Price-fixation Held to be Public Danger

Sun (Auckland), Volume 1, Issue 31, 29 April 1927, Page 1

Price-fixation Held to be Public Danger

PROPRIETARY ARTICLES REPORT OF COMMITTEE (From Our Resident Reporter.} WELLINGTON, Thursday. The majority of the committee believes that the proposals of the Proprietary Articles Trade Association constitute a danger to the public, are too far-reaching in effect, and are not justifiable under the existing conditions. The element of force obtained by the boycott is a weapon which no body of citizns could use without coming sooner or later into serious conflict with public opinion. The possibility of abuse and private vengeance cannot be ignored.

This clause sums up the recommendation "of the commission which inquired into operations in New Zealand of the Proprietary Articles Trade Association, which sought to fix retail prices of certain goods. The majority of members saw no grounds for objecting to price-cutting which formed price reductions based upon certain savings in the cost of distribution, of sale economies, or advantages in buiying or trading or financial reasons, but considered that sales below cost, having an objective of attracting custom, was an evil, and that, like its converse selling of goods at unreasonably high rates was detrimental to public interest. Nothing should be done, the report says, to limit the power of traders to bring producer and consumer as close together as circumstances will allow. While some improvement has been made in recent years in the Dominion in the retail and distributive services there is a continuous need for progress in that matter, and the experience of other countries indicates the possibilities of much greater improvements, as for example in increased adoption of the system of grocerterias. The Board of Trade Act gives power for the making of regulations for the suppression of methods of competition, trading or business which are considered to be unfair or prejudicial to public welfare, and further of industries and economic welfare of gives power to maintain the prosperity the Dominion, the committee considers it unnecessary, in view of the limited extent to which harmful pricecutting is practised. “We consider the position adequately safeguarded by the powers of investigation contained in the Board of Trade Act,” says the report, “and suggest that in any cases where traders or manufacturers feel aggrieved by selling goods below cost the department should be asked to make such investigation as in the case appears necessary.” While operations of the association might be to benefit certain (mainly overseas) manufacturers, wholesalers and certain retailers, the committee cannot overlook the effects on the public, the word “public” being interpreted in the widest sense. The majority considers that the association is a combination detrimental to efficienej’ in distribution and is likely to unduly encourage the credit system, is dangerous to the public interest and generally retrogressive. It therefore recommends that, if necessary, the Government should arrange for the making of regulations to prevent the association operating in New Zealand. The committee consisted of Messrs. W. B. Montgomery, ex controller of Customs; W. R. Hayward, manufacturer, of Dunedin; M. J. Reardon, ex workers’ representative on the Arbitration Court; and J. W. Collins, secretary of Department of Industries and Commerce.

Mr. Hayward disagreed with the finding, considering that the manufacturer has the right to state at what price and on what conditions his goods are to be resold, otherwise his business may be much damaged and his product may even be driven off the market. He believed that any Government attempt at suppression of the P.A.T.A. would be difficult to enforce and would hamper business, manufacturer and trader.