SUGAR UP BY £4/2/6 PER TON

Grey River Argus, 10 April 1948, Page 4

SUGAR UP BY £4/2/6 PER TON

Government To Raise Subsidy For The Company P.A. WELLINGTON, April 9. In a reserved judgment, delivered to-day, the Price Tribunal has granted permission to the Colonial Sugar Refining Company, Ltd., to increase the price of ripened 1A sugar by £4 2s 6d per ton. The Government has informed the Tribunal that, in respect of the sale of sugar for domestic use only, it intends to meet the increased cost by vzay of a subsidy There thus will be no increase in the retail price to the domestic user. The Tribunal was of opinion, stated the judgment, that the Company should b'e allowed the same margin as was' established under the agreement between the Government and the Company in 1942, which returned the Company a profit of 5 per cent, after tax on the shareholders’ funds —namely, £2 5s per ton, which the Tribunal considered to be a reasonable return. The new price would mean that the Company would he required to absorb increased costs of 13s -4d per ton. “Without taking into consideration the Comnany’s overall financial position, and the fact that its reserves increased from £6,308,000 in 1939 to 19.457,000 in 1947, the Tribunal is of opinion that, in the case of a company such as this, with a nationwide demand for an essential commodity, and no competitor and no competition, its position is analogous to that of a public utility, and that a return of 5 per cent, tax paid on its shareholders’ l'un d - employed in New Zealand is a reasonable return under present conditions", stated the judgment. The Tribunal agree., that increases in the prices of golden syrup and treacle, corresponding to any increase in the price of sugar, should bo allowed.