WELLINGTON NEWS

Hokitika Guardian, 14 March 1929, Page 7

WELLINGTON NEWS

BUTTER TRADE COAIBiXE

[Special To The Guahdian ]

WELLINGTON, March 11

It was reported by cable a few days ago that the Home and Colonial Stores, Ltd., was increasing its capital to £3,000,000 and bad secured a controlling interest in the .Meadow Dairy Cov., Ltd., the deal involving a sum of £2,833,000. This does not give an idea of the ramifications of the coin, bine which are really extensive, for the following concerns now become associated:—Margarine Union, Ltd.; Vandcn Berghs, Ltd.; Jurgens, Ltd.; Home and Colonial Stores, Ltd.; .Meadow Dairy Coy., Ltd.; Maypole Dairy Cov., Ltd.; Pearks Dairies. Ltd.; Sherrys Dairy Coy., Ltd.; Broughs Ltd. ; Neale’s Tea Stores, Ltd.; Lipton, Ltd. The Margarine Union Ltd. control Vandcn Berghs. Ltd., and the latter is associated with Jurgens, Ltd. These throe may .he said to be the Margarine Combine. Jurgens, Ltd. has a substantial interest in Home and Colonial Stores, Ltd., which controlled 1010 stores, and in the Maypole Coy., Ltd., which controlled 1000 stores. Vandcn Berghs acquired an interest in the Meadow Dairy Coy and this latter has a controlling interest in Pearks Dairies, Ltd., Sherry’s Dairy Coy, Ltd., Neale’s Tea Stores, Ltd., and is associated with Lipton Ltd. The interests of the eleven concerns are so mixed up that it is difficult to define. The fact remains that there enierges from the mix-up a very powerful combine which now controls a- chain of 3.500 retail shops, and it is a power to be reckoned with. Home and Colonial Stores, Ltd., was formed in 1895 to acquire the business of a company of the same name which was established in 1888, so that it is now an old and well established concern. In 1924, it acquired a substantial interest in the Maypole Co., Ltd. This latter concern was formed in 1898 to take over two private provision businesses. Pearks Dairies was formed in 1914 to take over various businesses as provisions merchants. Later the Meadow Dairy Coy., Ltd., secured control of Parkes Dairies., Ltd, by acquiring 97 per cent ol the. issued preference capital and part ol the ordinary capital. Lipton, Ltd., was registered in 1898 to take over tlic provision supplying business of Sir Thomas Lipton.

This combination may be described as up-to-date “ rationalisation ” which covers the amalgamation of a number of companies all producing or dealing in the same commodities. The object being the closing of that which is reduntant and concentrating business, thus making it possible to reduce prices to make a. more reasonable profit and to sell an increased quantity because of the reduced prices. The combine can both buy and sell better, because of its large capital and large turnover. The new combination in the British butter trade will cause a further reduction in the number of buyers in the market. With a chain of 3,500 retail stores the combination can buy in very large quantities, indeed it must do so. but it does not necessarily follow that the combine will depress prices. Any attempt to force down prices can be easily countered if supplies are not in excess ot requirements. Butter will *keep in cold stores, but customers cannot im> induced to wait. It is possible that so large a concern may wish to do business direct with the factories in /Ncv Zealand and Australia, and if that comes about it would hurt the Tooley street agents, whose services would not be required. It is just possible that the combine may have the cflect of steadying prices, at all events speculators are unlikely to take, gicat risks when the. number of distributors ready to compete for supplies has been reduced so greatly. The London butter market has been fairly strong and the average price for 1928 was above that for 192.. Messrs Samuel Page and Con. in thenlast monthly circular to be received, state it is satisfactory to note that the average price for the year 1928 is higher than in 1927, lG5s 9d per cwt, and in 1928 the average was Id's 9-J‘b an increase of 2s o<d. The N.Z. prices were 108 s (id in 1927 and 17(5s (Ud m 1928, an increase of 8s Old. and the firm remarks it is obviously a very healthy indication of the status of a product in a market when its y.i ue rises considerably coincident with an incren sed qu anti ty.