WELLINGTON NEWS

Hokitika Guardian, 24 July 1926, Page 1

WELLINGTON NEWS

-MEAT RECONSTRUCTION

(Special to “ Guardian.”)

WELLINGTON, July 21

It may he taken for granted that some effort will be made to put tiltmeat freezing industry on a better looting than it is at present, but whether success will attend upon such efforts is quite another matter. The position is certainly very complicated, indeed one may say that it is almost chaotic. With very few exceptions the freezing companies are heavily in debt, and they can continue operations only with the goodwill of the creditors. It

has been suggested by .Mr J. S. Jeasop, Vice-Chairman of the Aleat Control Board, that steps should be taken to stabilise the industry by amalgamating some of the concerns, the new company undertaking freezing only for exporters/ at a fixed rate for all* exporters. The great trouble avill be to arrange the amalgamation, for the companies that should amalgamate have only loads of debt to bring into the pool. Even if the promoters were fortunate enough to arrange ail acceptable , scheme of amalgamation from what source is the new capital to be derived? It must ho borne in mind that owing to the action of the Government and the .Meat Control Board in refusing to facilitate the sale of the Wellington -Heat Export Company’s works to Borthwiek and Sons, freezing works are no longer regarded ns a security for bank advances. There is no free market for freezing works now. The new' company could not even look to British sources for funds, .for a

i farmers’ company, believed to he the t Keilding Freezing Company, was not i permitted to accent a loan of £25,000 : from a British firm interested in the trade. The capital for the new con- . corn must he obtained in New Zea- > land and it is safe to predict that > very little if any capital will he avail- . able for the enterprise in the Dominion, i for the reason that shareholders in meat companies have suffered considerable losses, and furthermore there is not now a free market, for freezing works. If amalgamation fails, what then? Some more of the smaller and uneconomic concerns must close down, and their trade will pass into the hands of the big exporters at no cost to them. If amalgamation is a success, and two or thre'e fairly large concerns are established for the purpose of freezing only this will not prevent the business passing into the hands of large scale exporters. There is a belief that farmers will freeze on own account, hut there is nothing to support that belief. They have failed to support Hie concerns in which they arc financially interested because they could sell stock to the big exporters at good prices. They will continue that policy, and the large exporters will get control. It is more important to the big exporters to get control of the fat stock market than to secure control of freezing works, and whether there is amalgamation or not, they will secure that control. What we seem to fail to recognise is that the meat trade industry to ho successful must ho operated on a big scale. The big exporters have big facilities for distri- • luiting the meat in consuming centres, and they must he assured of regular supplies, and therefore their buying operations must supplement their distributing operations. It is buying and selling on a big scale and that is what the co-op. ('rearing companies are up against. SO AM? TRADE STATISTICS. Although for the twelve months ended May 31 there was an excess of imports over exports amounting to over : Cfl,000.000; the monthly figures for the current year up to the end of May dis- ' elose an excess of exports for each month, and the excess for the five f months amounted to £1.495,887, and 1 this would have.jboen larger hill for the ' fact that certain lines of our produce are now subject to shipping regulations. Tlius the export of butter and - cheese for the season to the end of .May were valued at £13.229,425, as compared with £15,924,(3(11 in the corresponding period of the previous year, a decrease of £2,713.23(1. but the quantity in store awaiting shipment at the end of May was valued at about C 2.500,000 more than a year ago. Tf this be added to the exports, there, would have been an increase in the excess of exports over imports of a further million and a half. A somewhat similar position exists in regard to frozen meat, hut perhaps when the produce year ends on September 30, the position will show to better advantage.