WELLINGTON NEWS

Hokitika Guardian, 11 December 1925, Page 1

WELLINGTON NEWS

ESTIMATING FOSSE-.. (Special to “Guardian”.} WEFFIXGTON, December 0. The rapid decline in the price of butter in the London market is causing some directors of dairying companies to venture upon estimates ot probable losses. One Taranaki authority places the loss at between four and five million pounds sterling. In adidtion to the drop in values there is expected to be a decrease in the production, which Mr W. Grounds, Chairman of the Dairy Control Hoard, esimates at between 15 and 20 per cent, and he thinks the monetary loss will be slightly in excess of 113,000,000. It is difficult to see bow estimates of any value can be made now. No one can forecast the level to which butter will drop, it has been falling rapidly up to the present, and the bulk of the supplies

have yet to reach the market. The Fondon representative of the New Zealand Producers’ Co-op. -Marketing Association whose reports have always been fair and accurate, in his latest message dated December I, says, “ 'I be market has rapidly declined. For the past two months business has been negligible, buyers anticipating longer duration of the seamen’s strike, bought freely at high prices, and are now determinedly holding off the market. There is no prospect of the market improving before Christmas. Stored butter is at it discount, and is being neglected in favour of fresh arrivals. Second grade butter is unsaleable. Tho (|tiantily of butter afloat from New Zealand. Australia and the Argentine is s. 10.(100 boxes.” Tile quantity afloat is equal to 21,210 tons, more than sufficient to supply British requirements for four weeks, and with this vast quantity avilable the collapse of the market is inevitable. In the past season the lowest price touched was 118 s, but on this occasion the drop must go below that. I'ntil the full measure of the decline is known it is useless making estimates of the loss of revenue. Cheese is still a very profitable commodity and a. large number of factories have actually sold the hulk of their output at prices equivalent to lOfis in London. The British importers who have bought this cheese will naturally nurse the market and prevent il sagging. The position of cheese is a great tribute to free marketing which the Dairy Control Board will stop .as from August Ist next. If butter falls to a low point and can be retailed in Britain at Is (id per 11> there would follow a very large purchase in the consumption which would change the outlook. At all events it is too soon to venture upon estimates of loss of revenue. GEAR MEAT COMPANY. This company is regarded as the premier meat company in Now Zealand as it certainly is one of the best managed in the Dominion. Like all this company has suffered in the volume of its profits as is disclosed in the ha lance sheet lor the year ended November 30, which Inis just been circulated. Tho profit on sales and mannfiietures amounted to L 117,821. which contrasts with £110.773 the amount shown in last year’s balance sheet, but in the latter is included investments. Even allowing for the return from investments the profits from 'the freezing business were less, which merely goes to show that I’ree/.mg operations during the past- season were, unprofitable even to the best managed of tho companies. With the balance brought forward the amount available for distribution is £OO.OIO, out of which £II.OOO has been placed to reserve, £I.OOO. is added to tho insurance reserve. the divided at the rate of Is .Oil per share absorbs t‘10.210. tho amount of £IO.OOO is set aside to meet taxation liabilities and £20.300 is carried forward, against £20.011 brought into the accounts. In addition to the dividend the shareholders receive a bonus of 3d per share out of the insurance reserve, so that the dividend bonus total 2s per share or 10 per cent. Fast year the company distributed by way of bonus to .shareholders Ij per cent tax free stock in the proportion of £1 value of inscribed stock to each share in the company. This distribution was affected during the early part of this year and is reflected in the balance sheet figures Investments which last year stood at £008,113 are now shown at £230,103.