PRICE-FIXING

Evening Post, Volume CXII, Issue 126, 24 November 1926, Page 6

PRICE-FIXING

(To the Editor.)

Sir, —If is clear from recent letters that the fundamental-principles involv'od in price-fixing are not clearly grasped. Price-fixing must obviously be against the public interest, and therefore the public through its representatives —the Government —should inako such a movement illegal. Price-fixing is against the public interest because it bolsters up that costly and inefficient method of distribution, the multiplicity of small shops, which makes it difficult for any one shop to secure sufficient turnover except with big profit margins. Thus the public pay dearly for the privilege of using perhaps five times the number- of shops needed. The only means under an imperfect economic system of keeping the number of establishments anywhere within reason is free aiid open competition. The retailer who cau by enterprise and efficiency distribute goods in quantity at a low cost is not a "price cutter" but a "cost cutter."' The manufacturer can always handle his larger orders at less cost and at less risk than a multiplicity of small orders. . Such a retailer, therefore, buys better as well, as distributes more cheaply. If in the stress of competition the small man goes under, it is unfortunate, but the community does not need that particular cog in its machinery of distribution. The spread of small shopkeeping is symptomatic of the desire* for a livelihood in towns as opposed to taking part in the harder work of primary production. Landowners and speculators arc not slow to take advantage of this. Thus, high-rented shops are springing up in all directions, and the public are asked to foot the bill in the shape of fixed, prices. . It is high time the public realised the. toll that is being taken under the guise of rents— to say nothing of other top-heavy overheads. Shop rents in New Zealand . main streets are frequently double those obtaining in busy London streets. To pay upwards of 2b rent on £1 worth of goods surely is a condemnation o{ the small shop system.—l am, etc., P.B.P. 20th November. ,

(To ttlß Editor.) Sir, —The letter signed by "A Small Man" in Thursday's "Post" is a levelheaded contribution on the subject of price-fixing and the P.A.T.A. As a member of the deputation which recently waited on the Acting-Prime Minister and Minister of Industries and Commerce, and representing a firm which takes advantage of every quantity and cash discount available, I am in entire agreement with "A Small Man" that the substantial discounts given to big buyers by manufacturers and wholesale firms place the small trader in an unfair position, and that the solution of the present difficulties lies in the manufacturers and wholesalers putting their house in order and working on the flat rate system, and not in the formation of a P.A.T.A. to control everybody's business and pass the cost of this control and the increased profits on to the defenceless public. Maybe it is only hnman nature to study self-interest, and I take it that "A Small Man" studies self-interest in supporting the P.A.T.A. Am I /to be accused of self-interest because we fight against the P.A.T.A. (and its higher prices), which seeks to give us greater profits than ever before, at the expense of our customers, and because we gee fit to pass on to our customers wherever possible the quantity and cash discounts we receive? At the deputation I made no claim to being a public benefactor. What I did say was that the hundreds of shops in this country to-day that were concentrating on the reduction of overhead expenses in proportion to turnover, and passing these savings on to their customers in the form of lower prices, are rendering a distinct service to the public, and had a right to be protected against the activiT ties of such organisations as the P.A.T.A., which intended to force them to raise their prices under a threat of cutting off supplies. "A Small Man" and I are apparently in entire agreement on the main points of his letter, so I suggest that he come out into the open and get into touch with me so that we may work together to bring about a system of buying which will be fair to all and still allow the public to get the benefit of prices dictated by free competition. —I am, etc, W. T. RICHARDS.