Dr.Engelbert Mülhaupt, The Milk Cartel. A Study of Cartels and Milk Prices, Karlsruhe, 1912.
Baden Higher School Economic Studies, New Series, No. 9.
A very interesting and business-like little book, describing extremely interesting phenomena.
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Literature sources N.B.: Ph. Arnold in Conrad’s Jahrbücher, Vol. 41, 1911, and in the article “Statistics of the Kingdom of Bavaria”, Vol. 41 (1910). Dictionary of Political Science, Vol. 6 (3rd edition) (“The Milk Industry”). Nachimson, “The Milk War”, Die Neue Zeit, 1911 (29 th year), Vol. 2 (p. 668 et seq.). |
The monopoly position of the farms (a region 50-100 km. around the big towns) and the growth of co-operatives are factors in favour of cartels in this field.
Following the invention of the centrifuge, co-operative dairy associations sprang up like mushrooms after a warm spring rain:
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Number of agricultural co-operatives (p. 24): |
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| 1870— | 1 | 1890— | 3,000 | ||||||
| 1903— | 2,245 | with | 181,325 | members | 1900— | 13,600 | |||
| 1909— | 3,039 | ” | 270,692 | ” | (p. 5) | 1910— | 24,900 | ||
| { | according to Petersilie, German Co-operative Statistics, Berlin,1911. |
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The growth of prices for concentrated fodder, etc. (++ 13-50 per cent, 1896-1906, p. 7) etc., did not result in a growth of prices, until the strong cartel movement about 1900 (p. 7).
The enormous importance of large-scale production (storage, etc.) of milk (in relation to cheapness, hygiene, etc., etc.) favours cartels.
| Berlin requires daily | 1 | million | litres | of | milk |
| Hamburg with environs | 0.5 | ” | ” | ” | ” |
| Vienna | 0.9 | ” | ” | ” | ” |
| Munich | 0.25 | (p. 16) | ” | ” | ” |
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Milk contains 9,000 bacteria per cubic centi- metre (centimetres?? or millimetres?) immediately after milking; 12,000 after 2-3 hours; 120,000 after 9 hours; millions after 24 hours (page?). |
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Delivery is mostly by railway (50-100 km. from the town). Virtual monopoly position of peasants in nearby areas engaged in milk production.
“The co-operative movement has trained the farmer for the cartel” (25).
The history of some milk cartels.
The Berlin Milk Cartel. Founded June 1900. A fierce struggle against wholesale traders (the public supported the traders).
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Bolle (the biggest Berlin milk firm—sells 45 million litres per annum; capital 10,000,000 marks; dividend 8 per cent, p. 91) in 1903 made peace with the milk cartel. (In a short time, Bolle became a millionaire; as also Pfund in Dresden, who sells 21 million litres). |
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Milk syndicates always improve hygienic conditions.
But the present one was badly off financially and went bankrupt on February 27, 1907.
Hamburg. Founded in June 1900. During ten years it gave its members 10.3 million marks (p. 53), raised their price (from 11.2 to 14.1 pfennigs), and concluded an agreement with the big traders.
Frankfurt-am-Main. When was it founded?? In 1911 it was very powerful.
It concluded an agreement with the traders. Afterwards it demanded that they raise the price from 16 pfennigs to 17.
“Over this pfennig a three months’ bitter war broke out between the farmers and the traders, who were supported both by the Social-Democratic and liberal workers’ unions, and by the trade union association” (p. 54). The traders gave way.
“The struggle ended with traders, to the great astonishment of the consumers, forming an alliance with Vereinigte Landwirte [the United Farmers, a cartel], by which the latter were pledged not to deliver milk to traders who did not join in the price increase” (p. 55).
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In Vienna there is a huge syndicate. It lowered sales costs from 7.67 hellers per litre in 1900 (turnover 0.56 million kronen) to 3.775 hollers in 1910 (turnover 6.74 million kronen) (p. 57). |
large- scale produc- tion!! |
Influence of cartels on the producers?
Prices rose by an average of 2 pfennigs in 1900-10 (compared with 1890-1900) (p. 61).
The price rise was caused by the cartel (otherwise higher production costs would not have increased the price).
“What other explanation is there for the striking fact that prices began to rise precisely in the years when the milk cartel appeared on the scene?” (63).
“Lastly, what other explanation, save the existence of cartels, is there for the fact that the highest price increases were in the richest milk areas: Switzerland and Württemberg?” (64).
Bigger sales of milk worsen both food for cattle (p. 66) and food for the population (67).
Consumption of milk in Switzerland
| Litres per capita per day | |
| 1903-05 | —1.01 |
| 1906-09 | —0.98 (p. 68) |
Samein Germany.
Effecton trade? Profits declined from 7-8 pfennigs per litre to 6-7 pfg. (72),—gradual squeezing out of trade.
On consumers? Better quality, hygiene, etc.
Best of all in Basle, where the consumers’ association and peasants’ milk association directly confront each other. The milk trade is run by the city in an exemplary way, but as regards prices the consumer is dependent on the peasants!!
“According to Professor Kasdorf, the average daily milk yield of a cow is 5 litres in Austria, 8-10 litres in Germany, and 12 litres in Denmark” (p. 83).
Milk production on Archduke Friedrich’s big farm near Vienna:
| 1853— | 3.00 litres per cow |
| 1850— | 4.67 |
| 1890— | 6.27 |
| 1900— | 6.86 (p. 84) |
| 1910— | 8.00 |
Small-scale trade in milk still prevails (in Munich in 1910 there were 1,609 dairy shops, including
| 250 | selling up to | 50 litres |
| 1,310 | (81.4%) up to | 150 litres) |
conditions generally unhygienic; no safeguards against contamination when the milk is poured, etc.
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and “an incredible waste of time, labour and capital” (87), delivery, unsold milk, 2-3 suppliers to a single house, etc., etc. |
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“The social effects of the milk cartel” (Chapter V)— the prospect is for an “armed peace” (95) between the town and countryside, an outright war between consumers and sellers, as in Basle. |
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In Basle, the consumer depends a wholly (as regards price) on the cartel of peasant milk producers.
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Peasant dairy cartels are best of all organised in Switzerland—and the price of milk is the highest of all!! the power of these cartels being greatest of all!! |
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“The general consumers’ association (in Basle) finds its hands completely bound in face of the price policy of the producers’ cartel” (p. 77). |
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“Even in Switzerland, where direct relations between peasants and workers are closer than in other countries, there have been hard-fought battles and bitter price struggles between them” (p. 95).
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