N.Z. CO-OP. DAIRY CO.

Hauraki Plains Gazette, Volume XXXV, Issue 4720, 4 July 1924, Page 3

N.Z. CO-OP. DAIRY CO.

MEETING OF SUPPLIERS. REPORT OF YEAR’S WORKING. The annual district meeting of Paeroa suppliers to the N.Z. Co-op. Dairy Co Ltd., was held in the Returned Soldiers’ Club, Paeroa, on Wednesday morning. Mr G. Buchanan (local director) presided, and with him were Messrs W. E. Hale, a director, A. .1. Sinclair, assistant general manager, and W. H. Blake way, branch secretary. There was an attendance of about forty suppliers. Mr Buchanan, in opening, stated that the meeting had been called to hear an address by Mr Sinclair on the year's operations in dealing with butter, and also to give suppliers an opportunity to gain information concerning the company’s marketing arrangements. Mr A. J. Sinclair submitted a detailed report of the company’s operations for the past year. He dealt mainly with the marketing of the company's produce,’and mentioned that 20,660 tons of butter had been manufactured. Reports were submitted from Mr J. B. Wright, the company’s London .manager. WEAKNESSES OF MARKETING. Mr Sinclair pointed out in detail the weaknesses of the present system of marketing New Zealand produce in the United Kingdom owing to the dual policy adopted by dairy companies of New Zealand under which some sold outputs f.o.b. and others shipped their produce Home on consignment. He submitted detailed reports showing that this policy inflicted enormous losses tO'the butter producers in New Zealand, and mentioned that the delegation from the Dairy Produce Export Conti o'. Board was now in the United Kingdom collecting evidence concerning marketing weaknesses and how they could best be rectified. The speaker was strongly of opinion that until the dairy farmers of New Zealand had solved three problems—(l) compulsory control of all produce exported from New Zealand; (2) the elimination of any agents in Tooley ! Street who speculated in New Zealand . produce ; and (3) cutting out of all forward sale of produce by New Zealand dairy companies to speculative agentc—there was no hope of getting <m to the same efficient marketing basis as the Danes. DANISH METHODS. Mr Sinclair outlined very fully the scientific methods of marketing dairy produce adopted by the Danes. He claimed that New Zealand butter was equal in quality to Danish butter, and that it was almost entirely due to better marketing methods that the Dines were at times able to secure 35s and 40s a cwt. riiore than New Zealand producers. The speaker mentioned that last week the company’s London manager had cabled that Anchor brand butter was beating the Danish produce by 3s a cwt., and explained the/reason for this. A report was read from an eminent Dane who was vitally interested in the marketjug of Danish produce at Home to the effect, that the Danes desired to cooperate with the New Zealand dairy farmers. The speaker Was confident that now a proper organisation had been set up by New Zealand producers the Control Board would, be able to evdve a scheme of co-operation with Denmark. PRICES. A detailed report showing each week the quantities of butter sold by the company in the United Kingdom .and the prices realised was read. It was quite evident that the suppliers were gratified to learn that the butter sold by the company up to the end of February had netted Is 8d f.o.b. Auckland. Mr Sinclair stressed the fact that this had been obtained br consigning, and contrasted that figure with’ the prices received by those dairy companies who sold their earlv season’s output at Is 6d f.o.b. He appealed to the dairy farmerg to support the consignment policy, even though it had one temporary drawback, which was that a consigning company received only a draw against the pjoduce as it was shipped, and had, tnerefore, to make a moderate monthly advance payment) to its suppliers, whereas a selling company received the whole of the cash immediately and was, therefore, in a position K to make a bigger monthly payment. Mr Sinclair contended, however, that when the company sold its produce it did not make an advance payment, but that the payment which the supplier received on the 20th of the month following the .sale represented all he was entitled to expect. Nor would the supplier, In his opinion, get anything at the end of the season were it not for the fact that the cooperative companies paid out a good price and forced other companies to follow suit. Mr Sinclair stated that his company had still to sell 4000 tons •of last season’s produce, and although it wa, impossible at the moment to / 'forecast the total payment for the reason he was confident that when ahe final figures went up the suppliers would have every reason to be gratified with the result. CREAM CARTAGE. „ During the course of the meeting * Mr Sinclair submitted the company’s new scheme for the collection of cream. He stated that the company would collect all cream within a radius of . 12 miles from a railway station or from a factory at a guarantees rate of %d pei lb butter-fat, and went into details showing how this would be done. The company would collect cream anj’ distance from the factory, but it would be on an understanding that all suppliers over the 12-mile radius would bear the whole cost of getting their cream to that point, from where they would then participate in the flat rate of %d per lb. Mr Sinclair also outlined the reason why the directors had decided to eliminate the %d per lb paid as direct delivery premium. The speaker staled that he had addressed over meetings of suppliers during the ? last two months, and was glad that the new scheme had been almost unanimously endorsed, because when the details were explained the suppliers recognised that it was an hon-

est attempt to solve a very difficult problem.

COAL MINE AND BOX FACTORY. Some details were submitted showing tl.e »avhig effected in the company’s operation because of cheap coal and cheaper butter boxes, Mr Sinclair maintained that the coal mine at Glen Afton was the greatest asset possessed by any dairv company in New Zealand. Before asking for questions the chairman called on Mr W. E. Hale to address the meeting. Mr Hale stated that the past season had been a very indifferent one for marketing dairy produce, but he hoped that the coming season would be more satisfactory. There had been a. decrease in. the amount of butter manufactured of about 1786 tons, which was hardly to be wondered at, considering the severity of last winter followed by 'a hard winter this year. It was pleasing to state that while butter had decreased the manufacture of cheese had increased by 524 tons to the end of April. The total decrease in butter-fat handled was iftearly 5 per cent, on last year’s output. This season, while an all-round increase was anticipated, probably some of the Hauraki Plains settiers would show from 20 to 25 per cent, decrease owing to the recent bad weather. The company as a. whole compared favourably with other companies in the Manawatu and Taranaki, where a decrease of from 8 to 9 per cent, was reported. Mr Hale said that there had been a marked decrease in the amount of superfine supplied—nearly 2 per cent.—which was caused to a large degree by bad climatic conditions. He stressed the importance of aiming at producing superfine, as only by such means could New Zealand compete in the world’s markets successfully. An innovation had been instituted by the company's London manager by putting up .superfine butter in attractively made cartons (a sample of which was produced) and placing it on the market at Home. By such means people were able to buy and realise that they were getting the best procurable by buying Anchor brand butter, and the retail trade had been built up to over ten tons a week. ’ Mr Hale intimated that representations were being made to have the points of. grading cream at the fatcories increased oy one per cent., so as to arrive, if possible, at a higher-class article. Mr G. Buchanan explained that at the last meeting of the National Dairv Association in Auckland several dairy companies had asked that the Government be requested to make cream grading compulsory, and that the Dairy Division should take up the matter and have licensed graders supplied to companies. Under this system the graders, being Government officials, would be disinterested parties who could be relied on to give unbiased tests, and there would be no incentive to under or over-grade. Mr Buchanan explained that the reason why Paeroa had been graded lower was because of a defect >n the pasteuriser which could not be detected until the season had eased off sufficiently to allow of the machinery being taken to pieces and the fault adjusted. The speaker counselled the suppliers to stick together and where possible to counteract propaganda by proprietary concerns. Their own company was able to manufacture butter cheaper than any other dairying concern in New Zealand, the overhead charges being less than per lb butterfat.

Dealing with butter containers, Mr Buchanan said that the company was producing its own boxes at is 6d each, as against 2s lOd formerly paid to outside manufacturers. The coalmine at Glen Afton was also a valuable asset, and its output was some 70,000 tons. All the company’s factories were receiving supplies from the mine at a uniform rate of 17s 6d a ton, and shareholders were also able to purchase a good-quality house coal at a fixed price. At regular intervals adjustments were made and the shareholders received substantial rebates. The speaker said that there would ben no further deduction for coal and timber shares where shareholders bad paid up Kd per lb for three years. Where new suppliers came into the company a deduction of %d would be made over a period of six years. QUESTIONS AND ANSWERS. Mr T. P. Vuglar asked if the company nad considered the advisability of consigning its produce direct to London, say, to the Bank of New Zealand, and to allow the London manager to effect the sale and distribution, thereby reducing the consignment and commission charges and the competition among the Tooley Street merchants. Mr Sinclair replied that the matter had been fully gone into and had been found to be impracticable. The price that the consumer paid was fixed by the company, and the Toolej r Street merchants only acted as buffers. Mr W. D. Keys asked if the'company had gone into the Danish system of finance. Mr Sinclair replied that the Danish producers had built up a reserve of over a million sterling, but he was doubtful if New- Zealand could do that at present. However, the system was being thoroughly investigated. Mr Vuglar said he had lead in an Auckland daily newspaper that Australian butter was better than that of New Zealand, and he asked for information on the matter. Mr Sinclair said that such propaganda, he believed, had been circulated by a Mr Meares, who was interested in an enormous Australian concern known as the Coastal Farmers’ Society. Mr Meares had recently visited New Zealand and had been courteously treated by the company and supplied with all information concerning the cream grading system and other matters. As a result he had returned to Australia and massed meeting of fanners had been held and pressure was being brought to bear on the Commonwealth Government to institute compulsory grading. It was well known that, generally, the Australians had been content to accept 10s a cwt. less for their butter than New Zealanders in the past. There was such a small quantity of superfine that there was no need to fear serious

compeition provided New Zealand maintained its standard.

Mr Vuglar asked why there should be difficulty in procuring New Zealand butter at Home. He had been told that it was retailed as colonial butter.

In reply Mr Buchanan said that mattei would be gone into by the Dairy Export Control Board, which would endeavour to arrive at a uniform urand for all New Zealand butter.

Mr Vuglar said he took exception to the remarks made about the grading at the Paeroa factory last season. Mi 1 Hale said that' no aspersions had been cast on the Paeroa factory or its manager, but it was a matter for regret that it had graded out two per cent, lower.

Mr J. Howie asked how it could be accounted for when cream one week would be graded superfine and the following week perhaps the grading would be lower, although the farmer had apparently exercised the same care in handling the cream. Mr Sinclair said he thought that climatic condition had something 'o do with the change, and. also change of pasture and turnips. Experience had proved that the best way to feed turnips to dairy stock wa.s to pull the turnips and allow them to lie on the ground for twenty-four hours before feeding them to cows. If the turnips could be halved the risk of-flavoured cream would be reduced to a minimum.

Mr Vuglar said that as there was every prospect of the company enjoying a good season he thought the staff should receive some recognition of their services in the form of a bonus. Mr Buchanan replied by saying that all staff matters were left in the hands of Mr Goodfellow. Personally he considered that the staff were well paid tor the services rendered. The company realised that it had a loyal and efficient staff, but it should be remembered that their salaries were regular, despite the good or bad seasons, whereas the produceis had to face all conditions.

Mr Vuglar then moved that it be a recommendation tp the directors that the Paeroa branch office staff be granted a bonus of 5 per cent. »n their salaries.

Seconded by Mr Howie and carried. Mr Howie asked how was it that the High Commissioner’s cables did not always agree with those sent out by the company’s London manager.

Mr Sinclair explained that the High Commissioner quoted the prices ruling for butter from certain countries, and then quotations were given for choicest qualities , which included Anchor brand.

Mr N. R. Robson asked what steps the company had taken to market produce in the East. Mr Sinclair stated that reliable agents were established in Java, Singapore, and Japan, and the returns from the sale of produce in the Far East, as far as concerned the company, exceeded (-100,000 to date. LOCAL COMMITTEES. The following suppliers’ committees were elected : Paeroa.—-Messrs Vuglar (convener) and F. Lewis. Tirohia. —Messrs W. F. North (convener), B. E. Veale, H. P. Gillard. Kou ata. —Messrs P. R. Hubbard (convener), J. Howie, and N.R. Robson. A vote of thanks to Messrs Sinclair, Buchanan, and Hale, and a resolution expressing confidence in the and management, were carried unanimously.