TRADE CONDITIONS

Evening Post, Volume CVIII, Issue 137, 6 December 1929, Page 16

TRADE CONDITIONS

A CHANGING WORLD

NEED OF EXPANDING MARKET

EMPIEE EEEE TE-ADE

"That this Dairy Council supports and encourages the gradual development of free trade within the Empire,'' was a resolution carried unanimously by the New Zealand Dairy Council yesterday, on the motion of Mr. J. G. Brechin, seconded by Mr. J. Dunlop.

The necessity for co-ordinating the marketing of Empire produce, in order to meet the changing trade conditions throughout the world, was strongly stressed by Mr. W. GocfQfellow. It ■was once held, he said, that competition -was the life of trado; but the principle of modern business was "Combine-" or get out. The practice now was for banks, shipping companies, and other largo organisations to combine ori main points, such as prices and rates, arid to compete in service only. They standardised their charges, thus securing assured profits, and left competition., to the field of service only. The/ developments in the way of chain stores were enormous; the Margarine Union, for instance, now holding a. controlling interest in no less than 6000 shops. TBo buying power for all those sh'bps was thus unified and exorcised by one individual. Other large groups operated in conjunction with shat group, and the whole determined their marketing policy at meetings held "weekly. The result was that there was only a handful of buyers in London to-day, and the once powerful marketing organisation of the New Zealand dairy interests had, in consequence, been greatly weakened.

:- To meet the changed marketing conditions, Australia and Canada now ■worked on the group system. Denmark hit 1: for many years operated through eleven groups only, while in Iceland and Siberia marketing was assisted by the Governments, and the United States Government had recently set aside the huge sum of £100,----000,000 for financing marketing'associations. That money was available to. producers at low rates for co-opera-tive purposes. New Zealand, ho declared, must effect some improvement in her marketing methods or suffer for it. Organised selling was required to meet the following threo conditions: (1) Multiple shops and their combined ■buying; (2) increased production in various countries and the overloading of London; and (3) a probable lower level of' prices due to the increased value of gold. There had been eight years of rising prices, followed by eight years of falling prices, but it seemed to him that prices wo c still due to fall. There was no doubt thero was a shortage of gold in. the Empire— the United-States had pretty well cornered it all—and economists seemed to think there would be a falling market for some considerable time to come.-

To meet the position, it was necessary to get the fullest possible price level for " New Zealand butter and cheese, and that could best be done by an efficient marketing organisation. Secondly, expanding markets for New Zealand dairy produce 'had to be secured. At the rate at which the industry was expanding, production in the Auckland Province alone would double inside ten years. To make provision for that expanding production they must have an expanding market, and the tiest way to secure that was to increase the prosperity of the United Kingdom. That, he held, could best be done by a tariff adjustment within the Empire. They were all keen-on the development of Empire trade, especially between New Zealand and Great Britain, and he believed that Empire dairies would be of considerable service in this direction.