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Latin American Consumers, British Multinationals, and the Merchant Houses, 1930-19601

Rory Miller

In 1923 Guy Locock and A.C. Rouse of the Federation of British Industries

(FBI) travelled to Argentina and Brazil to investigate, from a manufacturer's

point of view, the way that markets were changing. In his report Locock drew

attention to the 'remarkable development of Brazilian industry of recent

years'. 'It is no exaggeration', he stated, 'to say that the country is industry-

mad... [There exists] a strong nationalistic spirit which desires to see local

industries fostered at all costs'.2 This had led to a reorientation of British

trading interests. 'A large number of the big importing firms, which used to

deal chiefly in imported articles, are now buying their requirements from local

factories and acting as distributors of Brazilian products', he observed. 'In

certain lines such as matches, candles, boots, enamelled and hollow ware, and

office furniture the trade is nearly 100 per cent Brazilian'.3 'In many trades',

Locock concluded, 'it has already, or may shortly, become impossible to sell

imported goods against the locally made article, and in those cases, if we wish

to have any share of the trade, it is clear that we must manufacture locally.'4

The thrust of his entire report on Brazil was that changes in government

policies, market demands, and business structures demanded a vigorous and

innovative response from the companies the FBI represented.

1 The research for this paper would have been impossible without grants from the

Nuffield Foundation and the Economic and Social Research Council. I am particularly grateful to Jeannette Strickland and Gary Collins at Unilever Historical Archives, and Gordon Stephenson at Reckitt Heritage for permission to use their companies' archives. In South America the Chief Executives of the British Chambers of Commerce in Buenos Aires and São Paulo kindly provided access to their archives and publications.

2 G. Locock, 'Report on Brazil; Preliminary Report on Argentina, August 1923', p. 11: MSS. 200/F/4/38/1, Federation of British Industries archive, Modern Records Centre, University of Warwick.

3 Locock, 'Report on Brazil', p. 12.


Miller/ Latin American Consumers, British Multinationals, and the Merchant Houses 2

Locock was not so impressed by the growth of manufacturing in Argentina.

In his opinion the country was 'not likely to become industrialised'.5 In this,

he reflected the complacency of many long established British companies

which saw Argentina as a country whose basic purpose was to supply cheap

foodstuffs in return for British manufactures. However, even as Locock was

writing, the Alvear government was raising tariffs to protect local

manufacturers, and shortages of foreign exchange together with additional

tariff surcharges during the Depression further stimulated Argentine

industrial production.6 By the end of the 1930s the British Chamber of

Commerce in Buenos Aires was noting how the profile of British investments

in Argentina was changing. 'The migration of industry to Argentina', the

Monthly Journal remarked in 1937, 'is a development of vital importance.

British capital is being invested in distilleries, factories, rayon mills, and the

many other countless enterprises which can benefit by the remarkable skill

which Argentine labour, with an amazing adaptability to factory occupations,

can apply to the transformation into useful articles of Argentina's almost

inexhaustible supply and wide variety of raw materials.'7

The growth of manufacturing industry in Latin America was the subject of

much contemporary comment in the inter-war period.8 While Brazil and

Mexico took the lead, Argentina, Colombia, Chile, and Peru had all developed

important manufacturing sectors supplying the local market by the time the

Second World War broke out. This, however, is a development that historians

of foreign business in the region have tended to neglect. Their work on this


6 On the policy changes of the 1920s, see Colin M. Lewis, 'Immigrant Entrepreneurs, Manufacturing and Industrial Policy in the Argentine, 1922-1928', Journal of Imperial and Commonwealth History 16 (1987), 77-108

7 British Chamber of Commerce in Argentina (hereafter BCCA), Monthly Journal, 17:2 (November 1937), p. 22. On the growth of Argentine industry between the wars, see Adolfo Dorfman, Cincuenta años de industrialización en la Argentina, 1930-1980: desarrollo y perspectivas (Buenos Aires, 1983), and Jorge Schvarzer, La industria que supimos conseguir: una historia político-social de la industria argentina (Buenos Aires, 1996).

8 The classic contemporary statement is D.M. Phelps, The Migration of Industry to South America (New York, 1936). For a survey of pre-1930 growth, see Colin Lewis, 'Industry before 1930', in Leslie Bethell (ed.), Cambridge History of Latin America (Cambridge, 1986), IV, 267-323.


period concentrates on declining free-standing companies such as the railways

and tramways, or on early US multinational enterprise in plantations, mining,

and oil.9 The growth of multinational firms in Latin American manufacturing

before the 1960s has, for the most part, been neglected, and the response of

foreign merchants to the industrial growth that occurred is also almost

unknown.10

Those historians who have analysed the growth of local industry in Latin

America, moreover, have paid much more attention to issues of production

rather than examining the dynamics and characteristics of the large, and

increasingly sophisticated, markets for consumer goods that evolved in the

major cities and the ways in which industrialists and distributors attempted to

reach their customers. Fernando Rocchi, in one of the few studies focusing on

the market for locally produced manufactures, notes how the consumption of

such products grew rapidly in popularity in early twentieth-century Buenos

Aires. One aspect of this was the formation of specialised retail outlets using

devices such as window displays and press advertising to reach the middle

class and popular markets.11 This urban consumer 'boom' that Latin American

cities experienced at the beginning of the twentieth century, albeit on different

scales, had a number of other features: the enhanced significance of women as

consumers (Rocchi notes how women began to undertake 'shopping

expeditions' for pleasure); the reorganisation of the home due to the

9 See, for example, Thomas F. O'Brien, The Revolutionary Mission: American

enterprise in Latin America, 1900-1945 (Cambridge, 1996), an excellent book about the cultural impact of US capitalism but one that does not consider Argentina or Brazil, where, along with Mexico, US multinational investment in manufacturing was greatest.

10 Amongst the manufacturing industries more has probably been written on the motor industry in this period than on other sectors: Richard Downes, 'Autos over Rails: how US business supplanted the British in Brazil, 1910-1928', Journal of Latin American Studies 24 (1992), 551-564; Raúl García Heras, Automotores norteamericanos, caminos y modernización urbana en la Argentina, 1918-1939 (Buenos Aires, 1985). On British merchants in this period, see Robert Greenhill & Rory Miller, 'British Trading Companies in South America after 1914', in Geoffrey Jones (ed.), The Multinational Traders (London 1998), pp. 102-127. Geoffrey Jones, Merchants to Multinationals: British trading companies in the nineteenth and twentieth centuries (Oxford, 2000), pp. 305 and 312, briefly mentions their investments in Latin American manufacturing.

11 Fernando Rocchi, 'Consumir es un placer: la industria y la expansión de la demanda en Buenos Aires a la vuelta del siglo pasado', Desarrollo Económico 37:148 (1998), 533-558


introduction of new technology (the sewing machine at the end of the

nineteenth century, the refrigerator, washing machine, and radio in the first

half of the twentieth); the introduction and commercialisation of new leisure

activities, most significantly football and cinema; and the growth of

advertising both in the press and outdoors.

The breadth of the growing urban markets, spanning class and gender

differences, needs emphasising. Consumption of 'modern' products in the

early twentieth century involved rather more than members of the elite

purchasing foreign imports.12 The local industries that grew most noticeably

were textiles and apparel, footwear, and the food, drink, and tobacco sectors,

items of mass consumption. Many of the local brands which are still evident

today, such as those of the major flour, biscuit, confectionery, beverages and

tobacco companies, date from this time. As in the more developed countries,

the use of brands, supported by new advertising and marketing techniques

and intended to attract the customer away from cheaper generic products,

characterised the growth of a consumer culture. This in turn led to the

creation of specialised new firms and professionals that could transfer

advertising and market research techniques developed in North America and

Europe into the Latin American environment. Some were foreign, such as J.

Walter Thompson and McCann Erickson, but from the first they depended on

local professionals and quickly encountered competition for accounts from

local firms.13

What did this mean for the foreign manufacturers and traders whose

market that was now changing rapidly as demand for consumer goods grew

and local competition increased? Foreign businessmen, whether

12 On the Latin American propensity to consume foreign imports, see especially

Arnold J. Bauer, "Industry and the Missing Bourgeoisie: consumption and development in Chile, 1850-1950." Hispanic American Historical Review 70 (1990), 227-254; Benjamin Orlove (ed.), The Allure of the Foreign: imported goods in postcolonial Latin America (Ann Arbor, 1997); and Arnold J. Bauer, Goods, Power, and History: Latin America's material culture (Cambridge, 2001), especially chapters 5-6.

13 On these companies in Latin America, see James P. Woodard, 'Marketing Modernity: the J. Walter Thompson Company and North American advertising in Brazil, 1929-1939', Hispanic American Historical Review 82 (2002), 257-290, and Philip H. Geier, 'Doing Business in Brazil', Columbia Journal of World Business 31:2 (1996), 44-53 (on McCann Erickson).


manufacturers or merchants, were forced to respond to these trends. The

worst action they could take, if their businesses were to survive and prosper,

was to ignore them. In the case of British companies, the subject of this paper,

they have generally been regarded as making an inadequate response to new

marketing opportunities. The comment of the D'Abernon Mission, which

visited South America in 1929 to investigate the decline in British trade, is

well-known:

In new departments of trade we have been completely outdistanced… Our

methods of production, representation, advertisement, marketing, and sale

require thorough revision… British firms too often manufacture and sell

what they think the customer ought to have rather than what he likes… A

considerable volume of British trade is lost owing to adherence to old

methods and inadequate representation.14

Such comments fit well with the interpretations of international business

historians such as Alfred Chandler and the criticisms they have made of the

competitiveness of British manufacturing firms at global level.15

This paper examines the response of British manufacturers and merchants

to the growth of consumerism in the major Latin American countries,

primarily on the basis of corporate archives. It focuses on Argentina and

Brazil, the two largest markets in South America, and on the early period of

industrialisation preceding the Second World War. It also concentrates on a

particular sector of the consumer goods industries — household goods,

foodstuffs, and toiletries — leaving for future investigation other important

sectors such as tobacco, pharmaceuticals, automobiles, gasoline, and electrical

goods. While this focus is a result, at least in part, of the availability of

sources, it has the advantage that it pinpoints key areas of interest to female

14 United Kingdom, Department of Overseas Trade, Report of the British Economic

Mission to Argentina, Brazil, and Uruguay (London, 1930), pp. 6, 45-46, cited in Rory Miller, 'British Trade with Latin America, 1870-1950', in Peter Mathias & John A. Davis (eds.), International Trade and British Economic Growth from the Eighteenth Century to the Present Day (Oxford, 1996), pp. 118-145. Other historians who have followed this line of interpretation have included David Joslin and Roger Gravil. Note that 'the customer' is assumed to be masculine.

15 Alfred D. Chandler, Scale and Scope: the dynamics of industrial capitalism (Cambridge, MA., 1990), especially pp. 366-392.


consumers. It is concerned, therefore, with the ability of foreign businessmen

to market their products to new consumers not only across cultures, but also

across genders. The ability to recognise and adapt to the problems that this

entailed was a major factor in the success that different firms enjoyed. The

essential argument is that manufacturing firms which had already developed

specialised marketing skills elsewhere were successful in adapting them to

Latin American markets, while the British merchants already there were stuck

in both a nineteenth-century and a male world and ultimately failed.

Lever Brothers: soap, toiletries, and foodstuffs

In 1929 the British firm of Lever Brothers and the Dutch combine, Margarine

Unie, amalgamated to form Unilever. Lever Brothers, a firm known primarily

for manufacturing soap, had already commenced its expansion in South

America, but the new interests, especially in edible oils and fats, broadened its

options for growth there.16 The strength of the company at this time lay in the

development and marketing of branded products, Sunlight Soap and Lux

Flakes for laundry, and Lifebuoy Soap and Lux Toilet Soap for personal

hygiene. Following the acquisition of several other British soap firms in the

early twentieth century, it had also secured the rights to other brands,

including soap powders like Rinso.17 One firm it purchased, J. & E. Atkinson,

manufactured a range of scents, perfumes, and toiletries for both men and

women, and already possessed factories in four South American countries.18

Clearly, if Levers were to sell products like soap and toiletries in Latin

America, they had to pay particular attention to female consumers.

Developing a marketing strategy also involved investigating and adapting to

local washing and laundry habits, taking note especially of the widespread

16 On the global history of Unilever see Charles Wilson, The History of Unilever (2

vols., London, 1954) and Unilever, 1945-1964: challenge and response in the postwar industrial revolution (London, 1968); David Fieldhouse, Unilever Overseas: the anatomy of a multinational, 1895-1965 (London, 1978). Geoffrey Jones is currently extending the corporate history of Unilever beyond 1965.

17 Roy Church & Christine Clark, 'Purposive Strategy or Serendipity? Development and diversification in three consumer product companies, 1918-1939: J. & J. Colman, Reckitt & Sons, and Lever Bros./Unilever', Business History 45 (2003), 33-34.

18 Wilson, History of Unilever, II, 359-360.


employment of washerwomen and domestic servants, and developing an

appreciation of the social and environmental differences between countries

and indeed among different regions within the same country. Levers' problem

in Latin America was to develop the market for the premium branded

products in which they specialised as rapidly as possible, for they could not

compete with the unbranded or low-quality branded soaps made by local

factories, frigoríficos, and butchers from the readily available raw materials.19

Like many British companies exporting to Argentina, the wealthiest market

in Latin America before the 1930s, Levers had opened a sales office in Buenos

Aires long before the First World War, in 1904. Their representative there

worked alongside the merchants who acted as the company's agents,

canvassing trade in Argentina and neighbouring countries and leaving the

merchants to handle the importation and distribution of Lever products. By

1925, the date of the first director's visit to Argentina, the Buenos Aires office

had six staff (the manager, two clerks, two travellers, and a warehouseman).

However, advertising was still limited, averaging no more than £1500 a year

spent mainly on railway station and tramcar plates, and the organisation was

considered weak. The salesmen were stretched to cover such a large area, and

found it difficult both to make repeat visits to existing customers and to find

new clients.20 Under pressure from the imminent imposition of import duties

and the threat that local competitors would quickly dominate the market,

Levers took the decision to construct a factory at Avellaneda on the southern

outskirts of Buenos Aires, commencing soap production there in 1927.

One of the consequences of such a rudimentary sales organisation in South

America had been the neglect of the Brazilian market. When C.E. Tatlow

visited São Paulo and Rio de Janeiro in 1925 on his way back from Buenos

Aires, he commented rather tersely: 'The position of our trade in Brazil today

19 Manufacturing soap was a technologically straightforward process with low entry

costs. The same is true of the artificial non-soap detergents (NSDs) developed in the 1940s. In both cases barriers to entry arise from the development of brands and the advertising and marketing expenditure required to compete with those that are well established.

20 'Report on Visit to Buenos Aires of Mr C.E. Tatlow, August-September 1925', pp. 1-2, OSF 1/2, Unilever archive, Port Sunlight. Hereafter documents in this series will be referred to as Unilever, Visit Report, Director's name, Country, Date, and File Number. All are in the Unilever Historical Archives at Port Sunlight.


is that we have not got any, nor have we ever had since we first sent out a

representative [to South America] over twenty years ago'.21 Levers had simply

exported through merchants, who had done little to develop the market, with

the result that they accounted for less than 10 per cent of soap imports, a trade

which had already been seriously restricted by the growth of low-quality local

suppliers protected by tariffs. However, Tatlow also observed that the market

for good-quality branded soaps in Brazil was open. No other major

international competitor was present (by this time Levers were already in

competition on a worldwide scale with Proctor & Gamble, and Colgate-

Palmolive was formed shortly afterwards, in 1928). Levers therefore decided

to invest in Brazil as well as Argentina, largely to gain first-mover advantages,

and they opened their new factory in São Paulo in 1930.22

The commercial results of these ventures were initially mixed. While the

Argentine factory made profits almost from the start, Levers' Brazilian

subsidiary soon ran into financial difficulties. For a time São Paulo worked as

a holding operation with a skeleton staff while the company tried to minimise

its losses and await an upturn. However, by the end of the 1930s visiting

directors expressed optimism about the future of both ventures. Annual

turnover in Argentina exceeded £300,000, while the Brazilian company had

turned the corner into profitability.23 In each case success was due to one

particular product which had been adapted to the local market and surpassed

sales forecasts, Sunlight Toilet Soap in the case of Argentina and Lux Toilet

Soap (called Sabonete Lever due to trademark disputes) in Brazil. This gave

the firm the resources and confidence to justify the introduction of new

products in each market.24 In Argentina Rinso soap powder and Olavina, a

new brand of edible cooking and salad oil adapted to local tastes, were both

21 Unilever, Visit Report, C.E. Tatlow, Brazil, September-October 1925, p. 4, OSF 3/1.

22 The timing was not ideal. Not only was the Depression deepening, but in exactly the same month that the factory opened, October 1930, São Paulo was disrupted by the short civil war that brought Getúlio Vargas to power.

23 Unilever, Visit Report, Arthur Hartog, Argentina, June-July 1941', p. 5, OSF 1/13.

24 This was vital to the company in order to spread its manufacturing, administrative, and selling overheads.


manufactured and marketed for the first time in 1938/39.25 In Brazil Irmãos

Lever expanded production of a specially adapted version of Lifebuoy soap

and introduced Gibbs SR toothpaste.26 One of the company's executives,

visiting Argentina for in 1939, summarised the company's strategy in the

major Latin American markets neatly and succinctly:

Our business here is to sell high class proprietary lines with the aid of

scientific advertising and marketing; to attempt to obtain any substantial

proportion of the common soap market would, at this junction, cost an

enormous sum of money and lead us into a type of business for which we

are not equipped and in which we are not really interested. Our policy in

the Argentine must be to educate the population upwards and I hope it will

not be very long before we are … selling a few excellent lines at good profits

and snapping our fingers at all unprofitable bulk business.27

It is worth noting the thrust of this comment: Unilever was committed to

modern marketing and advertising methods and viewed itself as 'educating'

the public towards the purchase of high-quality products, in other words

taking a pro-active role in the development of modern consumer markets.

The results largely bear out this description. Levers were able to develop

their business in South America through their sensitivity to local societies and

their ability to transfer knowledge from their experience elsewhere in order to

adapt their products and their marketing efforts to the particular environment

in which they were working. This transfer was aided by the recruitment and

training of capable managers, frequently from the local British communities,

supported by regular visits from directors with a global experience and

knowledge.28 What could the existing British merchants in Latin America

25 While Rinso was an existing product, Olavina was developed by the company's oils

experts from scratch in order to meet Argentine tastes using local inputs.

26 Unilever, Visit Report, W.P. Scott, Argentina, November/December 1939', OSF 1/12; Unilever, Visit Report, G.A.S. Nairn, Brazil, January/February 1939, Parts I and II', OSF 3/7.

27 Unilever, Visit Report, W.P. Scott, Argentina, November/December 1939', p. 26, OSF 1/12.

28 On the question of management see Rory Miller, 'The British Communities and the Management of British Firms in Post-War Latin America' (unpublished paper, obtainable from the author).


offer to them? Little or nothing. They did not possess the financial resources,

the marketing and advertising knowledge, or the specialised skills that the

modern manufacturing firm required. By the end of the 1930s Levers had

dispensed with their services. With regard to Levers' toiletries business in

Argentina, conducted at this stage largely under the Vinolia brand,

Chipperfield commented in 1930 that 'there is no doubt that the firm who

previously held the agency completely neglected it'. As a result the toiletries

business was dominated by US firms.29 In the case of Brazil visiting directors

ascribed at least part of the failure to develop the soap market to the

merchants they had appointed as agents. Chipperfield noted in 1930 that in

Santos 'sales had been left entirely to Wilson Sons & Co., an established

British merchant house, with the result that our products had not received any

concentrated push or the help of propaganda efforts'.30 Three years later

Sidney van den Bergh recommended that Levers dispense with the services of

Wilsons, adding that this would be much to the relief of the firm's own

travellers who had to field persistent complaints about Wilsons' poor

distribution and service.31 This change was eventually made in 1936, once

Levers had reassessed their long-term strategy in Brazil, but it was

irreversible. 'To return to Agents', Scott stated at the end of the decade, 'is

unthinkable for any progressive business and to rely entirely on wholesalers

particularly in this country where they render even less service than is usual,

equally so'.32 Levers possessed strengths in four main areas that the

established merchants did not: identifying and defining their market;

developing appropriate products; marketing and advertising; and selling

efficiently. These qualities had given them a competitive advantage at home

and in the more developed overseas markets in Europe, North America, and

29 Unilever, Visit Report, Chipperfield, Argentina, October 1930', p. 3, OSF 1/6. At

this time the Atkinsons affiliate was only partially owned and operated at arm's length from Unilever. The major US competitors in toiletries, apart from Colgate-Palmolive and Kolynos, were firms like Coty, Max Factor, Helena Rubinstein, and Elizabeth Arden.

30 Unilever, Visit Report, Chipperfield, Brazil, September/October 1930', p. 6, accession 1993/28, box 8.

31 Unilever, Visit Report, Sidney van den Bergh, Brazil, February 1933', p. 14, OSF 3/3.


the Empire. Despite some traumas they proved able to transfer them to

Argentine and Brazil. Each of these requires a little more explanation.

One of the keys to the successful development of Levers' consumer markets

was careful observation and analysis, initially undertaken on an apparently

casual and non-quantitative basis, but by the end of the 1930s conducted

using recently developed and more scientific methods of market research.33

The Lever directors who first visited Argentine and Brazil explicitly compared

them with markets elsewhere, identified variations among them, and noted

the social and regional differences which would permit them to target

particular audiences. Typical of many of the early visitors is van den Bergh's

observation when he first visited Rio de Janeiro in 1933 that 'the more

educated people, who might be inclined to buy advertised brands of better

quality, do not buy the soap themselves, but leave the purchase to their black

servants, who only look at price, are frequently illiterate and buy what they

have always bought'.34 This limited Levers' markets in Brazil, but also

influenced the ways in which they approached their opportunities. Having

taken the decision to manufacture for the top end of the market it became

necessary to pay detailed attention to issues like fashion; local tastes (which

affected the perfumes added to soap, for example); leisure pursuits (which

might offer opportunities for them to market particular products, for example

to young people participating in sports); and local laundry and washing habits.

Recognising the gendered nature of consumption was important to any firm

seeking to entering Latin American consumer goods markets. Given the

character of Levers' products, the question of how to reach women with their

marketing message was a particular problem; all the early directors reported

32 Unilever, Visit Report, W.P. Scott, Brazil, December 1939-January 1940', p. 14,

OSF 3/8.

33 US advertising agencies were a particularly important vehicle for the transfer of market research techniques. Woodard describes how one of the first tasks carried out by J. Walter Thompson following the establishment of their branch in São Paulo was extensive research on marketing and media conditions, allowing them to segment the Brazilian market on income and gender criteria: 'Marketing Modernity', 267-271.

34 Unilever, Visit Report, Sidney van den Bergh Brazil, February 1933', p. 5, OSF 3/3. In this Brazil contrasted with Argentina, where Levers had found a much larger proportion of middle-class women doing their own household laundry.


in detail on the state of the media in the countries they visited. As

Chipperfield commented in 1930:

The usual media for educating [the public] to the use of quality articles are

largely ineffective so far as are concerned the people who actually purchase

and use our household products… The Brazilian wife (apart from ex-

European elements) does not as a rule do the shopping, but relies largely on

servants, … does not undertake any tasks herself that might be called

menial, such as washing clothes, for fear of losing “caste”, … does not as a

rule wash her face, but uses cosmetics, and lastly … does not study

newspapers as Europeans do, -- in other words, … she is still far from the

European idea of “freedom”, so far as women are concerned, and remains

very largely in retirement.35

Using traditional methods of press and display advertising in order to reach

such consumers seemed ineffective: 'What I want to know', Scott wrote in

1940, 'is who reads newspapers? No one can tell me if women read them,

though most people make vague references to women's supplements. I have

not seen a woman reading a newspaper in Brazil but I have not been into any

Brazilian homes.' In contrast, however, 'The answer to the question: who

listens to the radio? is easy: Everyone. Every main shop in every town reached

by radio apparently has a set, apparently turned on all day'.36 Modern

communications technology, largely unavailable at the beginning of the 1930s

but widely diffused by the close of the decade, provided the key medium to

reach the firm's potential customers in the cities.

The development of new products was also crucial since Levers' original

staples, the most important of which was Sunlight Soap, failed to have any real

success in the culturally different markets of South America.37 Without new

35 Unilever, Visit Report, Chipperfield, Brazil, September/October 1930', pp. 41-42,

accession 1993/28, box 8.

36 Unilever, Visit Report, W.P. Scott, Brazil, December 1939-January 1940', p. 20, OSF 3/8.

37 Contrary to expectations, Lifebuoy soap had no market in Buenos Aires beyond the Anglo-Argentine community, who had presumably been brought up on it, and a few Argentines who found it useful for washing their dogs. 'Dealers practically shuddered when it [Lifebuoy] was mentioned', Scott reported in 1939. It was said to be used by mechanics to clean their hands or by people with fleas. 'The line is


lines Levers could not operate their factories or use their expensively paid

expatriate and locally recruited management staff to optimum capacity. In

Argentina it was careful observation of how Sunlight (jabón inglés) was

actually being used that resulted in success. Whereas housewives in Britain

purchased Sunlight for the laundry, Levers discovered that in Buenos Aires

customers were using it for personal hygiene, even though it was being sold

through grocers' shops rather than hairdressers, pharmacies, and drapers, the

normal outlets for toiletries. The answer was to develop a finer milled version

of Sunlight specifically for personal use, and this proved an instant success

once it was introduced in 1936 in the middle of the Buenos Aires summer.38

Having thus redefined the markets for its existing product range, Levers now

sought to develop the laundry market which Sunlight had failed to penetrate

by persuading the public to move from using cheap bar soaps to a soap

powder suitable for Argentine conditions. This lay behind their decision to

manufacture Rinso. At the same time the expertise in foodstuffs which the

merger with Margarine Unie had brought into the group allowed them to

develop an edible oil, Olavina, explicitly designed for the Argentine market

and its Mediterranean culinary heritage.39 In both these cases the local

management prepared the ground carefully, using provincial cities like Bahia

Blanca and Córdoba for test marketing and creating specialised sales forces to

launch the products in Buenos Aires.

The development of Levers' advertising methods supported these changes.

Once their factories were operating in Buenos Aires and São Paulo advertising

appropriations grew rapidly. In Argentina the company allocated £15,000 in

1928 in order to launch its new products, ten times the level of their previous

advertising expenditure. By 1933 this sum had grown to m$n338,500 (almost

£60,000); five years later, excluding the launch costs for Olavina, it had risen

to m$n1,500,000 (almost £100,000) for the whole of the firm's subsidiaries,

probably never used for house cleaning', he continued, 'and judging by the dogs I saw little soap is spent on them'. Unilever, Visit Report, W.P. Scott, Argentina, November/December 1939', p. 21, OSF 1/12.

38 Unilever, Visit Report, J.L. Heyworth, Argentina, April 1936', pp. 6-8, OSF 1/9. The timing of the launch was deliberate.

39 Unilever, Visit Report, G.A.S. Nairn, Argentina, January 1939', pp. 26-27, OSF 1/11.


m$n850,000 for Levers and m$n650,000 for Atkinsons' toiletries and

cosmetics business.40 From the start Levers designed their advertising in

Argentina in-house, using the techniques and designs developed by their

Lintas agency in Europe, but this required a skilled and trained staff well

attuned to local culture. In Brazil the company's financial problems, which

meant that staffing costs had to be curtailed, led them to close their own

advertising department and employ J. Walter Thompson instead. After a year,

however, Levers concluded that while JWT knew how to sell cars, they had

little idea about selling soap (another example perhaps of the importance of

gender sensibilities), and they dispensed with their services.41 The Lintas

agency was reopened, and indeed in 1940 separated from Irmãos Lever,

permitting it to offer a full advertising service to other non-competitive

clients.42

The content of Levers' advertising and the media they employed changed

considerably during the 1930s, away from the use of static enamel displays on

railway stations and tramway cars, a technique characteristic of an earlier era,

to the more intensive use of the press, cinema, and radio. Again gender may

have played a part here: public transport may have still been much more of a

male preserve, associated with journeys to work, and less appropriate

therefore as a vehicle to reach married middle-class women. Thus Lintas

contracted local Argentine film stars to endorse its Lux Toilet Soap in press

advertisements and personal appearances, drawing on the massive popularity

40 Overseas Committees Agendas, 15 December 1927 (Book D), 22 February 1933

(book L), Unilever archive; Unilever, Visit Report, C.E. Tatlow, Argentina, November/December 1937', p. 26, OSF 1/10. The devaluation of the peso meant that in sterling terms these sums bought more in terms of design staff and space.

41 Unilever, Visit Report, J.L. Heyworth, Brazil, May 1936', p. 16, OSF 3/5. In his study of JWT in Brazil, Woodard notes that they were unsuccessful in bidding for some account and lost others after a short time: 'Marketing Modernity', 266-267, and 275. There may have been a large gap between identifying the potential of women as consumers, which JWT certainly did, and finding a means of marketing to them successfully across the cultural divide. However, note that Church & Clark ascribe the success of Lux Toilet Soap in Britain in part to JWT's advertising campaigns: 'Purposive Strategy or Serendipity?', 33.

42 Overseas Committee Agendas, 2 October 1940 (Book Z), Unilever archive.


of cinema in South America.43 Their use of radio evolved from spot

advertisements to the production of their own drama programmes (soap

operas), which they paid to have transmitted at peak times by the principal

radio stations. To gain the necessary skills, given that there was no

commercial radio in Britain and hence no home experience on which they

could draw, the Anglo-Argentine head of advertising in Buenos Aires was sent

to the United States in 1935 on his way home from training in Britain.44 Radio

dramas and advertising were important for educational purposes, especially in

relation to the introduction of new products. Argentine women were thus

taught how to pronounce Sunlight (difficulties on this score had led to people

normally referring to it simply as jabón inglés); how to use soap powders, an

essential task since Levers were the first to market this product in Argentina;

and how to use Olavina (Tía Olavina's daily show always ended with a recipe).

These were employed alongside other common promotional methods of the

period, including samples, gifting, and competitions (one of which involved a

daily prize for the person who answered a Lever salesman's random midday

telephone call to a house in Buenos Aires by saying 'Olavina' rather than

'Ola').45 Radio, as noted already, had the great advantage of reaching women

who remained in the house and did not read newspapers, and in particular, in

Brazil, the illiterate.

The other important piece of the jigsaw for Levers was an investment in

selling on a scale that no merchant could contemplate. By 1933 Levers had

expanded their sales force in Argentina to 23. Outside Buenos Aires they were

using motor vehicles to reach potential clients and deliver their products to

retailers. By 1940 the sales force had grown to 53, including those appointed

specially for the Olavina campaign.46 The objective was to have Levers'

products displayed and sold through as many outlets as possible, going direct

43 Unilever, Visit Report, J.L. Heyworth, Argentina, March-April 1935', p. 21, OSF

1/8; Unilever, Visit Report, G.A.S. Nairn, Argentina, January 1939', p. 21, OSF 1/11.

44 Unilever, Visit Report, J.L. Heyworth, March-April 1935', p. 7, OSF 1/8.

45 I am grateful to Mr Charles Lagrange, former Chief Executive of the Cámara de Comercio Argentino-Británica in Buenos Aires, for this anecdote.

46 Unilever, Visit Report, Sidney van den Bergh, Argentina, February 1933', p, 28, OSF 1/7; Overseas Committee Agendas, 2 April 1940, Unilever archive.


to the retailer rather than depending on inefficient wholesalers, and breaking

down the barriers between grocery stores on the one hand and pharmacists

and draperies on the other. Much of the success of Sunlight Toilet Soap was

due to the fact that, unlike many of its competitors, it was sold by grocers who

handled the original laundry Sunlight, and this link also helped of course with

the launch of Olavina. However, Levers also took advantage of the widespread

diffusion of Arab-owned drapery businesses which sold toilet soaps over the

counter or door-to-door: 'their credit needs watching but they shift big

quantities', one visiting executive commented.47

Levers' investment in its sales force in Argentina, probably the most fully

developed consumer market in South America at this time, outpaced that in

Brazil. The São Paulo management seems to have been nothing like as

dynamic and the sales staff was smaller (12 in 1936). The manager's lack of

experience in marketing and selling branded products was a source of

constant concern to visiting directors, and indeed at the end of the 1930s he

was instructed explicitly to use the successful Buenos Aires methods as a

model. Nevertheless, Irmãos Lever, the Brazilian firm, had already begun to

develop along similar lines to the Argentine branch, building up its own

channels of propaganda and distribution, going directly to the retailers, and

also selling large amounts to 'Syrian traders' who acted both as retailers

themselves and as wholesalers to small shopkeepers in the suburbs of São

Paulo and Rio de Janeiro.48 It proved relatively straightforward to transfer

the sales techniques learned in Argentina to strengthen the position of Irmãos

Lever in Brazil, even though the two countries had very different market

characteristics.

Reckitts: household goods

A walk along the household products and foodstuffs shelves of any Argentine

supermarket will lead one past a number of Unilever brands, an indication of

47 Unilever, Visit Report, J.L. Heyworth, Argentina, April 1936', p. 22, OSF 1/9.

48 Unilever, Visit Report, J.L. Heyworth, Brazil, May 1936', pp. 14-15, OSF 3/5; Unilever, Visit Report, G.A.S. Nairn, Brazil, January/February 1939, Parts I and II', pp. 5-6, OSF 3/7; Unilever, Visit Report, W.P. Scott, Brazil, December 1939-January 1940', pp. 14-15, OSF 3/8.


the long-lasting success of the strategies developed in the 1930s to 'educate'

and capture consumer markets. Nearby one will almost always find a number

of other popular brands — Espadol disinfectant, Brassovora polishes, and

Savora mustard — manufactured by Reckitt & Colman, one of the other major

British consumer products firms that developed in the early twentieth

century.49 All of these brands date back to that time.

Reckitt & Colman was formed as a result of a merger in 1938, but their

association in South America went back to 1913 when they formed Atlantis

Ltd. as a joint venture to develop and share profits from their sales in the

region. The two component firms each had strong interests in the laundry

starch and blue business, the original subject of the Atlantis agreement, but

they also manufactured other goods. Colmans dominated the British mustard

trade, while Reckitts had moved into polishes and household cleaners.

Reckitts' big inter-war coup was the launch of Dettol in 1933 as an antiseptic

for hospital use (marketed as Espadol in South America). This provided a

basis for their later expansion into pharmaceuticals with products such as

Disprin. By then Reckitts seem to have been by far the more dynamic and

successful of the two firms.50 While Colmans' brands were valuable, Reckitts

took the lead in developing manufacturing in South America before 1938.

Reckitts' expansion had strong parallels with that of Lever Brothers. They

sent a permanent representative to Buenos Aires to open a sales office in 1908,

four years after Levers. Like Levers they initially employed their own

'introducers' while leaving merchants in charge of importing, warehousing,

and distribution (MacAdam in Buenos Aires and Lefebvre in Rio). Advertising

expenditure for 1909 was fixed at £780 for Argentina and £575 for other

countries (Brazil and Uruguay) in addition to staff salaries. The following year

Reckitts appointed Graham Rowe, a long established west-coast merchant

house, as agents in Peru.51 Atlantis, their joint venture with Colmans,

49 Reckitt & Colman merged with the Dutch firm, Benckiser, in 1995. The Colman

food brands were subsequently sold to Unilever.

50 For a summary of the background in Britain, see Church & Clark, 'Purposive Strategy or Serendipity?', 26-37 and 40-46.

51 Reckitt & Sons Ltd., Board Minutes, 1 July 1909 and 6 February 1910 (Book 3), Reckitt archive, Hull. Hereafter this source will be cited as Reckitt, Board Minutes, Date (Minute Book Number).


continued to grow after World War I. The representative in Buenos Aires was

upgraded to the position of manager; a new employee was appointed to

develop markets on the west coast of South America; and the decision was

taken to construct a plant to manufacture laundry blue for sale under both the

Reckitts' and the Colmans' brand names in Brazil. A separate company,

Atlantis (Brazil), was formed for this purpose, and production commenced in

1924.52 Manufacturing of blue also began in Argentina in 1929, following the

purchase of a local competitor, and in 1931 the firm began to make Brasso in

Chile, using space in the works of the associated Nugget Polish Company.53

The following year the decision was taken to manufacture Brasso in

Uruguay.54 By 1939, therefore, Reckitts were manufacturing metal polishes,

as well as laundry blue, in four South American countries, and their factories

also produced the tinplate containers required for packaging.55

Like Levers the growth of these businesses depended on persuading

customers to purchase higher-quality branded products rather than cheaper

generic goods. In the lines in which they were principally engaged the

technical barriers to entry were low. In the case of laundry blue supplies of

ultramarine, the principal constituent, could easily be purchased on the open

market, and manufacture and packing required little in the way of specialist

knowledge or processes. Thus new firms entering the market and

undercutting established brands frequently threatened Reckitts' attempts to

dominate sales. The purchase of competitors, a commonly used strategy,

offered only a temporary respite before new ones appeared. The firms

therefore began to adopt aggressive selling methods in order to defeat them,

using devices like special offers to retailers, deferred bonuses, and giveaways

to customers.56 One instance of such tactics involved both Levers and Reckitts

in Argentina in the mid-1930s. A local soap-making firm, Llauro, began to

give away laundry blue with its household scourers and laundry soaps, directly

52 Reckitt, Board Minutes, 7 October 1921 (Book 7), 4 January 1923, 3 May 1923

(Book 8).

53 Reckitt, Board Minutes, 26 March 1929 (Book 12), 31 March 1931 (Book 13).

54 Reckitt, Board Minutes, 29 June 1932 (Book 13).

55 Atlantis Ltd., Minutes of Managers' Meetings, 15 March 1939, Reckitt archive.

56 Reckitt, Board Minutes, 1 November 1927 (Book 12).


threatening Levers' growing business as well as Reckitts. In response Reckitts

employed Levers, whose own attempts to introduce Vim to the Argentine

market had failed, to manufacture a scourer for them which they could gift

with their proprietary blue. For Levers manufacturing scourer at cost for

Reckitts utilised spare capacity, thus spreading their overheads, as well as

helping them to defend their own position in the soap market against Llauro.57

The struggle continued for two years and ended only when Reckitts purchased

Llauro's blue and metal polish business, together with that of another

competitor, E.F. Moresco.58

For Reckitts, as for Levers, success came only through manufacturing in

sufficient quantity to cover their overheads, working hard to introduce

products suited to the markets, carefully selecting which to manufacture, and

selling aggressively.59 It was recognised that launching any new product

would involve 'long, continuous, and costly advertising', and expenditure was

therefore targetted on particular products and markets.60 In 1933, for

example, the Board agreed a special advertising appropriation for Argentina

aimed at developing Reckitts' markets amongst the turco traders.61 By 1939

the advertising budget in Argentina had reached m$n159,000 (almost

£10,000), covering both Reckitts' and Colmans' laundry blues, Brasso and

Silvo polishes, and Colman's mustard products. Methods included the

traditional ones of window displays, sampling, and the press. Reckitts had

also commenced the use of radio as well, but they exhibited more doubts

about its effectiveness than Unilever.62

57 Reckitt, Board Minutes, 6 September 1934, 6 December 1934 (Book 14); Unilever,

Visit Report, J.L. Heyworth, Argentina, March-April 1935', p. 27, OSF 1/8. According to Church & Clark, Reckitts and Unilever had agreed in 1931 not to manufacture several products in the other's portfolio. Under this arrangement scourer was reserved to Unilever: 'Purposive Strategy or Serendipity?', 47.

58 Reckitt, Board Minutes, 7 January 1937 (Book 14).

59 In contrast to Levers, Reckitts did not develop any products specifically for these markets before World War II.

60 Reckitt, General Export Committee Minutes, 25 January 1928.

61 Reckitt, Board Minutes, 6 July 1933 (Book 13).

62 Reckitt & Colman Ltd., General Export Committee Minutes, 14 December 1939; Atlantis Ltd., Managers' Meetings, 10 October 1935, 8 October 1936, Reckitt archive.


Like Levers, Reckitts discovered that the merchant houses in Argentina and

Brazil were totally inadequate as a means of developing markets for branded

household products, and they gradually dispensed with them and internalised

their functions. Atlantis established a new office in Argentina in 1923, with

Colmans' former representative as manager, but continued to employ

merchants to handle distribution to retailers.63 However, the extent of

coverage depended on the financial resources of the trading houses, which

determined their ability to push Reckitts' and Colmans' products. In fact the

merchants were financially weak. MacAdam and Moore & Tudor, the firms

that represented Reckitts and Colmans respectively in Buenos Aires at the

beginning of the century, both suffered serious problems during the trade

recessions of the 1920s and 1930s, while Graham Rowe, Reckitts' agents in

Peru, went into liquidation in 1931.64 When the time came to review the

reasons for the serious threat that Reckitts had faced from Llauro and

Moresco in Argentina, managers emphasised the deficiencies of the

organisation that the merchants had established. Inadequate sales

information had also meant that Reckitts' management had not fully

appreciated the growing threat to their markets from the newcomers. It

became clear that due to their lack of good contacts in the retail trade they had

consistently underestimated the volume of their competitors' sales and the

extent to which they had been prepared to discount prices.65

By the mid-1930s, therefore, Reckitts' use of merchants was coming to an

end. Given the increasing need to manufacture a more extensive range of

products, they took the decision to establish another Atlantis subsidiary,

Brassovora, in Buenos Aires to take charge of both the factory and sales. This

would also avoid the threat of double taxation of profits. Brassovora SRL was

eventually registered in 1935.66 In Brazil, where Reckitts were longer

established and had begun to manufacture earlier, the decision to terminate

the use of agents except in the most distant regions had already been taken.

63 Reckitt, Board Minutes, 4 January 1923 (Book 8).

64 Reckitt, Board Minutes, 3 August 1922 (Book 8), 3 September 1931 (Book 13).

65 Atlantis Ltd, Managers' Meetings, 6 May 1937, Reckitt archive.

66 Atlantis Ltd., Managers' Meetings, 12 September 1935, Reckitt archive.


The firm's experience with British merchant houses in the country had been

distinctly unsatisfactory, and they had reported as much to Levers in 1930.67

However, the smaller Latin American markets remained a problem. Their

volume of sales did not justify the overheads of forming a subsidiary, yet the

use of agents was often inefficient and could lead to a rapid and irrecoverable

loss of trade, as in Chile in the early 1930s.68

The British Merchants

The experience of both Levers and Reckitts thus raises questions about the

capacity of the British merchant houses to respond to the growth of more

sophisticated consumer markets in countries like Argentina and Brazil.69 The

evidence of other British firms investing in Latin America would support the

impression that the merchants lacked resources and the appropriate skills.

Manufacturing companies increasingly by-passed the trading firms in

Argentina and Brazil, creating their own sales branches, and then moving into

manufacture as markets grew and import duties and exchange controls began

to threaten the position they had established. Several pharmaceuticals

companies, for example, established offices in South America during the inter-

war period, in some cases because they were extremely specialised, such as the

veterinary products manufacturers, or else because their branded

preparations needed substantial advertising in order to develop the market.

By the end of the 1930s firms like Cooper Sons & Robertson, Beecham, Allen &

Hanbury, Burroughes Wellcome, and Glaxo all had sales offices, and in some

cases secondary manufacturing (packing) facilities, especially in Argentina.

Engineering firms also opened offices in Buenos Aires; some even began to

represent others who preferred to deal with them rather than the established

merchant houses. Metropolitan Vickers, for example, arrived in 1921, and also

acted for Associated Electrical Industries, which incorporated British

67 Unilever, Visit Report, Chipperfield, Brazil, September/October 1930', p. 68,

accession 1993/28, box 8.

68 Atlantis Ltd, Managers' Meetings, 19 October 1939, Reckitt archive.

69 On US views of British merchants and the perception that they worked closely with both the British government and the cable companies to spy on US competitors, see Joseph S. Tulchin, The Aftermath of War: World War I and US policy toward Latin America (New York, 1971), pp. 33-35.


Thomson-Houston and Hotpoint. John I. Thornycroft established a

subsidiary in Buenos Aires in 1930; besides handling Thornycroft's own

products, it also worked for Scammell (motor vehicles) and Lewis Berger

(paints).70 This suggests that several leading companies of the time shared the

view of the FBI representative who commented in 1923, 'As the [Argentine]

market is so highly competitive, one can be assured that should the agent not

be exerting his best efforts, business will soon be lost to competitors'.71 Once

lost, it was extremely difficult to recover without heavy advertising to re-

establish the brand.

The approach of the traditional import merchants, who dominated the

membership of the British Chamber of Commerce in Buenos Aires, suggests

that they had little sense of how to deal with the challenges. They appear to

have been unable to cope either with the growth of a modern consumer society

or with rivalry from traders of other nationalities. When Crosse & Blackwell,

for example, a well-known British foods firm of the mid-twentieth century,

began to manufacture preserves in Argentina in 1929, it employed a French

agent for local distribution.72 Atkinsons, the Unilever subsidiary that

specialised in perfumes and toiletries, also made use of a non-British house,

Mayon, which had close contacts with the specialist retailers and represented

US companies like Kolynos as well. Lawrence Heyworth, visiting Argentina in

1936, claimed that he had travelled over 2000 miles and found Atkinsons'

products everywhere due to the efforts of Mayon.73 However, it was not only

specialised European intermediaries that undermined the traditional British

merchants. In contrast to the attitude of firms like Levers, Reckitts, and J. &

P. Coats, whose response to the spread of turco traders was to find ways of

70 British Society in the Argentine Republic, Year Book 1937 (Buenos Aires 1937), pp.

161 and 203.

71 'FBI Mission to South America, 1923-24: Report by Mr A.C. Rouse', p. 11, MSS.200/F/4/39/1, FBI archive.

72 BCCA, Monthly Journal 9: 5 (February 1929), p. 20.

73 Unilever, Visit Report, J.L. Heyworth, Argentina, April 1936', supplement p. 5, OSF 1/9. Even in this case, though, the business eventually became so large and conflicts of interest too great, with the result that Atkinsons terminated their contract with Mayon at the end of 1941 and formed their own sales organisation, taking advantage of Levers' experience: Unilever, Visit Report, J.L. Heyworth and E. Quin, J. & E. Atkinson Limitada, Buenos Aires, March 1942', p. 1, OSF 1/16.


working through them, the British merchants simply complained about the

intrusion into their domain. 'The Turkish importer is a man of little education

and less morality', one of the British Chamber's sub-committees complained

in 1917. 'He will, by various sharp practices, lower the prestige of British

goods. The Turkish importers work with virtually no establishment expenses

and evade the Argentine charges which established houses have to pay. Owing

to their mode of living they also cut prices to such an extent that established

British houses have to sell at a loss in order to compete.'74

The British merchant houses in Argentina thus felt squeezed by the

appearance of cheaper competitors and the opening of sales subsidiaries and

factories by British manufacturing companies. Their representatives

complained loudly about the way in which British industrial companies

deserted the importers who had served them well. 'Cases have been brought to

the Chamber's notice', the annual report of the British Chamber of Commerce

remarked in 1927, 'where local representatives of British firms, after having

worked up a good business for their Principals, have suddenly been deprived

of the agency and consequent income, without compensation, owing to the

firm having decided to open a branch here'.75 However, such comments

simply blamed others for the inadequacies of the merchants in dealing with

modern consumer markets and Argentine industrial growth. This even

incurred criticism from within the Chamber. The editor of the Monthly

Journal, presumably the Chamber's Secretary, complained in 1928 about the

attitudes of British importers and their attachment to old methods of trading.

'It seems reasonable to argue that merchants handling imported articles in

competition with similar articles of domestic manufacture', he stated, 'would

show more wisdom and courage if, instead of assuming the role of cheerful

martyrdom with the resolve to go on fighting to the bitter end, they would turn

round and reason out the question of whether or not this apparently adverse

74 Memorandum from Textile Committee [March 1917], Council Minutes, Book 1,

BCCA archive. The information on Coats comes from David Keir's unpublished history of Coats, p. 146, J. & P. Coats archive, Scottish Business Records Centre, University of Glasgow.

75 BCCA, Annual Report, 1926-1927, p. 8, BCCA archive. As indicated above, however, the merchants' perception of what constituted 'a good business' may have been rather different from that of the multinationals.


circumstance could be turned to positive advantage'.76 What he meant was

that they should consider working with, perhaps even investing in, Argentine

companies. However, such criticisms evoked little response. Nor did the

editor's subtle but perceptive comment in March 1932 that men who did not

go shopping did not appreciate the penetration of national industry in the way

that women did. The example he provided was that of nail varnish, where the

imported product that used to cost $1.70 had been substituted by a locally

manufactured version at $0.70. It was important for his members to realise,

he added, that locally produced goods were being sold at a price that reflected

the cost of production rather than that of competing imports.77

Whether the myopic reaction of British trading firms in Buenos Aires to the

development of new consumer markets was typical of their counterparts

elsewhere in Latin America is difficult to say. The FBI representative who

visited Brazil in 1923 criticised the merchants in Brazil for handling too many

lines and added: 'They are inclined to consider, rightly or wrongly, that it is

not worth their while to go to trouble and expense in pushing new lines'.78

However, he also noted that the British merchants there were 'being gradually

forced to deal more and more in locally-manufactured products', though his

use of the word 'forced' suggests that perhaps there was a certain reluctance to

make the transition.79 Nonetheless, the British Chamber of Commerce in São

Paulo, at least, seems not to have exhibited the stubborn resistance to the

establishment of local industry and investment in factories by British firms

that the Buenos Aires houses did.80 Wilson Sons & Co., whom Levers had

76 BCCA, Monthly Journal 8: 5 (February 1928), p. 17, BCCA archive.

77 BCCA, Monthly Journal 12: 6 (March 1932), p. 30, BCCA archive.



80 The struggle of a minority within the British Chamber of Commerce in Buenos Aires to form a local industries sub-committee is detailed in Paul B. Goodwin, 'Anglo-Argentine Commercial Relations, 1922-1943: a private sector view', Hispanic American Historical Review 61 (1981), 29-51. This contrasts with the attitude of the São Paulo Chamber whose council contained several industrial members and which began actively to attract the attention of British manufacturing companies to the possibilities of investment in Brazil: Minutes of Council of the British Chamber of Commerce of Sao Paulo and Southern Brazil, 13 December 1951, BCCB archive. At this time there were separate British chambers of commerce in Rio de Janeiro and São Paulo.


ultimately rejected as their agents in Brazil due to their lack of dynamism,

established several manufacturing enterprises there and in Argentina,

especially after the Second World War. A number of merchant firms on the

west coast, first Graham Rowe and Weir Scott and later Duncan Fox and

Antony Gibbs & Sons, also seem to have been more forward looking and

involved themselves in local manufacture in response to the closure of Chilean

markets to imports in the 1920s and 1930s.81 However, ventures of this kind

were on a much smaller scale than those of the major British consumer goods

manufacturers, and they generally did not deal in branded goods, with all the

marketing expertise and expenditure that entailed. Levers rejected overtures

from both Graham Rowe and Duncan Fox to establish joint ventures in Peru

and Chile.82 British merchants in Latin America continued to incur criticism

after the war. Officials in Venezuela in 1947 commented on 'the virtual

blanketing of the advertising world by the Americans', and complained that

'our merchants do not seem to be able to allocate cash for advertising'.83 This

comment was reiterated, for the region as a whole, in a Board of Trade paper

in 1949 which listed, amongst other obstacles to British trade in Latin

America, the unwillingness or inability of British merchants to spend on

advertising and sales development.84

It is difficult to escape the conclusion that British merchant firms were

unable to handle the demands of modern consumer industries which required

advanced advertising and selling techniques to promote a brand, as well as

paying close attention to the changing demands and price and style

consciousness of the female consumer. The merchants largely inhabited a

male world. When they did develop their own manufacturing interests, goods

like paint or iron founding seem to have been more attractive to them than

products bought principally by women, like household goods, foodstuffs, or

toiletries and cosmetics. The fact that by the end of the 1950s firms like Gibbs

81 Cavendish-Bentinck (Santiago) to Hoare (Foreign Secretary), 17 August 1935, FO

371/18697/A7521/1536/51.

82 Greenhill & Miller, 'British Trading Companies', p. 112.

83 Ogilvie-Forbes (Caracas) to Shuckburgh (Foreign Office), 4 July 1947, FO 371/61396/AS4400/4400/51.

84 Board of Trade paper for Cabinet Committee on Exports to Dollar Account Countries in Central and South America, 20 October 1949, FO371/74915/AS6248.


on the west coast, Agar Cross in Argentina, and Norton Megaw in Brazil had

come largely to depend on selling machinery and acting as intermediaries for

defence and engineering contracts perhaps underlines the way in which they

tended to inhabit a masculine world.85

Conclusions

The evidence presented in this paper suggests a number of conclusions about

the growth of consumer markets in Latin America and the capacity of British

businessmen to respond to the opportunities they offered. However, these

conclusions are tentative. Consumption and marketing are subjects that are

only just being broached by historians of Latin America. The development of

advertising, the media, and retail distribution networks in the region are ripe

for historical research. Recognition of the gendered nature of consumption,

whether of consumer goods or of services like radio and television, is

potentially an important part of this. For at least some topics sources parallel

to those used in developed countries are readily available. It would be

possible, for example, to use the women's press to investigate the development

of consumerism and advertising techniques in countries like Argentina just as

Eduardo Archetti has used men's magazines such as El Gráfico to research the

interconnections between the development of football and Argentine

masculine identity.86

Patterns of consumption in early twentieth-century Latin America were

undergoing enormous change. The growth of 'national' industries, under the

impact of protection, exchange depreciation, and other forms of deliberate

and inadvertent incentive, was directed first at markets for consumer non-

durable goods, though by the 1930s local production of consumer durables

was advancing rapidly. One peculiarity of Latin American markets, it has been

claimed, was the 'allure of the foreign', meaning that elite and middle class

85 'Gibbs & Co., Chile' and 'T.W. Peddar's Report on Peru Business, 23 April 1961',

contained in Memoranda etc of Discussions on Chile and Peru, 1961, MS 16878, Gibbs' archive, Guildhall Library, London; Bank of London and South America, 'Cooper Brothers Report to Sir George Bolton on Norton, Megaw & Co. Ltd. (23 June 1961)', file 4412, BOLSA archive, Lloyds Bank, London.

86 Eduardo P. Archetti, 'Estilo y virtudes masculinas en El Gráfico: la creación del imaginario del fútbol argentino', Desarrollo Económico 35: 139 (1995), 419-441.


cultures gave primacy to the consumption of goods and services that were, or

appeared to be, of foreign origin.87 However, it is important not to

overemphasise imports, since local entrepreneurs in sectors such as brewing,

foodstuffs, or tobacco often depended as much on the development of brands,

advertising, and new methods of distribution as the foreign companies that

entered Latin America.88 Technology — in the form of the modernisation of

the media, communications, and transport — was a vital component of this

process of westernisation, especially since radio and the cinema could

overcome the barrier of illiteracy. Moreover, markets became increasingly

segmented. People in the rapidly growing cities adopted western styles of

consumerism much more quickly than those in the countryside; in rural areas

men adopted new habits and tastes more quickly than women. In urban

areas, however, women probably espoused changing consumption patterns

and lifestyles just as quickly as men. This is evident from the appearance of a

dedicated press, the audience for radio and the cinema, the increasing use of

labour-saving devices in the home, and the changes in shopping habits that

occurred.89 However, this is an area where research is in its infancy. Much

remains to be discovered about changes in household organisation and

expenditure patterns and shopping behaviour in the early twentieth century.

How did British businessmen react to the growth of consumerism? There

are clear differences between different industries and types of firms. The

focus here on peripheral and culturally distinct markets highlights the

strengths of firms like Levers and Reckitts in strategic management and

control, financial planning, marketing, and product development, in contrast

to the weaknesses of the long established British commercial community in

South America. In some manufacturing activities British businessmen

87 Benjamin Orlove & Arnold J. Bauer, 'Giving Importance to Imports', in Orlove

(ed.), The Allure of the Foreign, pp. 12-16.

88 Despite his emphasis on food, clothing, and shelter Bauer does not mention advertising and brands until his final chapter on the neoliberal period, apparently overlooking their importance in the early part of the century: Bauer, Goods, Power, and History.

89 Both Rocchi, on the development of consumerism in Argentina, and Woodard, on J. Walter Thompson in Brazil, emphasise the extent to which manufacturers and advertisers directed their appeal to the female market: see Rocchi, 'Consumir es un placer', 545 and 552-555; Woodard, 'Marketing Modernity', 270 and 275.


developed competitive multinational firms on the basis of brands which

became recognisable at the national or, increasingly, the global level. To

Levers and Reckitts one might add British American Tobacco (BAT), with its

highly successful Sousa Cruz subsidiary in Brazil, and The Columbia

Gramophone Company (from 1931 part of EMI), which manufactured records

catering to local taste in both Argentina and Brazil following its purchase of

the German Lindström Group in 1925.90 The development of ethical

pharmaceuticals was also an area in which British firms achieved global

success in the second half of the twentieth century, on the basis of the earlier

expansion of firms like Beecham and Glaxo. But in other areas of

consumerism the British were noticeably unsuccessful: in confectionery, for

example, where British chocolate firms were unable to compete with Swiss or

US manufacturers; in household electrical appliances (much of the British

electrical trade with Latin America was in machinery); or in automobiles,

where there was a long history of disastrous British attempts to establish sales

and manufacturing operations in Latin America. Some of these stories need

much more exploration, from the point of view of the consumer's

unwillingness to purchase British products as much as from the lack of

manufacturing and marketing competence which many British industrial

firms displayed in culturally alien environments.

Those industrial enterprises which did succeed in meeting the demands of

Latin American consumer markets did so largely on the back of firm-specific

experience and skills which they then carefully adapted to local conditions.

They recognised the need for investment in their brands, for advertising

expenditure utilising the media most appropriate to their target markets, and

for the development of a capable sales force. But the changes in consumer

demand and behaviour added a further nail in the coffin of the British trading

companies. The existing merchants could offer little expertise of this kind,

except perhaps for some warehousing and distribution facilities in the early

stages of growth. The traditional merchants failed to understand modern

consumerism and the importance of protecting and developing brands.

Frequently they possessed neither the financial resources nor the

90 Geoffrey Jones, 'The Gramophone Company: an Anglo-American multinational',

Business History Review 59 (1985), pp. 97-98.


management skills to do so. It is noticeable that Unilever rejected all the

attempts of west-coast merchants to interest them in manufacturing in Chile

and Peru before the Second World War. In part this was because the markets

were too small to carry the overheads that even a small Levers factory

incurred, but it was also because the merchants had little to offer them: apart

from their experience in developing and manufacturing new products Levers

were far ahead in terms of strategic planning, project management,

marketing, and accounting techniques. When Levers did enter these countries

in the 1950s it was in joint ventures, not with the established British

merchants, but with local trading houses like the Edwards in Chile and

Ferreyros in Peru, firms which possessed good distribution networks and the

access to local financial and political circles that British trading houses lacked.

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