Evening star. [volume] (Washington, D.C.) 1854-1972, 1943-04-27
Whisky
Continued From First Page

and fictitious prices for the pur-
chase of small distillery properties
Abnormal Demands.
In his letter to Mr.. May, Mr.. Gal
braith said:
There is in the liquor industry
today a set of unusual conditions
brought about by the stoppage OF
production of beverage spirits in
October, 1912; by an abnormal in
crease in consumer demand result
ing from increased purchasing power
and by system of voluntary ra-
tioning by the holders of the ma
-jority of whisky stocks for purposes
of retaining aged whiskies for future
use
Reliable estimates. based on tax
records, indicate that the present
inventories can supply a normal
consumption of only 212 years. even
though present demand is far above
normal"
I Mr.. Galbraith estimated that 80
per cent of all available whisky is
controlled by the major companies.
and "the remaining 20 per cent of
stocks is therefore desired by many
to continue brands and to help
them under shortage conditions es-
tablish themselves in the whisky
business"
This scramble for free whisky"
Mr.. Galbraith commented. has
brought about the conditions COM
planned of by Mr.. May and because
of the shortage there has devel-
oped "a black market situation
where exorbitant prices were paid
for any offerings"
Because purchases OF bulk whisky
are easily detachable" under exist
ing OPA regulations, Mr.. Gal
'braith said. financially able ele-
ments of the whisky business
have apparently begun to employ
the purchase of distillery properties
sat eXorbitant prices in order to gar
ner whisky stocks"
Prevailing conditions, Mr.. Gal
braith explained. make it possible
r'for large seller with long line
of established brands to discontinue
THE sale of low-priced brands and
continue offering only the brands
(which produce long margin of
profit" while sellers who GUS
Ttomarily offered only low-priced
goods and depended on open market
epurchases for bulk whisky have
suffered squeeze"
= Having purchased their bulk
whisky at illegal prices he con-
,,tinued. these people are not in
-clined to apply to the Office OF
Price Administration for individual
adjustments or for amendments to
regulations" and take the easy way
.out-namely that of disseminating
established low-priced brands and
substituting new brands which they
then price by borrowing the ceiling
prices of competitors who are more
.favorably situated"
Fixed Margins Sought.
OPA plans to remedy the situa-
ton, Mr.. Galbraith said, call for the
establishment of fixed percentage
margins for wholesalers and re.
tailers ito provide easily enforceable
ceilings at the retail level and te
lSubstitute nat prices by types for all
new brands introduced since March
s31. 1912.
> ''It might also be wise to require
cau sellers to continue Offering low
priced, medium priced and high
!, priced brands in equal proportion
! to their sales of the same categories
{before price control" he added.
Mr.. Galhraith disclosed that one
the companies named by Mr.
{ May is now under investigation fol
Its sales of cut whistles at high
prices to various monopoly States.
generally" he concluded. III
can be said that this ONCE will CO.
operate with antitrust authorities
:. to prevent any group from employ.
ing conditions arising out OF war
time shortages and price restrictions
TO foster monopoly"