Greasing the wheels of rural transformation? Margarine and the competition for the British butter market

Markus Lampe, Paul Richard Sharp

Research output: Contribution to journalJournal articleResearchpeer-review

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 IrelDenmark, 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.

Original languageEnglish
JournalEconomic History Review
Volume67
Issue number3
Pages (from-to)769-792
ISSN0013-0117
DOIs
Publication statusPublished - Aug 2014

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