DAIRY EXPORT CONTROL

Dominion, Volume 20, Issue 58, 2 December 1926, Page 18

DAIRY EXPORT CONTROL

AND ITS CHAMPIONS

(To the Editor.)

Sir, —Having read in the Dominion Mt. Grimsdale Anderson’s letter of November 19, the New Zealand Welfare League’s reply and J T. Kent’s further comments on same I would like to remind these gentlemen that it is only possible to fix a price when you are Independent whether you sell or not. This does not apply to Now Zealand butter and cheese, because London is a final market where any surplus quantity of butter and cheese cau and must be sold. The buyer pays a price which bp considers from many aspects chiefly retail consumption plus the quantity on the market, plus his own private opinion of the future production in the world including the British Isles. The absence of orders or the smallness of the purchase of a large Humber of buyers indicates, • together with a good many other sources of information, how the market is going. The more gradual the change the better average value can be secured for the shipments on the market, but if the buyer is ignored and the price is fixed on someone’s idea of values and not on the actual transactions that have taken place two things might happen: first, the people who fix the price. might be nN" rng the price from loaded information which will allow the informant to quit some purchased butter and cheese from other countries on the price of New Zealand being kept up. Second, the buyer, who is 7-Bths. of the transaction (because he is independent of New Zealand and New Zealand is not independent of him), needs to satisfy himself that the price is correct. The buyer first of all makes sure that no firms from whom, ho get ideas of value are agreeing together on a price fixing policy. If he is satisfied about that he takes into account the world’s production and the proof of actual sales, etc., on which he forms his judgment as to The reason why the retailor and wholeealemen are up against anything except the world’s recognised system of the law of supply and demand is because in their opinion this is the only just ana equitable low known as a square deal. The big buyers of butter and cheese •who have dominated the market ™ uc h more since Tooley Street was interfered ■with by the producers are making much larger profits now than they have ever done before. Get the balance-sheets of these big buyers before the fiitt farmer s organisation went to London, and compare them with to-day. The profits of eomo of these concerns have increased enormously. This is partly where the Id. per lb. , loss, which we used to got above Australian has gone to. lire largest buyers in Great Britain are perfectly organised and are a very formidable organisation. It is an organised buying to counteract the organised selling. The London market sales for the day if the price fixing is in the buyers favour are enormous, while the day gales if the price is against the buyer were double what wo have had m the Saud each seller had a larger number of clients the regulation of prices by the purchasers or absence ot tne numerous purchasers would bo more gradual and our losses not so severe. It would not give the big monopolist buyers their chanco of bulling and bearing the market with the all important buying power. Seeing that the producers’ coni*ienco has been destroyed so far as the distribution in London is concerned, why doesn’t the producer go back to the once universal selling system, or sell all they can m New Zealand and consign the balance like the Australian and Danish system. The control Board could get the consent of the factories who wish to sell, and sell in New Zealand and be in consultation with them on the telephone in direct touch with the meeting cf directors. The Control Board would know what the other factories were selling at. Even if New Zealand controlled all the butter imported into England it would be impossible to gauge, guess, regulate, control or arrange an economical value according to the buyers’ ideas. It is the actual sale that makes the value and not guess work. This is the reason why the three committee men from Tooley Street cannot do any good. The price fixers in the past admit defeat by calling upon Toolev Street to help them. This will get Tooley Street into trouble with the buyers more than ever. The New Zealand nroducer will be well advised to leave the responsibility on Tooley Street’s shoulders entirely for getting a good market price for New Zealand butter and cheese; unless New Zealand can open their i.wn retail shops because the retailer and wholesale men are more prejudiced against New Zealand than Mr. Grimsdalo Anderson or Mr. J. T. Kent are against Tooley Street. I refer to a sample letter from a retail grocer to the “Grocers* Journal,’* Sublished on page RO of November of le “Now Zealand Dairyman Journal’’: "This grocer actually recommends his fellow grocers to cut out New Zealand produce and to commence supplying and handling goods produced in other parts of the Empire and the world, where there are sons who are still prepared, thank God, to trust their Mother Country to give them a straight deal. This inan and Messrs. Grimsdale Anderson and Kent should meet and they would find that tho retail grocer is a hard individual to handle once he gets an idea in his head. ’ One of the leading men in the butter and cheese industry could tell you of man who is determined to leave off purchasing New Zealand butter and his purchase was one thousand tons per y?ar. I strongly recommend all members .of Parliament, bankers and the public who are interested in our twenty millions sterling to read both sides of the question. “The Exporter” represents certain farmers’ representatives* views, and the “Dairyman** is a Saper uncontrolled by anyone except the irectors and shareholder of this paper. They publish information for and against. Now let me remind “Exporter” that his statements in Ths: Dominion, November 27 issue, about the Danish producer fixing his own price for butter is not correct. The Danes endeavour to sell in Denmark all their Danish butter, but the buyer has the last say, and very often most of the Danish butter is left on the Danes’ hands, and he has to export it to be sold on consignment on the English markets. If the “Exporter” will tell your readers who held the butter and cheese back in New Zealand last year he will he placing the chief cause of the trouble and cause of this slump on the right shoulders. Mr. lorns, the London Control Board chairman, is a very able man, who has earned the respect and confidence of the trade in England. He has seen the result of the price fixing which “Exporter" says has been gojng on for some time, and Mr. lorns has emphatically condemned the price fixing that "Exporter” refers to. So has the Government nominee. These men have tried to save New Zealand.

“Exporter” should know that no English manufacturer can fix his own price and get that price unless he is. lucky enough on rare occasions to gauge correctly the market value of his goods. This country is an agricultural and pastoral country with few good commercial men. 1 cannot too strongly emphasise the importance of having commercial men in Parliament, judging by the way things have gone during the war anil since. The difficulties are too great for anyone except the hightyteiined commercial man, and the country needs good commercial men in Parliament. Then we will get back to a highly prosncrous state. T do not agree with Mr. Maekrell tackling the Control Board. They are only doing their best for their constituents; ho should endeavour to educate the farmers. I disagree with "Exporter” when he claims that the farmers' co-operative concerns have been successful, because some of ■ 1 biegest losses have been made in farmers’ concerns in this country, and it is a pity the proprietary dairy factories are included in this Dairy Control Bill, because they would do better for the farmer than farmers’ concerns, who make a mess of business by mismanagement. As stated by "Exporter” the price flx-

iug experiment has been tried for several years. No comparisons of prices have ever been seen, so the inference is heavy leases. The price fixing in London was, according to tho trade, a huge joke, the same as the systematic holding back in New Zealand this last year helped the boycott causing the slump. This is also a very serious joko. I am not surprised that 14 importers in Tooley Street opposed the Tooley Street Committee helping to try to patch up a bad system of price fixing because the inside knowledge that the Tooley Street supposed speculator will get will be very valuable to make money out of other butter and cheese. New Zealand makes the mistake of thinking we are the only country shipping butter and cheese. If any Tooley Street man has a hand in helping to hx prices he will be able to influence the price upwards if he is landed with a lot of butter from some other country that he would otherwise make a loss on. It is surprising that the New Zealand farmer accuses Tooley Street of being speculators when they get some of these other men to help fix prices. This is surely the height of absurdity, and a weak admission of incompleteness and lack of faith in their own scheme.—l am * etC “ ANTI-BOYCOTT. November 29.