The New Order

Price Stabilizer Michael V. Di Salle unveiled the latest change in his price-control structure last week. He ripped out the dollars & cents price ceilings which he had erected over thousands of food items in his freeze order of Jan. 26. For them he substituted a complex system whereby the Office of Price Stabilization regulates the percentage markups which retail grocers and wholesalers may tack on to the cost of goods. No one, not even tubby Mike Di Salle, is sure how the new order which becomes obligatory on April 30, will affect retail food prices. But Mike is optimistic. Said he last week: "We are sure that there will be more decreases than increases."

The order is a slicked-up version of the OPA regulations of World War II. To set a selling price for a can of peas, for example, the grocer looks at his wholesale cost, increases it by a fixed percentage taken from an official OPS markup list. The list covers 60% of the products in the nation's $32 billion annual food bill, including butter, baby foods, breakfast cereal, cocoa, coffee etc. Exempt: milk, cream, fresh meat, bread, liquor and 58 other commodities, all of which are still regulated by the Jan. 26 order, as well as fresh fruit & vegetables and sugar, which are not controlled at all.

The grocer will have to do a mountain of paper work. He will have to recalculate his prices every Monday, to account for changes in wholesale costs the week before. And the order is rigged to protect the smaller, often less efficient, storekeeper. Retail markups run on a sliding scale based on four grocer groups: independent stores grossing less than $75,000 a year those grossing from $75,000 to $37,5000; chain stores grossing less than $375,000; all stores grossing more than $375,000. The smaller the store, the bigger the mark-up allowed. Thus, the small grocer can mark up a can of baby food 25%, while a supermarket is allowed only 16%.

But Mike Di Salle thinks his new rule will give the honest grocer a squarer deal. Before the Jan. 26 order, many sharpshooters boosted their prices skyhigh, were rewarded when the order froze the prices at that level. By freezing markups instead of prices, OPS hopes to give everyone the same fair chance to make a profit. But there is no hope that food prices will be kept down if farm prices continue to rise. The grocer will simply pass any increased costs to the consumer.

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