WELLINGTON NEWS

Hokitika Guardian, 8 October 1931, Page 6

WELLINGTON NEWS

■RESTRAINT OF TRADE

(Special Correspondent)

WELLINGTON, October 6. (

In recent years successive British Governments have set up commissions to investigate and report on special subjects. The Cunlift'e Committee was appointed while the war was in progress to consider how best Britain could revert to the gold standard, and six years after the report was available Britain reverted to the gold standard, that was on April 28, 1925.

Five years 7 ago a committee to report on national debt and taxation, .under the chairmanship of Lord Colwyn, was appointed, and that Cpmmittee has just handed in its report,.e have had the Macmillan Committee on Banking which submitted a very able and uselul report, and the May Committee which is reported on balancing the Budget, and which ultimately led to the • tormation of the present National Government in Britain.

The results of an inquiry into the relations between manufacturers, wholesale vendors and retail vendors of goods, 'was reported by a committee appointed rather over a year ago. The practices investigated were (1) The withholding of supplies by manulacturers and wholesalers from certain would-be retainers, and (2) the granting of supplies only on certain conditions regarding their resale. ,A similar . inquiry was conducted by the German Economic Council last, year.

According to the report the. answer given was that the retail prices of goods was being kept up in consequence of such conditions, and the-German Government thereupon took put emergency powers to annul all limitations placed on retailers where the price was shown to be undue. • Reductions in the price of honey, cotl'ee and certain drugs, all branded goods, were shortly altorwards announced to have been secured through the States intervention. 11l Germany it was considered - that some 25 per cent, of consumptive goods were “branded am. sold on conditions only.

This imposition ot conditions on retailers regarding the reside price to he charged was found to be a wide-spread and growing practice in Britain. In the grocery trade It was found that dealers’ stock consisted ot one-sixth ol branded goods nojj subject to price. restrictions, one-third price maintained (branded) goods, the remaining halt unregulated bulk goods. Price regulation is obtained by the threat o) boycotting the price-cutter and preventing him from stocking the goods again. Ihe price-cutting complained of is sometimes direct, sometimes indirect, through granting of discounts on a customer s whole account, or through distribution of dividends proportionate to the customer s turnover, or rebates on purchases, as is .the habit of co-operative societies. The Committee recognised certain disadvantages to the public through this price-fixing. A. definite profit margin is fixed for the retailer, and though the most efficient retailer may be ready, to give--' his services loir a smaller profit he is debarred. The complaints of

manufacturers against price-cutting are, however, justified .in the report. “There can be little doubt that the effects of price-cutting have been severely left by manufacturers, wholesalers and retailers alike. The system of price maintained, it is argued, is designed not to impose exaggerated prices on the public, but to avoid the evils of price-cutting.

When the price is cut by one retailer the others are unable to sell at the normal price and refuse to stock the goods. The net effect is that the pricecutter has succeeded in diverting to hansel f a more or less substantial part of the advertising done by the manufacturer. The Committee, however, refrained from making any proposal. The report states: "That a man has the right to trade as he pleases. A manufacturer or a merchant may retrain to sell his goods to anyone who wished to buv them, or he may sell them on sm h conditions as he thinks fit to impose. Such a right of freedom of' contract ought not to ho withdrawn without sonic compelling reason.