A BIG FIASCO

Hokitika Guardian, 10 March 1927, Page 3

A BIG FIASCO

NEW ZEALAND BUTTER. PROBABLE LOSS OF TV/O MILLIONS. [“Sydney Sun ” Cables.] (Received this day at 9.H0 a.m.) LONDON. March 9. The Nev.- Zealand Dairy Hoard's Control policy lias resulted in the biggest Tin sen ever known in trading circles,” said a prominent market authority. “ft will have catastrophic consequences on New Zealand’s basic industry. What .Mr Coates foretold in a cabled warning in November has now happened.- If New Zealand producers had acted on .Mr Coates's advice, iu- ' of attacking him politically for pointing out the unwisdom of the

/Board's policy they would have been now in a happier position. The sooner producers face a crisis the sooner they will amend the policy. It is estimated that producers will likely lose £2,000,000 this season, and will

take two or three years to rccofer tli held here prior to the control The New Zealand methods antagonise* the whole trade.” The 'same authority added that th<

Australian Board drew up a seliona of co-operation with the traders, will whom they worked harmoniously Whereas New Zealand drew up its owi academic scheme and imposed it upoi the trade, regardless of its impraetliability.

A contrast to the scheme is shown by the fact that Australian stocks were cleared on arrival, hut New Zealand sold only ten thousand tons out of sixty thousand destined for the British market. At* present Jtcn thousand is stored here, including portion Of the December arrivals. The alarming thing is that with the four best selling months gone. New Zealand still has 85 per cent of her stocks on hand, and will meet keenest competition with the Northern Hemisphere’s spring output. According to the same authority the trade realised that producers had a right to determine how the produce .should bo sold, but decided to test the scheme, hoping defects would he remedied. The Board promised goods would bo cleared as they arrived hut the promise was not kept. Contrariwise the Australian policy steadied the market and gained the sympathy of importers; also the Australian Board carefully estimated prices according to stock statistics, market conditions and prospects. Their actions were based on reciprocal information between tile Board and traders. The New Zealand Board adopts a- dictatorial attitude which the British trader w ill not stand.

. Leading importers assert .Mr Coates —*■ in London was assured that the Board would meet me markets’ wishes, instead of which the policy has been speculative. The impasse was due firstly to the Board’s holding policy and keeping limits above sales point; secondly, strong antagonism of wholesalers and retailers to price fixation hv the Board, which dictated to traders instead of co-operating and they gambled for a rise, being thus virtually guilty of the same speculation for which they formerly criticised traders. Wholesalers and retailers refraining from buying * except when forced, because fixed prices were unprofitable. Similarly wholesalers refused to handle New Zealand butter, because they paid the same price for large quantities as for a few boxes. The trades sympathise willi the Board’s original intention to secure a continuity of' supplies, but the

policy was overdone and failed. Some producers are likely to be pressed with claims on account of overadvances against supplies.