Unilever Canada finally got its day in court Monday to argue against a Quebec law that bans margarine producers from making their product the same colour as butter.

Gerald Tremblay, a lawyer for Unilever, argued in court that the law is discriminatory and contravenes trade law.

"There is no doubt that colouration of margarine as enforced in Quebec constitutes an obstacle to trade," he told Quebec Court of Appeal.

Quebec is the only jurisdiction in Canada where yellow margarine is banned. The province, which is backed by the $1.7-billion milk industry, says it the law protects its large dairy industry.

The argument is that if margarine resembles butter, it will take the market share from butter because it is about half the price.

Guylaine Gosselin of the Quebec Milk Producers Association, says they don't mind if margarine is coloured, as long as it isn't the same colour as butter.

She said that since Ontario allowed yellow margarine in 1994, butter sales in the province have dropped by seven per cent while in Quebec, butter sales have increase by six per cent in the same period.

In court Monday, Tremblay argued it costs Unilever $1 million a year to keep two inventories -- one of yellow margarine and one of cream-coloured margarine for Quebec stores.

He also says that since the Quebec government has passed laws sanctioning international and interprovincial trade agreements, it is inconsistent and illegal to make exceptions.

Unilever is appealing a Quebec Superior Court ruling of 1998 that dismissed the government's argument that the colour ban is necessary to prevent consumer confusion. The court also ruled that the regulation was solely designed to protect the butter industry.

However, Unilever lost on its major argument that the regulations violated the constitution and interprovincial and international trade agreements -- which is the same argument they are putting forth again.

Unilever, based in London and Rotterdam, specializes in food and household cleaning products. Its Canadian margarine brands include Becel, Monarch and Fleishmann's.