THE PRICE OF TEA.

Taranaki Daily News, 6 May 1922, Page 4

THE PRICE OF TEA.

REDUCTION NOT EXPECTED. INCREASE IN CONSUMPTION. The Minister for Customs, Hon. W. Downie Stewart, on his return from Aub- f tralia, said the agreement made regarding re-exports was important since it applied to tea and other goods tliat were imported into New Zealand to a large extent through Australia. Tea came to New Zealand from Ceylon and India, which, as British possessions, were entitled to the preferential tariff of 3d per lb. for bulk teas, and 5d for packets, but much of this tea passed through Australia, where it had to pay an additional duty of 2d per lb. This extra 2d was a charge upon the New Zealand consumers, and it had the effect of destroying the preference since it placed Ceylon and Indian tea on the same basis as Java tea. The arrangement proposed by the Minister will restore the British preference. A New Plymouth merchant, speaking to a Daily News reporter yesterday, said the prices for the best brands of tea were still firm and there was no reason to expect a reduction. One of the principal reasons for this was greater consumption. America, for instance, had since the war become a greater teadrrnking nation than formerly, and this was attributed to the custom being brought to the country by her soldiers who served in Europe. To-day, he said, America was consuming about fifty times more tea than in pre-war days, and the effect of this on the world’s markets count be readily understood.

“There seems to be a misconception with regard to the effect on tea prices, of the proposed Order-in-Council, whereby goods of British origin in transit through Australia or re-exported from that country to New Zealand, are to cease being subject to the excess tariff/’ , said the merchant. “Paragraphs are go- m ing the Tounds of the press that may lead the public to expect a reduction of 2d per lb; in fact some papers say so definitely. While it is true that the r great bulk of Ceylon and Indian tea for New Zealand is transhipped in Australia, 1c is quite incorrect to say that it is, on this account, subject to the 5d per lb duty. The duty on British tea is 7d per lb, and this is all we have been paying on shipments invoiced from Ceylon and India, whether transhipped in Australia or not. The confusion has apparently arisen through the fact that when the tariff was revised last year Australia was placed on the ‘extreme* list, and if merchants import Ceylon or other British tea from Australian houses they must pay 5d per lb. duty.” The merchant added that the obvious result was that the trade with Australian firms fell away, as buyers placed their indents direct with the exporters in the country of origin, bo the public was not affected by this extra 2d per lb.

The new arrangements will enable Australian merchants to again compete for the New Zealand trade, but thia competition will not materially affect the price to oe paid by the consumer.