WELLINGTON NOTES

Hokitika Guardian, 19 April 1924, Page 1

WELLINGTON NOTES

FARMERS’ FREEZING WORKS

(Special to “Guardian”.)

WELLINGTON, April MS

At last those interested in farmers’ freezing works are disposed to face tlie serious position that now eontron ts them, lor last week a private meeting of the representatives of a number of farmers’ freezing works was held in Wellington to discuss the possibility of bringing about ail amalgamation of all the freezing companies in New Zealand. A committee was appointed to confer with the proprietary companies and further meetings are to he held in furtherance of the project. Those closely connected with the meat trade in Wellington will certainly do their utmost to help in any reasonable scheme that will ultimately result in the reduction of the number of freezing works in the Dominion. Just lie fore and during the war quite a number of freezing works were erected in the country, especially in the North Island, the hulk of the money being found Informers or guaranteed by them. There were the usual arguments of such works being of advantage to the town and district and would enhance land values. No thought was given to the effects likely to follow upon a multiplicity of works being established in districts incapable of supporting them. THE PRESENT POSITION. At the close of the last season, indeed in the season before, several companies, sepecially farmer-owned ' concerns, found themselves in financial difficulties and there wore voluii- ' tary liquidations. The losses caused the larmers to look around for a scape-goat and as usual the middleman ' and the shipowner were assailed, and it was thought that bv giving the pro- 1 dueers control of the industry there f would he an improvement and so tile f lloat (’oil! ro I Board came into exist- I * :mee. However well meaning the 1 members of the Board may be ii is ' ihviotis that they are incapable of | filing anything to relieve the position. * Ibis season values of all classes of " rozen meat have gone lower, and the osses this year will lie greater than n 1923, and it is this that has forced 1

the companies to take some action. \ erv rightly they are not asking the Aleut Board or the Government for assistance, for it is not a matter for outside interference. The reform or the remedy must come from the companies themselves, and any reasonable proposal showing prospects of success will certainly .get strong support, for the trozen meat industry is of too great a benefit to New Zealand to be allowed to languish. EXCESS FREEZING PLANTS. The basic cause of the present parlous condition of the meat industry is, in the opinion of those closely associated with the trade in Wellington. Unit the number of freezing works in the North Tslatul is in excess of requirements. .Messrs W. Weddel’s annual review of the meat trade confirms fiiis, for it is stated that the combined freezing capacity of the 10 freezing works in the Argentine is 11,000 head of cattle and 2-3,000 sheep per day, and the exports in 1023 amounted to (173,751 tons. The number of freezing works in New Zea-

land is -Id, with a total killing and freezing capacity of 4,130 head of cattle and 149,000 sheep daily, and the exports last year totalled 149,217 tons. Thus New Zealand posesses more than four times the machinery capacity of the Argentine while the exports of meat from tho Dominion were less than one-fourth of the exports from the Argentine. Comparing live stock, New Zealand poscsses 3, !So.(>!.‘4 head of cattle and 23,091,439 sheep, while in the Argentine Republis there are 37,0K1,830 head of cattle, and 30,071,841 sheep. Messrs W. Weddel discredit, the Argentine slice]) returns and state that having regard to the quantity of wool produced annually, the number of sheep in tkroon lit r.v is more likely to he in the neighbourhood of 30,000,000 heal. SUICI DAI. COMPETITJON. There are at least 33 distinct freezing companies in "New Zealand each with its staff of one kind or an it-i.ir running up costs and over-head charges. If the country had yto.'k enough to keen all the works going i' would he an excellent thing, hut unfortunately there is not enough lit stock to keep half the number of companies at work, with the result that there has been cut throat compel': m to secure available supplies to keep machinery operating, and of course, in a contest of this character the victory is with the financially strong companies. Practically throughout this season, it is stated bv an author ity, the prices paid for fat stock have been above l.ondou parity. Tho weak concerns are exhausted, the stronger companies have made heavy demands on their reserves and none have made profits. 'l’he position has to he faced. A number of the freezing plants must lie closed down and how to bring that about without causing nndu* hardship is the problem that has to be solved.

THE MEAT FREEZING INDUSTRY. WELLINGTON. April 17. It is not too much to say that- the meat freezing industry of the Dominion is passing through a serious crisis. The a 4 verse position in which the freezing industry finds itself to-day is due largely to lark of business foresight, unsound judgment and perverted local interests. Dosses were made last year and heaver losses are being made this year, and those concerned me groping in the dark for a way out. -Fust how serious the position is may bo judged from the the fact that a number of representatives c f farmers' freezing works met in We.iington a few days ago to considc: the possibility of the amalgamation of all the Now Zealand freezing companion in the interests of tho meat producers. The official report forwarded to tho newspapers stated that the general idea is to place the ownership and control of the industry in the hands of the stock owners of the Dominion, while at tho same time adequately compensating the present shareholders, and ensuring the continuance of a genuine competition for the live stock. A SOCIALISTIC SUGGESTION.

The scheme is nothing less than an insidious attempt to nationalise an important industry, and would he so regarded. had the proposal emanated front the Labour Party. As far as can he learned, the scheme is tint all the works in the country should he valued.

having regard to their location and * suitability for operating economically, the present earning capacity and other related features. Payment is to be made by debentures with a currency of thirty years. The shareholders of the proprietary companies, even if they ac- , copt the proposal, will certainly want some guarantee that the interest on the debentures will l>e paid regularly, and the debentures redeemed on maturity. The Government dare not undertake the guarantee, indeed it is difficult to see how the Government can be persuaded to endorse the scheme after Air Massey’s declaration that he was not a j socialist and would not b a party to I nationalising any industry. The proposal, ns at present known, is likely to I lie still-born, for it lias not a single merit to commend it. Indeed, it appears to be crude and unworkable, except at great cost and great loss. EXTINCTION NOT AMALGAMATION A gentleman closely connected with the industry, and who can speak with a certain amount of authority, wFei questioned regarding the proposal, expresses tlie opinion that what was needed was extinction of some freezing works, and not amalgamation. He pointed out that New Zealand possessed 40 freezing works, and the stock census last published showed that we had 23.081,-139 sheep in the country. Cattle may be disregarded, for our exports of frozen beef were small and are growing less. In the Argentine Republic there are 30 freezing works, and the stock in the country, according to the latest and most reliable information, comprised 37,001,850 head of cattle, and I about 50,000,000 sheep. The capacity of the Argentine works was 11,000 head of cattle and 25,000 sheep per day, and they operate all the year round. The capacity of the -16 works in Now Zealand is about 4,-130 head of cattle and 148.000 sheep daily. Another view ol the difference between the two countries was afforded bv the volume of :

business. During 1923. the Argentine exported 683,751 tons of chilled and frozen meat, while New Zealand; during the same period, exported 149,217 tons, 'there aie too many freezing works in New Zealand for the slock available, and tlie only cure is to close down the works that are not, really

wanted. CUT-THROAT COMPETITION. With the excessive number of com-

panies and the limited amount of stock competition has been terrific, and this season, as in tlie past season, prices have been paid for sheep and lambs well above London pari tv and naturally the contest has gone in favour of the financially strong companies. Very few of the concerns have secured enough stock to keep the works going at near capacity, and with heavy overhead charges the losses have been very severe. It is certain- that when the balance sheets are issued this year the dirccors’ reports will make painful reading for many people. Probably a i thor lot of companies will be forced into liquidation and the guarantors called upon to redeem their guarantees. This will be. a surer anil safer way of eliminating the surplus work than amalgamation. It is a ruthless method of the law of supply and demand, but x lie- industry would have a better chance of recovery as a result. The amalgamation, in the opinion of the authority quoted above, may be dismissed as stupid and worthless because unworkable.