MILK PROFITS

Dominion, Volume 9, Issue 2854, 19 August 1916, Page 2

MILK PROFITS

THAT EXTRA PENNY BOARD OF TRADE REPORT ( Aji interim report by the Board of Trade regarding t/he retail selling price of .milk in Wellington has been received by the Mayor (Mr. J. P. Luke) from the Prime Minister (Right Hon. "W. i\ Massey). ' 'lie' finding! of the board is, briefly, that the present price of 6d. per quart was justifiable for. three out of tho five months, April to August (inclusive), but should have been reduced to.sd. during two of these months. .... The report states that the board examined representatives of the City , Council, Trades and Labour Council, Wellington Dairy Farmers' Association, tho executive and some members of tho Milk Vendors' Association, and the vendors outside tho . association. Also it lad before it numerous documents and balance-sheets. Not being yet prepared to pronounce an opinion on many of the questions raised during the inquiry, tho board confines itself in the report to the question of whether .the • milk vendors were justified in charging' tho public Bd. per' gallon more for milk during April, May, June, and July than in January and February, when the wholesale price to them had been advanced by sd. In January and February the landed cost of milk in Wellington to the vendor was Bd. per gallon, and the retail prico in quanti- , ties of less than a gallon was'ls.' 4d., . or 4d. per quart. The board announces ] that these prices wero reasonable. In , April the landed cost was advanced . to Is. Id., and the retail price to 25., , or 6d. per quart. The board ascertained , under tho following heads the cost of , distribution for the large vendors, int eluding an allowance for management: L (a) Wages and management; (b) stab- [ l>ng; (c) rent and rates; (d) bad debts ; . (e) trade expenses; (f) depreciation; > (g) repairs; (h) fuel and light; (e) in- , come-tai and insurance. ,' "The board," the report continues, . "is of opinion that 6}d. may be taken . as fairly "tost of dis-' s tribution. .To this should be added an , amount to cover loss" of milk in disti'i- . bution and pasteurisation when necessary. No witness stated these.:two' t items as more than 10 per cent. "In the oase of the 'one-man' business 'the | vendor draws the wages allowed .in , addition to the profit per gallon. '■ ■ A k comparison of January prices with April , prices is therefore as follow:— ••'. ■■-'< i Jan. April, d. I . I Landed cost ..-..:.. Bd.. 13:'•■■"-. ; Loss 10 per cent., .8 1.3 i Cost of distribution 6.5 - • 6.5 - - Profit per gallon .;. .7 " 3.2. ""' 16.0 " 24.0 "Had the milk vendors been able to : pass on acurately the'same rate of profit in April as they were receiving in . January, the retail prico would have been Is. lOd. per gallon or 2sd. per : pint. The practical difficulty of dealing > with farthings probably induced -the ; vendors to charge 3d. per pint. An : alternative arrangement would h&vo ! been for the vendors to have charged I 6d. per quart for three month's and od. \ per quart for two months. . >, "When the board opened its inquiry '■' tho vendors had already had four I months ■' at the higher price,- and the i board suggested to tho executive of I' their -association tho advisability 'of ' reducing the retail price to fid.-as'from ; August 12. The association, however, 1 insisted ■ that before the retail";' price ■ i was reduced, the landed icost must first be lowered. The vendors, outside the ) association, namel.vir'Messrs. Bodley, ' Beid, Morgans-Wood, and Johans6n K • adopted the hoard's suggestion and to-' ; duced their 1 -; prices accordingly." .Tho ' report concludes with the opinion first » mentioned,, which is based on the ns- > sumption that the Wellington Dairy i Farmers' Association maintains the prei sent price to vendors to' the enoV of i August.