The Washington times., 1922-06-25
OLD line DRUG
FIRMS HARD HIT
BY BO0TLEGCER
UndersoId by Houses Which
- Are Medium for With
drawal Of Alcohol. ~

draWal OF Alcohol. .-
NEW YORK, June 24.-When
national prohibition first became
q definite probability an inspired
rhymster produced the lullaby:
Hush. little barroom. don't you
You'll be q drug store by and by"
Things which have recently
happened to the drug business,
wholesale and retail, indicate that
the quoted versifier possessed
prophetic vision. Prohibition reg
ulations and the successful efforts
Of numerous bootleggers to crawl
around them are playing hob with
the legitimate drug business.
Wholesale houses which have
been leaders in their field for
years are seriously threatened by
the ruthless competition of mush-
room enterprises whose interest
in booze Is primary and in drugs
merely secondary.
New Stores Spring Up.
number Of drug stores in New York
city and surrounding territory. In
1915 there were about $50 drug stores
in Newark; now there are nearly
800, and the increase In New York
city and adjacent centers is in al.
most as great q ratio.
Real estate values are affected. Ths
demand for corner stores suitable for
retail drug business IL so great that
chain cigar stores and other indus
tries which prefer corner locations
are finding II almost impossible to
obtain suitable premises at reason.
able rents. A corner store in the
F2atbush section of Brooklyn which
formerly let for SIS q month now
brings in SITS.
The situation appears to be within
the provisions Of Congressman Vol
stead's law, which provides that bus
mess houses which are engaged In
the wholesale distribution Of drugs
and drug sundries may withdraw for
sale to retail druggists an amount OF
alcohol equal to 10 per cent OF the
amount Of their total sales In other
lines. It IL the circumvention by
the bootleg wholesalers OF this pro
vision that has made so much trou-
bile for the old established firms.
New Firms Fake Sales.
Wholesale drug firms which have
sprung up In a night have shipped
large consignments to planted Gus.
toners in outside towns and have
then shipped them back again. In
some cases sales have appeared on
the books Of such firms which have
been completely faxed from begin.
ming to end. The dry agents began
to learn the tricks. and fake sales
and fake officers of fake corpora.
tions were spotted before they could
fairly get started. Now the whole
sale bootleggers have figured out
a new one. They sell drugs at cost
or. less, by mail, and obtain a huge
volume of business which they
could never gain by ordinary
methods. On this volume Of bust
ness they are permitted to with.
draw from bond huge quantities Of
alcohol.
Accepted custom in the drug
business permits the manufacturer
to sell to the wholesale house at
a price OF 50 per cent below the
accepted retail figure. The whole
saler takes Is per cent as his share
of the profit and passes the goods
on to the retailer with a margin
left for retail profit Of about IS
per cent. Most drug retail prices
are standardized and the wholesale
prices are published from time to
time in a record which is known as
"'The Druggists Circular Red
Book"
Offer Big Discounts.
Many firms are now offering
lines to stock completely an aver
age drug store at Is per cent dis
count off Druggists Red Book"
prices, which is cost. They offer
also to pay freight charges and
make delivery, which brings the
actual price to below cost from the
wholesale point Of view. Few drug
gists can afford to resist such an
opportunity.
One such advertisement in a re-
cent issue of a trade journal lists
more than 200 drugs and drug sun
dries of national fame which are
offered at a Is per cent discount.
delivery c. o. D., charges prepaid.
On the list are nationally known
toilet preparations. safety razors.
playing cards, soaps and sundries.
A discount of 25 per cent is offered
on kodaks.
Against this sort Of competition
the reputable firms are helpless.
"Our statesmen are in here every
day complaining that they cannot
sell goods against this sort Of COM
petition" an official of one of the
oldest firms said recently. There
can be no object in offering goods
A.
Of sales rapidly.
1T hits us particularly in our
patent medicine sales" this official
THE profit on patent
Is so small that we must
do a big volume Of business in order
to make any money. Any such price
war as this is disastrous to our