‘Money talks – give yours an Empire accent’: the economic failure of Britain’s Empire Marketing Board

by David M. Higgins (Newcastle University) and Brian Varian (Swansea University)

This research will be presented during the EHS Annual Conference in Belfast, April 5th – 7th 2019. Conference registration can be found on the EHS website.

 

The formation of the Empire Marketing Board (EMB) in 1926 was a unique experiment in interwar Britain: it was the first, publicly funded marketing board in the UK that sought to encourage domestic consumption of empire foodstuffs and raw materials. Using a diverse range of marketing methods – including films, cinema broadcasts, newspaper advertisements and especially posters – the Board aimed to increase public awareness of the strong economic interdependence between Britain and its Empire.

This relationship was longstanding. Britain was unquestionably the ‘vent for surplus’ for many empire products such as New Zealand butter, cheese and lamb, Indian tea and Australian frozen beef. Yet by the 1920s, the Dominions and other primary-producing countries were increasingly competing in the British market, necessitating a reassessment of Britain’s relationship with the Dominions. Importantly, it was recognised that the purchase of empire produce provided the means for the Dominions to increase their consumption of British manufactures.

Unlike most countries, Britain pursued an essentially free-trade policy in the 1920s. There was simply no scope for Britain to favour empire produce through the extension of preferential tariff rates, a policy known as ‘imperial preference’. Yet the Dominions had applied preferential tariff rates to their imports of manufactures from Britain.

Consequently, Britain attempted to correct this imbalance through the creation of the EMB, which would favour Dominion produce not through tariffs, but rather through publicity. This approach was a stop-gap that was superseded by the Ottawa agreements of 1932, when Britain’s abandonment of free trade finally allowed the country to implement preferential tariff rates.

To date, much of the research on the EMB has claimed that it served an important function by fostering imperial ideology within the empire. But while the cultural impact of the EMB has been studied, its economic impact has not. Our study, to be presented at the Economic History Society’s 2019 annual conference, is the first to evaluate the economic impact of the EMB.

We begin by describing the scale of the problem confronting the Board: by 1924, for example, almost 80% of Britain’s beef imports originated from ‘foreign’ countries, principally Latin America while over 55% of butter imports originated from outside the Empire. In fact, cheese was the only major food product in which the empire dominated Britain’s imports.

In our study, we focus on a sample of the iconic posters that were issued by the EMB and displayed in cities throughout Britain. Using a series of regression analyses, we test whether these posters – the EMB’s most prominent form of advertising – raised the empire’s share of Britain’s imports of key foodstuffs, including butter, cheese, wheat, tea, rice, sugar and beef. Our econometric results indicate that the EMB did not exert a statistically significant effect on the empire’s share of these imports. In economic terms, Britain’s short-lived EMB was a failure.

 

Higgins and Varian
Figure 1: Stylised grocer’s window exhibiting domestic and empire produce caption

 

From one perspective, our results suggest that appeals to patriotism and imperial ‘self-help’ were fundamentally misguided. Empire suppliers had to compete with well-established foreign producers whose products were held in high-esteem by UK consumers: chilled Argentine beef was a far superior product to the frozen product from the Antipodes; while Danish butter predominated in much of northern England.

There were other key problems that the EMB ignored. Possibly the greatest shortcoming of the EMB was its failure to differentiate sufficiently the products of individual dominions from those of the empire.

In this regard, the Merchandise Marks Act 1926 was unhelpful: vendors were at liberty to sell butter and beef either with a definite indication of origin or the term ‘empire’;  for other produce, such as cheese, retailers were not required to indicate origin. While the EMB was advertising ‘Empire’ to little effect, the marketing campaigns of Dominion control boards, such as the New Zealand Dairy Produce Control Board, were winning the British consumer through more differentiated advertising.

Moreover, we argue that the EMB was underfunded. From 1928 to 1931, the EMB’s publicity expenditure averaged 0.07% of the value of Britain’s imports from the empire. In contrast, the New Zealand Dairy and Produce Control Board’s expenditure on its well-defined marketing campaign was 0.13% of the value of Britain’s imports of dairy products from New Zealand.

Our study of the EMB has contemporary relevance to debates on ‘trade blocs’. The EMB represented an attempt to forge a trade bloc through the non-conventional approach of advertising – extending preference within the constraint of free trade. While this innovative experiment of the interwar era failed (economically), it is nevertheless indicative of Britain’s desire to reorient its trade toward the Empire. In this respect, the EMB was a precursor to the ultimately ‘successful’ formation of trade blocs and, indeed, disintegration of the world economy in the 1930s.

 

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