Legally, butter must contain at least 80% fat (all of which must be pure milkfat) and a maximum of 16% water. As a consequence of these legal restrictions, there has been a reluctance for the dairy industry to blend oils with milkfat since products like this cannot be termed as butter. However, in recent times there has been some interest in the mixing of milkfat and vegetable oils for dairy spreads. An example of this type of product is "Bregott" made from an 80:20 milkfat: oil mix (Anon, 1969) manufactured in Sweden and claimed to have superior spreading properties over normal butter. The blending of milkfat and oil for reasons other than improving spreadability has not been extensively researched. It would seem advantageous to incorporate milkfat into cake and pastry margarine to enhance the flavour of the end products, although the high cost of milkfat in some countries may prevent this from becoming commercially feasible. In New Zealand, milkfat is relatively cheap and it may be possible to produce a cake or pastry margarine containing a significant amount of milkfat at a competitive price. This type of product could capture a segment of the commercial baking industry which is at present monopolised.