PRICE-CUTTING

Sun (Auckland), Volume IV, Issue 970, 13 May 1930, Page 11

PRICE-CUTTING

EFFECT ON GROCERS UNREST IN THE TRADE A review of the serious effect of price-cutting in the grocery trade was presented at a meeting of more than 300 Auckland city and suburban grocers, held last evening in the Lewis Eady Hall. The meeting:—easily the largest of its kind ever held in Auckland—was convened by the Auckland Master Grocers' Association, the president, Mr. vV. Curtis, presiding. “A good deal of unrest prevails in the trade because of unrestrained price-cutting." said the secretary, Mr. J. Heaton Barker. “As a result, equality of opportunity has been destroyed. It is the duty of the meeting to decide what is required to restore than equality." The general opinion was that never in the history of the trade in New Zealand had conditions been so bad, he continued. In reply to a question as to the contributing factor, he replied: ■‘Undoubtedly it is price-cutting." In a measure, he attributed the present conditions to changed conditions of trading, the cash-and-carry system having become in evidence, but equally were they due to the desire manifested by some to obtain business at any cost. In a recent address, entitled “Business Ethics,” Mr. E. C. Cutten had said: “If, under ordinary circumstances you fail to make a profit, and if you sell goods below the cost of production. you are not living up to the high ideals of business ethics because, if you sell goods below cost, you are depriving others of the opportunity of doing profitable business and depriving their employees of their just right to safe and continuous employment. Profit is tiie legitimate and just reward of service.” UNFAIR TRADE Mr. Barker stressed the point that the selling of goods below cost for the purpose of injuring a competitor or with the object of lessening competition was an unfair trade practice. Particular emphasis was laid on the fact that the trade did not object to differentiating between the various methods cf trading as between the cash-and-carry stores and the store that gave credit and service. Unfortunately the chain stores, because of their ability to buy in large quantities, were in a position to obtain wholesale discounts which were availed of for price-cutting purposes, thus making it impossible for the small trader to exist. At this point a member of the audience stated that, at present, his position was one bordering on bankruptcy, this because of unfair competition on the of others in the trade. REPEAL THE ACT A resolution was unanimously passed calling upon the Government to repeal the Cost of Living Act, 1915, the point being made that it was purely a war measure and altogether unnecessary in view of the Board of Trade Act, 1919. Representatives of the Northern Pharmaceutical Association were present, and its president, Mr. E. Smith, assured the meeting of its full approval of the grocers’ point of view'. He also spoke of the efforts made some years ago to form a Proprietary Articles Trade Protection Association with the object of stabilising prices. One speaker very strongly stressed the point that inasmuch as the employees were bound to receive a minimum wage, according to their industrial award, it was only fair that those responsible for paying those wages should have an equal opportunity to secure a reasonable return for the capital and labour employed in their businesses. At the close of the meeting a. number of manufacturers expressed sympathy with the meeting’s views and assured the retail grocers of their desire to co-operate with them in their endeavour to secure reasonable returns. It is probable that a further meeting will be held on May 26, when a large attendance is expected.