes are
taken into consideration.
Some leaders in the cigarette trade are
active in working to arouse the public to
fight for a reduction in taxes on the item,
but the cigar industry has been much more
aggressive in fighting for tax reductions
than leaders in the cigarette field.
The agricultural report, due to being so
widely quoted, may actually start a real
figh t on cigarette taxes. Petitions have
heen made to Congress to lower tobacco
taxes to the prewar level but this plea has
been regarded as lost this year because of
the inaction on excise taxes in general.
T h e cigar e tte ve nd i n g t rad e ha s
never b een regarded as cOlIUllitte d to
a policy of fighting taxes on cigar e ttes.
T h e official view, as exp ressed for a
number o f year s by t h e National Auto-
m atic Mer chandisin g Assn., is that
cigarette o per ato rs are not strong
e nough in their own organized capac-
i ty to for m a real opposition to tax p r o -
posals in states and cities, n o m a tter
how m u ch o p erators may be in sym -
p athy with the cigarette industry it-
self in fighting taxes.
The trend in recent legislation, however,
has been to include cigarette vending ma-
chines in bills that propose a state tax on
the product, and hence operators are com-
pelled in such states to take vital interest
in the proposed law.
Total tobacco taxes collected by Uncle
Sam, and taxing states and cities, is ex-
pected to hit the $1,720,000,000 mark for
the fiscal year ending June 30. This is a
new record over the previous high of the
last fiscal year of $1,600,000,000. Cigarettes
are estimated to pay about 80 per cent of
the total load on tobacco products.
Some states have derived so much rev-
enue from a cigarette tax that the totals
have become a big item in financing gov-
ernmental activities. Some of the states
showing especially high yields in 1948 are
the following:
New York ________ 3 c ___ ___ S50,900,OOO
COIN MACHINE REVIEW