PRICE-CUTTING WAR

Hokitika Guardian, 4 March 1933, Page 6

PRICE-CUTTING WAR

TOBACCONISTS’ BELIEF PETITION

f kepdrt of committee

>V WELLINGTON, "February 28. t . Price-cutting' i-nSthe tobacconist business ivas the subject of a report by tie Industries and Commerce Committee of the House to-day, when it dealt ■ with; 131. petitions from, tobacconists iri >ali parts of the Dominion asking tljat cigars , and cigarettes •should be. removed from- the .schedule .-of’ tie Cpmmercial. Trusts Act. The f,committed was unanimously against i this proposal-, as’the legislation exists, - it was pointed out, for the- protection .of the pu-blio a® well as retailers, i However, it added a recommendation for Cabinet’s, consideration that the Government should make representations- to- all sections of the trade with a. view to. establishing more equitable trading conditions. WOULD NOT ACHIEVE OBJECT. The Hon. A. D ; McLeod, chairman of the committee,, explained that members. had given a good deal of attention. to the- petitions and they found .that the t tobacconist business was be- ,

-log carried .on under very difficult ,conditions, a great deal cl hardship i having , been caused, and many of the traders being- forced out of business through price-cutting, but the removal of tobacco from the Commercial Trusts Act would not achieve the objects of the petitioners. -Mr , Lee (Grey Lynn) ironically congratulated: the committee/ upon sidestepping the issue. Mr Harris (Waitemata) pointed out that the decision to retain tobacco in the schedule of the- Act would protect .tobacconists' front monopolistic pricefixing. There was a great deal of injustice through price-cutting by chain

. stores, though it was hut fair to- explain- that these establishments, because 1 of their,- big turnover and selling for cash, were selling at a, reasonable profit to - themselves.

I Mr Carr (Timara) expressed surprise at the last speaker’s suggestion, 'in view;' of figures in his possession ' showing that large stores sold tobacco at wholesale cost or very little above it. Many traders ran- tobacco as a side like, under-cutting legitimate tobacconists, who were being pushed right out. SHOULD PUT HOUSE IN ORDER. Mr Anseli , (Chalmers) said the committee had definite proof that -a.-'profit was being made by cut-rate .stores, and that many business men w°uld be glad to got an equal amount of profit. It felt, while sympathising Iwith the tobacconists ~that they should ;endeavour to put their own,' house in order.

Mr Savage (Auckland West) said that the rpmoval of tobacco from the schedule of the Act would place) retailers at the mercy of large combines.

.Price-cutting was the natural outcome 'of competitive conditions, but lie could not understand retailers asking .that minimum prices be fixed. Mr Smith (New Plymouth) sympathised with small retailers, hut suggested ’that they were partially to blame. They had a conference on the ‘question of'minimum prices some! years ago, hilt could, not maintain unanimity on. the matter. The report was adopted after the chairman of the committee, Mr McLeod, ; lmd informed the House that , two years, ago probably 2000 men had (been'engaged in the tobacconist business, hut that to-day a large percentage were among the unemployed.