Reputation and export performance: Danish butter exports and the British market, c.1880–c.1914

Abstract

This article extends current scholarship on the role of branding and trade marking in establishing competitive advantage. Using a case study of Danish butter exports to the British market, 1880–1914, we demonstrate that many of the technological and organisational innovations in this industry were not in themselves sufficient to guarantee that Danish butter would command price premiums in the British market. We argue that the introduction of the ‘Lurbrand’, together with the rigorous prosecution of vendors misrepresenting other butters as Danish, were vital to maintaining the reputation of Danish butter at a time when rival countries were producing butter of comparable quality. Of particular importance to current debates on branding and trade marking is our finding that independent butter producers collaborated with the Danish government to use the same trade mark and to ensure that state inspection guaranteed that Danish butter was produced consistently to the highest quality.

Keywords:

• reputation
• branding
• trade marks
• price premiums
• Danish butter exports
• ‘Lurbrand’

Acknowledgements

A version of this article was presented to the Association of European Business Historians Conference at Frankfurt, 2005. Our thanks to Phillip Scranton in his role as discussant and the participants for their useful comments. We are especially grateful for the incisive comments of the referees. The usual disclaimer applies.

Notes

 1. Calculated from Annual Statement of Trade and Navigation of United Kingdom with Foreign Countries and British Possessions, BPP, various issues.

 2. The precise reasons for the success of the Danish butter industry are discussed further in section two.

 3. In the discussion that follows, we focus on the relationship between branding, quality assurance and price premiums. We recognise that the influence of branding on other aspects of business strategy, especially marketing, have also figured prominently in recent debates on business history (see e.g. Church, 2000).

 4. Often termed ‘product-country image’ in the branding literature. For recent analyses see e.g. Olins, 2002; Papadopoulos & Heslop, 2002. The building of German national reputation has been discussed by Head, 2002.

 5. In the economics literature it has long been established that price premiums provide a reward for reputation and an incentive not to cheat on quality (see e.g. Klein & Leffler, 1981; Shapiro, 1983).

 6. For further statements about the high quality of Danish butter, see e.g. An attack on Danish butter. The Grocer, 28 Aug. 1897, p. 486; The Times, 14 March 1888, p. 9; Letters to the Editor, Butter and margarine. The Times, 1 Dec. 1913, p. 72; Report on Food Products Adulteration, British Parliamentary Papers 1895 (363), Vol. X, Q.797 (Hereafter BPP 1895).

 7. This is in contrast to the dominant Danish historical tradition according to which the increase in Danish butter exports are viewed as a consequence of the cooperative movement while technological improvements and state involvement are underplayed (see e.g. Bjørn, 1982; Drejer, 1943; Hertel, 1917).

 8. Calculated from Annual Statement of Trade and Navigation of the United Kingdom with Foreign Countries and British Possessions, BPP, various issues.

 9. Ibid.

10. It should be emphasised that our study differs from that of Henriksen and O'Rourke (2005), who focused on seasonal price premiums. In this article we argue that the premium earned by Danish butter was a function of its high reputation and quality, both of which were protected by the Danish government.

11. From the monthly series a quarterly series was calculated, and this was then used to calculate the average quarterly price premium for the period 1890–1913.

12. See, for example, Tidskrift for landøkonomi, Vol. 1, 1899, p. 208.

13. The Irish butter price refers to the price of Cork butter, which tended to have four quotations according to quality. From January 1909, only one price is listed for Cork butter, which appears to be the price for best quality. To ensure consistency, we use the best Cork price throughout.

14. Prior to 1903 Dutch and Friesland butter prices are listed, but thereafter, only Dutch. Since Friesland butter tended to earn a higher price, this is used in preference to the Dutch quotation prior to 1913.

15. French butter also had different quotations according to quality. Thus, for most of our period, the highest quotation refers to ‘French baskets’. From August 1902, the series distinguishes between French ‘extra mild’ as being the first best quality but French baskets appear in a different butter category. Again, to ensure consistency, the best French butter price is used throughout which tended to be ‘baskets’ up to 1902, and ‘extra mild’ after that date.

16. Prior to 1900, Australasian butter prices are reported infrequently. A continuous series distinguishing Australian and New Zealand butter becomes available only from 1907. Because the latter tended to command a higher price this is the series that is used.

17. This view has been confirmed by later scholars (see e.g. Turner, 2004, p. 142).

18. A substantial literature exists on this transformation (see e.g. Henriksen, 1993). We propose only to focus on those developments which are fundamental to our discussion.

19. During the 1770s and 1780s a process of land reforms took place in Denmark. A central part of the reforms was the enclosure movement that placed the middle range farms as the centre in the Danish society (see e.g. Feldbæk, 1990, pp. 255–275).

20. In 1880 an average farm had five to seven cows (Bjørn, 1982, p. 56).

21. It is estimated that by the end of 1884 there were 1300 milk centrifuges in Denmark (Bjørn, 1982, p. 31).

22. Royal Commission on the Natural Resources, Trade and Legislation of Certain Portions of His Majesty's Dominions (Part II), BPP, 1912–1913, XVI.393, Cd. 6517, QQ. 2004–2011.

23. The absence of uniformity in quality would have undermined later efforts to establish ‘Danish’ butter as the best quality butter.

24. This development contrasted with the development in other countries, for example the Netherlands, which was previously the main butter exporter to Britain.

25. United Kingdom, Merchandise Marks Act (1887), s. 3.

26. United Kingdom, Sale of Food and Drugs Act (1875), clause 6.

27. Report from the Select Committee on Merchandise Marks Act, 1887 (1890), 334 Vol. XV, p.i, and QQ. 37, 118, 334, 338–339, 484. (Hereafter BPP 1890).

28. Ibid., QQ. 2592–2598. Second Report from the Select Committee of the House of Lords on Marking of Foreign and Colonial Produce, BPP 1894 (203), QQ. 1306–1307, 1318–1320.

29. BPP 1895, p. iv and Q. 183.

30. Goods imported from non-English speaking countries, but bearing English descriptions, had also to bear a prominent indication of their country of origin.

31. BPP 1895, QQ. 4316–4328.

32. Ibid., Appendix 4, p. 279.

33. Report on Food Products Adulteration, BPP 1894 (253), Vol. XII (hereafter BPP 1894), Appendix 1, p. 191.

34. BPP 1895, QQ. 51–52, 793–794, 1918–1919, 6745–6746; BPP 1894, QQ. 305–306, 275, 1170; Report on Food Products Adulteration, BPP 1896 (288) (hereafter BPP 1896), QQ. 1251, 1282, 1315, 2151.

35. BPP 1894, QQ. 914, 925, 3790–3792.

36. BPP 1896, p. iv. For similar statements on local vested interests see also BPP 1894, QQ. 1070–1071, 1227–1230; BPP 1895, QQ. 106–107, 2959. Evidence of other problems affecting the efficacy of the Food Adulteration Acts can be found in BPP 1894, QQ. 969, 2001, 2076; BPP 1895, QQ. 796, 1120, 1579–1581, 2609–1612, 6663, 6742–6743; BPP 1896, QQ. 419–420, 445–446, 1222, 1228.

37. Andelsebladet, Vol. 9, 1909, p. 85.

38. Tidsskrift for landøkonomi, Vol. 1, 1899, p. 210.

39. See, for example, The Times, 27 Aug. 1903; 2 Sept. 1903; 3 Sept. 1903. These allegations were strongly denied by Faber.

40. This Act forbade the imposition of a false trade description (including place or country in which the products were made), independently of whether a trade mark had been infringed. United Kingdom, Merchandise Marks Act (1887), s.3.b.

41. Faber held this post until 1932.

42. Danish National Archives (hereafter, DNA), Statskonsulentet i London kopibøger.

43. BPP, 1895, p.363, Q. 1653. See also The Grocer, 26 March 1892, p. 645.

44. The Grocer, 15 Aug. 1891, 303; 21 Nov. 1891, 987; 17 Dec. 1892, 1192; 1 April 1893, 767; BPP 1896, (288), Q. 2189.

45. BPP 1894, Q. 1177; BPP 1895, QQ. 797–798.

46. BPP 1894, QQ. 1147–1156; BPP 1895, Q. 791.

47. Tiddskrift for landokonomi, Vol. 1, 1899, 208.

48. Beskyttelse for danske Produktmærker – udvalgsbetænkning til Det kongelige Landhusselskab, in Tidsskrift for Landøkonomi, Vol. 1, 1899, pp. 196–197.

49. Ibid., pp. 197–199.

50. United Kingdom, An Act to establish a Register of Trade Marks, 1875 (38 & 39 Vict. Ch. 91, s. 3); An Act to amend and consolidate the Law relating to Patents for Inventions, Registration of Designs, and of Trade Marks, 1883 (46 & 47 Vict. Ch. 57, s. 76). If numerous firms were entitled to use the same mark, no single firm would have exclusive rights. Of importance also was the fact that one of the key functions of a trademark – that it distinguishes the output of one manufacturer from that of another – would have been undermined.

51. DNA, Statskonsulenten i London kopibøger. Brev til Anders Nielsen den, 9 May 1899.

52. DNA, Fabers beretning sent Rasmus Rasmussen den, 8 June 1900; DNA, London kopibøger. Brev til Anders Nielsen, Faber to Anders Nielsen, 28 Jan. 1901.

53. On 7 October 1901, the ‘Lurbrand’ was accepted by the Register of Trade Marks in Denmark.

54. The Trade Marks Act (1905), s.62, was the first British Act to make provision for standardisation (subsequently, certification trade marks). This legislation provided that where any association undertook the examination of any goods in respect of origin, quality, or other characteristic, and certified the result of such examination by mark used upon the goods, the Board of Trade, if it deemed it to be to the public advantage, would permit such an association to register the mark as a trade mark, irrespective of whether or not the association was a trading association.

55. DNA, Faber to Anders Nielsen, 20 Jan. 1902.

56. DNA, Faber to Anders Nielsen, 4 Feb. 1903.

57. By the Danish Margarine Act, Danish margarine was coloured white, not yellow (Nielsen, 1906, pp. 66–72).

58. The Select Committee on Merchandise Marks Act (1890) had recommended the appointment of a public prosecutor in cases where the general interests of the country, or a section of the community or of a trade were injured. BPP 1890, p. iv. However, giving evidence to a subsequent enquiry, the Permanent Secretary to the Board of Trade, Sir Courtenay Boyle, revealed that between 1891 and 1896 only 17 prosecutions had been instigated, of which four had been dismissed and six had been withdrawn. Boyle indicated that State Departments were very reluctant to commence action unless there was very strong likelihood they would succeed. Select Committee on Merchandise Marks (1897), QQ. 30–31, 63–65. In the case of falsely marked foreign and colonial produce, a House of Lords Select Committee on the Marking of Foreign and Colonial Produce noted that, ‘it may not be possible for the action of a Government Department in this direction to be sufficiently far-reaching’. British Parliamentary Papers 1894 (203) p. vii.

59. We are grateful to the referees for bringing this point to our attention.

60. Autarky was never a serious option available to Denmark. Between 1870 and 1880, its export/GNP ratio was over 20%, twice the European average (Pollard, 1982, p. 264).

61. Lurpak nu størst i Storbritannien!, www.business.dk, 6 July 2007.

62. Red Associates, Perceptionsanalyse af brandet Danmark, 24.