IIRC, some U.S. states (Wisconsin might have been one) had similar laws. The margarine companies used the workaround of including a separate food coloring packet, which the customer could mix in at home.
It's not about defrauding anyone in this case: Margarine looks disgusting without added colour. Even if you prefer margarine or have made a fully informed choice you might still very well prefer to add colour to it before using it.
The reason for laws restricting colour additions to margarine was explicitly because it is sufficiently close to butter in taste, texture and usage that it created a substantial competitive pressure on butter sales because people would happily pick margarine over butter to save money. So much so that the separate coloring failed to stem the growing demand.
