THE MEAT TRADE

Dominion, Volume 9, Issue 2833, 26 July 1916, Page 8

THE MEAT TRADE

POSITION UNSATISFACTORY ALLEGED SPECULATIVE PROFIT PRIME MINISTER'S STATEMENT CONTROLLING COMMITTEE CRITICISED The position of New Zealand . meat upon tho market at JTnme was recently raised in (lie House of Representatives by 11 r. G. Witty, and in answering him, the Bight Hon. W. V. -Massey, Prime Minister, promised to make a full statement. This statement ho produced yesterday iii the form of a paper, which ho moved should be" printed and circulated. The statement was as follows:— "Beef.—Except the small proportion which is of inferior quality is utilised for feeding the Army. "Mutton.—ln August. 1015. the ( High Commissioner cabled that the Goveru.ment was then holding ail wethers (and presumably maiden ewes also) for feeding the Army. For. some time past, however. New Zealand mutton has been regularly ((noted on the Smithfield market. Evidently only a portion of our mutton supplies is so sold, the balance being used for the troops. The proportion utilised for Army purposes is not known, but the quantity placed upon the market is only small, .Is is shown by an extract from a letter from Sir Thomas Robinson to tho High Commissioner.-on May 23, reading as follows:—

" 'The quantity of New Zealand meat which it is possible to release for civil consumplion has now been reduced to such small proportions that its scarcity on the market is very noticeable, more particularly so during the period when supplies from Ireland have been unobtainable.' . "Lamb —All lamb is utilised by tho' Imperial Government for the purpose of sale for consumption by tho civil population. Tho quantity placed on the market daily is controlled by the authorities, and large quantities are held in store. - Sales and Selling Prices. "The system under which our meat is sold in England is as follows:—Such meat as is liberated for rale by tho Hoard of Trade is sold by agents nominated by the shippers here, who must be approved and accredited by the British Board of Trade. They sell to wholesale merchants who must sell direct to retailers, dealing being_ forbidden. ''Tho High Commissioner's last cabled report, dated July 15, quotes Now Zealand mutton at B|d. per lb; New Zealand ewe mutton at Rid. per lb.; NewZealand lamb at 9Jd. per lb. The f.o.b. prices paid in New Zealand for these classes of meat are:—Mutton, 4Sd. per lb.; ewe mutton, id. per lb.; lamb (Canterbury). 52d. per lb. > "To these f.o.b. prices must be added the charges incurred before the meat can bo realised on by the Imperial authorities. The exact amount k of London charges caunot be ascertained, but it is, considered that, including a reasonable estimato of these, it costs the Imperial Government at least. 2.M. • per lb and probably 2 S M per lb. additional to tho f.o.b. prices here, before tho meat can be realised on. Taking tho lowest estimate of !>Jd„ the figures .work out as follow:—

Market . ,' . I'™co Profit r.o.b price. m made by .. plus charges England Imperial mp. (JnlylS). Govt. Mutton .... 7 s| j t Ewe mutton G.( - g\ jj Lamb si fll "Tht>s,_on a-86lb. lamb, „ pro tit of * 3 - .W- 1S shown in favour of the Imperial Government. But it must be remembered that the supply of i\ow Zoaand meat on the market is now very limited, and this has tended to brine about abnormal market conditions,. h Some Losses Made. /'lt must pot bo thought, that tlio margin of profit mVdo by the Imperial Goternmeat on its wholesale sales lias been at this level throughout. Last jw, for the months of September and October it was estimated that after allowing all charges the sales in London showed the the following results:— Ewo l^ m b Mutton, mutton. (Canterbury) ~ per lb. perlb. per lb n°„? t £? ber M- proflt Sd - loss W- loss October id. profit Id. loss MM bss Since January 1 of this year tlio estimated average profits made by the Government s sales are ns follows:— ' I ' ,c ?- Apl. 3r«.v. June. button 9-16' 5-8 11-16 7-8 1 I*s a Ewe mutton ~. 3-8 5-8 33-16 1 me 13 5 Lanlb M 6» 5-16 11-16 5-8- 13-16 13<«T.l n hOSa - These figures are arrived at by taking the top weekly quotations for each class of meat and taking the average of these ior each month. ."Taking the transaction as a whole Hie present position of the Imperial Government on the point of profit and loss 13 shown in the following extract £ 0 V Sl ! - J hofflns Vinson's letter to tne Jtiigli Commissioner on May 23:—

~ -There-is grave doubt as to whether the prices which have been realised up to tho present time have been sufficient to cover the actual cost and expenses, and upon the figures which can, at this stage, bo mndo available, it is not possible io satisfy the Board of Trade that they will avoid a loss when the final balance can be made up.' ■" Retail Prices. "Apart from the sales by the Imperial Government, the question of retail prices in England has been raised This is one over which tho New Zealand Government naturally has no control but.realising that it was at tho same timo-. one for serious consideration by this Government, tho High Commissioner was communicated with early in the present month, and communications on the subject aro still passing. At present retail prices in England are on a high basis, and this appears to bo due to four causes, viz:—

"(1) Tho small quantitj- of New Zealand meat being placed on the market. "(2,1 The almo'st total absence of supplies from Australia, consequent upon the drought. "(3) The fact that Argentine meat is free from control by tho British •Government. (I) Ji'dbrts at economy (apparently misplaced) on the part of consumers in purchasing frozen meat instead of British, and thereby increasing the demand for it. "As a result, retail prices all round are at a higher level than should be the case, and while British-jfrown meat is still _ by far the most costly,' wholesale prices for Argentine mutton and lamb have of late risen considerably above those for New Zealand mutton and lamb, the demand being so keen in May and June that importers from tho Argentine aro said to have been able to eret whatever prices they asked. The fact of Government-controlled New Zealand meat selling at a considerably lower figure would not ho unreasonable' if the consumers in Circnt Britain were receiving the benefit of it. but they do not, and instead, (Uo retailers, having (o pay high prices for Argon)ine meat, balance things nn by Hlinr the cheaper, though belter, New Zealand meat at high retail prices. "It lias bepn suggested that speculation in New Zealand meat after its sal" on behalf of the Home Government and boforo it gets into the hands of the retailers, is largely responsible for tn» present nosilion. No evidence in proof of Hi'* is available, but careful inquiry is stiil being made. Improvement Hoped For. "It must be borne in mind, that il is only on a comparatively small proportion of the whole of our export meal: that these large retail profits are now being made, and were the British Government able to releaso larger quantities for «nle daily the position would be eased. But we maj bo sure that tho holding

in. storo of large quantities is done with good reason. Another factor operating is the fact that largo stocks of meat are still in storo in the Dominion awniting shipment. Were our meat arriving in England more freely the market would be adjusted if the Government liberated more for sale as it no doubt would do under such circumstances. But tho best possible is being done with the ships available, and uio position as affecting New Zealand irom a shipping standpoint is as good as could be expected under existing war conditions. When all the facts are taken into consideration, and due regard given to the practical difficulties existing," the present position as regards marketing conditions in England cannot be regarded -as being in any way satisfactory, and at the beginning of the perseut mouth the Government, as already stated, communicated with the High Commissioner over the whole question, and communications arc still passing, the High Commissioner being also in communication with (ho british Board of Trade. It is hoped that this action, already initiated,' will result in the matter being placed un an altered basis,-one fair to both producer and consumer, and calculated to operate (o the best advantage of both the the Mother Country and the Dominion."

Belief Expected. In answering an interjection, Mr. Massey said that the special sub-eommitt.ee appointed by the Board of Trade to deal with the meat trade was composed bv Sir Thomas .Mackenzie, Sir Thomas- Robinsou, late Attorney-General for queensland, and Sir Montagu Nelson. lie expected, .ho added, that the wholo of tho •iwsat now in 'store in New Zealand would be cleared out before Ihe new season, with tho exception, possibly, of 500,000 carcasses. Ho thought at present that tho producers were getting a. lair and reason-, able price for their .meat, but there was the feeling that while we had no objection to the Imperial Board of Trade, making a profit, we did object to the retailer making what appeared to be tho large profit he had been able to make out of the New Zealand producer. The wholesaler was limited to one halfpenny per lb., but the retailer was practically lreo to get the highest price he could. Communications were still passing on tho subject, and ho hoped in tho not far distant future lo have an opportunity of looking into the matter. The present position was not satisfactory, mid lie. hoped a batter arrangement would be wade. (Hear, hear.; The New Zealand Consumer. Mr. Witty (Riccarton) thanked tho Prime Minister for bringing down this report, which would relievo the minds of many peoplo in Now Zealand. At (lie same time ho wanted to know what became of the profit Which was made by the Board of Trade. Mr. Massey: That is held by the Imperial Government. i Mr. 'Witty went on to say that this money should lie held for the benefit of tho New Zealand Government. We were content to supply Britain for tho benefit of her troops, but when it cunio to tho civil population our own peoplo should have first. call. Consumers "hero were paying enormous prices for our lamb, and yet the producer was not benefiting— it was the middleman. The people here, he contended, should be offered tho meat which was not required at Home at the same price as was paid for it on the homestead. This would go far to reduce the cost of living. The Speculator Condemned. Mr. G. A 7. Pcarcc (Patea) said he was surprised that tho last speaker had not 6een where the big leakage was. He was of the opinion that some speculators in Britain were getting the big profits which were being made. In June last our lamb was quoted at Sljlb. per lb., as against Is. for Argentine lamb. jNow our meat was betttr than theirs, and the speculator was buying our meat at 3d. iper lb. less than it was worth wholesale, and selling it at the full price to tho consumer. This was what he objected to, and what should be stopped. Tlie farmer did not mind either tho New Zealand or Imperial Governments making a profit out of the meat, but did object to the speculator doing so. Mr. Pearee, commenting on the composition of tho Board of Trade nub-com-mittee, said that Sir Montagu Nelson was largely interested in retail soiling businesses throughout England, whilo Sir T. Robinson was the representative- of the American Meat Trust. Yet this sub-committee fixed tho price for the sale of Now Zealand-meat. He contended that during the last year the farmers of New Zealand had made a gift to somebody of tho.equivalent of 2,000,0001b. of meat. ' Ho hoped the. Prime Minister would act quickly in finding out how the speculator was exploiting the producer, and stop it. The agent who sold the moat in London received a halfpenny a pound for doing so, and this was doublo what was paid before the war began. Mr. AV. Nosworthy (Ashburton) said that the paper proved what had been suspected by the fanners of tho country. When tho Prime Minister goi Home he would find himself up against a tremendous proposition in the meat monopoly. He thought it was high time that the sub. committee of three should be replaced by others as in two cases they were interested parties. . Probably the New Zealand farmer had been robbed of .£1,000,009, and tho Prime Minister should certainly look into this matter and check it.

■ Mr. J. Payne (Grey Lynn ) held thnt the Government here should establish prices for- stock, and also that the farmer here should supply the public of New Zealand at prices not more than those ruling in London. Air. J. Colvin (Buller) argued that the New Zealand farmers had small ground for complaint, as they were getting good prices. A Change Desired, Mr. E. Newman (Rangitikei) commend, cd the remarks of the member for Patea as being u very clear expression or the views held by the majority of the farmers. Those mi'-n objected to speculators making profits where they would not object to either of the Governments making profits. He believed that Sir Thomas Mac-' kenzie acted well for tho Dominion, but ho was not satisfied with the other two representatives, and could not admit that it was right.for men who were commercially interested i>o be engaged in the regulation of the sale of New Zealand meat. He had on various occasions endeavoured to get an insight into the u-orkijigg of the Smithfteld Market, but it was tho hardest thing lo investigate he ever struck. Sir Walter Buchanan had also tried and failed, and if the Prime Minister could succeed he would be conferring a great benefit.upon the country. He sincerely hoped tho, constitution of the sub-committee would be altered. Prime Minister in Reply. The Prime Minister,.in reply,,said that he had given n great deal of time to watching ,what took place on the London market. A reflection by the member for Patea upon Sir Montagu Nelson and Sir Thomas Robinson should not be allowed to go forth unanswered, It had been suggested that they were using their position tor their own commercial advantage, and to settle this point he had cabled directly to Sir Thomas Mackenzie asking him specially upon the point. Tho reply was that thoy were not doing so, and that it was not possible for them to do so. The allegation that huge profits were being made was hardly correct, for Ho profit at all had been m'ado until the present year. He had been told that tho. present arrangements in regard to Argentine meat coubl not ba interfered with, because tho Army contracts would be interfered with if that were done. Ho had a confidential communication from a man in England who knew as much about t.bo inside position of tho market as anyono, and he would quoto a few words from his letter. This stated:—"ln reference to the present high price of meat in London, tho retail butchers, instead of keeping away from the Argentine supplies and su forcing prices down, are swarming after the sellers, and "buying at; high prices, and to recoup themselves thoy have forced up the prices of Australian and New Zealand meat, which tlicv oblain at moderate prices from the wholesalo salesmen. |. am satisfied that there is no form of combination at present, as there is no need for it. The existing economic conditions at the moment make 'a ring' of themselves."

"la other words." said Jlv. Jla.sscy, "tho market is no! gelling-the meat it wants, and consequently during the hist low months Iho prices of our meat have goim up. If it lad not been fur the arrangement mado with the Imperial authorities it would Lave boon absolutely impossiblo for us to get, our meat away during the war period. .(Hoar, hear.) At the same time, I am not. satisfied with tho position of things, and will do my best to bring about a better arrangement."