Rise In Sugar Price To Be Met By Subsidy

Chronicle (Levin), 10 April 1948, Page 4

Rise In Sugar Price To Be Met By Subsidy

Press Associationj

. (Per J

WELLINGTON, April 9. In a reserved judgment delivercd today the Price Tribunal granted permission to the Golonial »Sugar Kelining Company Ltd., to increase the price of ripened 1A sugar by £4 2s (5d a ton. As the Government has informed the Tribunal that in respect of the sale of sugar for domestie use only it inteinls to meet the increased cost by way of subsidy there -will be -no increase in the retail price to the domestie user. The Tribunal was of opinion, stated the judgment, that the company shouhl be allowed the same margin as was established under the agreement between the Government and -the (-.ompany in 1942 which. returned. the company a prolit of 5 per cent. after tax on the shareholders-' funds — -namely £2 5s a ton which the Tribunaf eonsidered a reasonable return. The ncvv price would mean that the company would be required to absorb increased costs of 13s 4d a ton. "Without taking into consideration the company 's overall finaneial posi:* tion and the fact .that its reserves increased from £5, 308, 000 in 1939 to £9,457,000 in 1947, the Tribunal is ot opinion that in the case of a company such as this with a nationwide fiemand for an essential eonimoditv and no eompetitor and no competition, its position is analgous to that of a publie utilitv and that a return of 5 per cent. tax paid on its shareholders' funas employed in New Zealand is a reasonable return under the present condition," stated the judgment. The Tribunal agrees that inereases in the prices of golden syrup and treaele eorresponding to.anv increase in the price of sup'ST sironld Ra nllnwpd.