Wholesale Distribution of Farm Products

Chronicle (Levin), 13 September 1946, Page 7

Wholesale Distribution of Farm Products

A statement eovering the formation of the new company known as Earm Products Co-op., Wellington, Limited, which took over Combined Distributors Limited for the handling of the wholesale ; distribution of a million pounds worth of foodstuffs, * was released for the first time publicly at the annual meeting of shareholders of the Kairanga Co-operative Dairy Compaliy Limited in Palmerston Xorth yesterday.

The information had becn prepared by Mr. P. B. Deamond, secretary of ALanawatu Co-oi). Farm Products, Ltd., which is one of the constituent eompanies of the new eoinbine, and was presented by the chairman of the ineeting, Mr. W. W. Cruden. The statement was as follows: — ; ' ' For some years those dairy companies whieli pupply butter to the Wellington city market have bene endeav* ouring to obtain tlie wholesale marketing rights for their produce. Prior to the w,ar the wholesale distribution of butter and eggs in Wellington city area was in the hands of eight merchants and the Internal Marketing Division. The marchant interests had about twothirds of the business and the balance was held by the 'Internal Marketing Division, tliis business' having '• beep aqquirod by the Government in . 1938 iroiii .Picot Bros. "... '• "In December, 1U4I, .th,e eight merchants and the Goyern*ment fo'rmed themselves into one organisafioii kno'wn as Combined Distributors,- Ltd. This combination of business intbrests held the solq distribution of butter and eggs for Wellington city, and it also handled .other lines sucli as milk powder, ch'eese, egg pulp and also had an o.xcellent serv.ice arrangement with Ihe Kiwi.Bacon Oompauy, Ltd. . " "The saies turnover of Combined Distributors, Ltd., • prior to butter rationing was over £1,000,000 per aiinun). The 30 butter eompanies . in Wellington and Hawke's Bay negotiated for three years with thc.GQver.nment for the purchase of - its one-third share of this business and were prepared to purchase the building in Wellington known as Pieot's Building aud butter patting plant, etc., at an estimated cost of £50,000. j "However, a dift'erent and better arrangement was made by mutual agreeinent with the eight merchants and tho Governmont, and whereby the whole of the business of Combined Distributors, Ltd., hus been t^ken over for the benelit of the producers to whom it rightly belongs. "The brief particulars of the details of this transaction are illuminating because, instead of having to pay £50,000 for one-third of the business, the pro- . dncers (represented by the Dominion Producers' Oo-op. Agency, Ltd.) have to find only £27,250 for the whole of the business and for the whole of the profits therefrom. In addition to the trading

surpluses from the business, which averaged £10,000. per annum, the butter eompanies have acquired from the Internal Marketing Division the butter patting department at Tliorndon. "The Government- laid down the condition that they were not prepared to hand over to producers a complete monopoiy of the wholesale distribution of a million pounds of.foodstuifs without some protection toythe eonsuming public, and as democratic representatives of the people, it was agreed byj the producers that the Goverainent were right in that respeet. Aeeordingly the following arrangements were made: — ; 1. That a new company b'c formed known as Farm Products Co'-op., Wellington, Limited, to take over Combined ;Distributors, Limited. . ' 2. That 'the capital be Tound 50 per cent. by the . Govefnment and 50 per :cent.- by the producers. . r- 3. The Government hobls 3100 shares ^and thp. Dominion Producers' Co-op. . Agency, Limited, 3100 shares. The i shares aro £1 each. The directors of •the Wellington company are five Government nominees and iive- producer | nominees with equal i'ootiiig, but no '• caating vote. „ 4. . ;A11 of the net trading surplus^ earned by the company will be rebated j to the; producers. through their holdiug: cpmpany, the Dominion Producers' Co- [ op. Agency, Limited. i > ■5. The Wellington company is free of any. political intcrference, directious or vote. - "As .the Wellington company holds ai sole distribution licence for eggs, pro-j visioh'is being made to link up with the j Wellington market all of the co-opera- , tive egg-produeer eompanies now asso- ! ciated' with the different farm products eompanies in Hawke's Bay, Wanganui, Manawatu, Nelson and Canterbury. ■ "Thus, it will be scen that the poul- [ try farmers and other kindred pro- ■ ducers of farm products will benelit ( a,long with the dairy producers in i taking part in this growing organisa- • tion for the co-operative selling ot" their j own goods. ' ' j