DAIRY BUSINESS.

Shannon News, 13 February 1925, Page 4

DAIRY BUSINESS.

# The Marketing System. "FIERCE COMPETITION AHEAD." "MUST CONCENTRATE ON BRITAIN." Tlie report of the Overseas Delegation- of the New Zealand Dairy Produce Control Board was available yesterday. The delegates were Messrs. W. Grounds, J. R. Thacker, and W. C. Motion. The report is long, and contains much matter.of technical inter, est to milk production, and the manufacturing of butter and chese. It also deals with competition wilth which New Zealand dairy produce has to j contend in, the British markets. I The delegates hold that "Whatever the future may have in store in the creation of new markets, it is clear that we need at present to concentrate upon Great Britain. America j will display an occasional demand; I Germany, too, with her industrial reestablishment, will affect the general position by her increased demands. Inquiries are now being- received for New Zealand butter from that quar. ter, and arrangements have been made for a supply to be available. . . . -Deprived of the dairy products of that portion of the Schleswig-Holstein, which has now been restored to the Danes, she will doubtless, for some years, require supplies from outside sources. The increasing production of several of the European dairy coun. tries with whom Germany will be anxiou s to sell her industrial productions will almost certainly look after ner increased demands for food supplies." High Quality Essential. "New Zealand has established a Ktrong position upon the British market by reason of the general excel, lence of her supplies. This is not saying that all arc equally good, or that there is no room for improvement. . . Notwithstanding the few exceptions, the Danish and New Zealand stand in a class by themselves at the head of imported butters, while many dis. criminating buyers assert that New Zealand cheese has now got definitely ahead of Canadian. Only one thing can enable us to maintain our position; the supply of a uniformly good article. During the last season large supplies of Siberian butter came to hand, which it was generally expected would break the market, but it was mostly of secondary quality. New Zealand prices were consequently maintained."

The board then discusses the importers. "Some of the importers have been connected with the New Zealand trade since its inception, while others have been associated with it for many years. That they have pros, pered in the business of their choice Is clearly apparent. If further evidence of this were required, it is forthcoming in the number of provision merchants who desire to become im. porters. Many pictures have been drawn of these importers for the guidance or confusion of New Zealand dairy farmers." x In Tooley Street. "Having seen 'Tooley Street'—-by which term importers are usually personified in New Zealand —both individually and collectively, and discuss, ed with them" everything we thought of immediate interest to the industry, w e can only report that we found them to be ordinary keen business men, who concentrate upon their business, keeping in touch with all the widespread influences upon their mar. ket, and doing what in their judgment is best for their consigning factories, while they quite naturally expect to get a fair turnover for themselves out of the transaction .... Some of the members have made special studies of important allied subjects, their experiences and conclusions being freely placed at our disposal. Throughout the whole of our investigations everything possible was done for us by the importers. They each expressed their desire to assist in whatever was decided upon by the board in the inter. ests of Ihe producers. • "We would further add our opinion that possibly no other body of men could have done better under the system prcvuiiiug. If the system pro. vided them with alluring opportunities, they cannot be criticised for embracing' them."

Tin; delegates th<m deal in detail ! with the wholesale and chain-store ' system of retailing, by which anything- from twonty to several hundreds of shops are controlled by one com. pany. These organisations, as the delesal.cs found, "desire to buy as near to "the producer as possible. F.o.b. sales made through various agencies have frequently been on their account. 1 ' Reference is made to the handling of New Zealand dairy produce by the New Zealand Co-opera-tive Dairy Company, the New Zealand Marketing Association, Overseas Fed. orated Farmers, and other agencies for distributing. As for the firstnamed, the delegates feel "that had it not been for their stabilising influences the fluctuations (of prices) would have been greater." "Room For the Best." References are made to condition of produce on arrival with the remark: —-'There is plenty of room on the British market for the best, but little room for inferior qualities. If produce is shipped in good condition it will open up so." Criticisms are made by the delegates upon unsuitable packages used in export of dairy produces; use of preservatives; date branding; whey butter; temperature at which cheese should be carried; loss of weight, in cheese shipped; ana other technical subjects. The delegates hold "the standardisation of all milk for rheese.making is worthy of full and careful consideration." Trade With the Provinces. Trade with other ports as well as London is recommended on the following grounds:— "In addition to the Improved dock

ana cold storage facilities offered at the provincial ports, the merchants of these centres are very keen to get regular supplies direct t 6 their porta. At present all supplies by rail from I*on. don to Bristol pay railway freightage of 1/6 per cwt. Manchester and Liverpool 2/6, and Glasgow 3/-. This has to be added to the price and foxms a permanent disability in any endeav. our to foster a desire to increase their business, we discern an increasing desire to develop business with the Colonies. Such movements develop slowly in Britain, but there is no doubt of the trend inthat direction. In some of these provincial centres London importers have established branches of their | business. Some have agents working on their behalf. In some of these cases the* agent is paid a half per cent, commission on the business done. We think that a satisfactory development of trade cannot be expected when remuneration is arranged on such basis. The selection of a few sound, keen houses in each of these in addition to the London, with offices already established, would add zest to the propaganda required for developing trade in these centres. We are convinced the time is ripe for such a step. It can only be successfully accomplished under the controlling hand of the board. : # "We recommend that initially a regular monthly delivery service be established with each of these provincial ports; that 'a quantity estimated to supply the requirements of each district for a month be shipped; that supplies be placed in cold storage and distributed through merchants under the direction of the board. All these possibilities have been discusteed with the leading merchants, and we are sure they will readily assist in the establishment of such a scheme. The uncertainty regarding supplies and steamers makes it impossible at present for either factory or merchant to develop this business, while a regular service of steamers can only be expected if we organise to fill them." The Danes.

A'very full account is given of the Danish system of disposing of dairy produce. The delegates report:—"We met leaders of the dairy industry, co- ' operative finance, heads of experimental stations, professors of dairying, and export merchants. They aie keenly alive to probable marketing difficulties. The main desire of their industry is the maintenance of reasonably stable prices at a profitable level. In this they recognised that our interests are similar. But they also recognise that in the last analysis the fittest must survive. No attempt to conceal our national rivalry would have been of any use, even if we could have thought of such a course. They understand the rivalry, but also recognise the advantage of frank consultations between representatives of the two interests. We review our conversations with them with satisfaction. We met men of high integrity and capacity, and we feel sure that recurring conversations between them and representatives of the board will be of advantage to both." Holland, Latvia, Finland, Ireland, Siberia, and Argentine, as rival sources of supply are fully considered and dealt with in the report.

"Not Cricket." With regard to marine insurance, the delegates report: "Our first investigations convinced us of the advantage to the industry of consolidating our insurance, and having it covered by a comprehensive policy arranged by the board. When the information of the board's final decision was cabled to London a mild storm arose among the underwriters at Lloyds. They interviewed the High Commissioner, and desired him to cable to New Zealand their objections to the creation of a monopoly, etc. An interview was sought with ourselves by the chairman and secretary of Lloyds. We met them. Until then they did not know that several of the London houses represented at Lloyds had been asked to quote for the whole business, and had tendered a price which had been beaten by the New Zealand companies. We impressed upon them that it was scarcely "cricket" to be talking about 'creating monopolies,' when some of their members had been urging its advantages and bad been endeavouring to secure it."

Shipping matter* are briefly dealt with, but the possibility of establishment of a specialised service for the dairy industry of fully refrigerated steamers and other matters arc contained in a confidental. report furnished by the delegates to the board. Conclusions. Finally, reviewing the whole position, the delegates wish to reiterate their opinion that "a period of fierce competition is immediately ahead of us. We have no doubt that this can be successfully met, but the fullest production of high-grade quality must be aimed at in every department. Wasteful methods or anything contributing to low quality production must be cut out. To assist in this work a wellequipped laboratory is essential. "We thing that the board should undertake the responsibility of all sales and establish a London office. A London commercial manager should bt appointed, and two very carefully selected men should be sent from New Zealand, one associated with butter and one with cheese, whose special duties would be to keep in touch with their respective branches of the industry, the condition of produce on arrival, the maintenance of grades, etc. "Every sound firm or organisation wishing to serve as distributors of New Zealand produce should be given an opportunity of proving their sales capacity. Proved sales capacity would then determine the measure of continued opportunity for them. This method would provide much more real competition than anything that exists at present. "London being the nerve centre of , our marketing operations, the London office should be given the responsibil- j ity of collecting all data relating to ]

marketing problems, which, would include production and disposition in all other dairy countries. "We recommend that a national brand be selected, and that it be placed upon one end of each butter-box and cheese crate containing a firstgrade product. The factory's brand should be placed on the other end. No cheese or butter should be exported in cases bearing the "national brand below first grade quality. All produce graded 92 points and over should have an additional superfine brand at the "national" end of the case.

"It should be the aim of the board to have both cheese and butter available at all times of the year. The probable demand at different seasoTis cannot be prejudged at this distance. We consider this course will certainly increase consumption and improve opposition on the market. Actual quantities will, need to be assessed by the .London management according to changing- circumstances. With the competition we foresee it will be quite futile to expect that any stereotype method will meet the necessities of the position. "Risks are involved in any decision, but greater risks lie for the industry in a continuance of the present system." The delegates record appreciation 01' the assistance given by the High Commissioner and his staff, and Mr. Drew, of the Publicity Department.