THE HONEY INDUSTRY

Taranaki Daily News, 17 November 1926, Page 14

THE HONEY INDUSTRY

MARKETING METHODS REDUCING COSTS. EFF.CTENC Y OF - ADVERTISING. The Honey Control Board hereby issues the following report: The first meeting of the board was held on February 25. 1925. The board at thia meeting assumed limited control over all honey exported to the United Kingdom and Europe, this control requiring that such honey should be shipped to and distributed by one agent only. Messrs. A. J. Mills and Co., of 14 Tooley Street, London, 5.E.1., were appointed the board's agents for this purpose. The action of the board was designed, in so far as was expedient, to carry out the wishes of producers expressed in their request for a Honey Export Control Act, and their subsequent request that the Act be brought into force. The reason given in asking fw control was that the system of organised marketing which had voluntarily been followed had achieved success. This had been brought about in the specialising of New Zealand honey, firstly, by packing only a definite standard of quality; secondly, by retaining its identity in its retail distribution; thirdly, by keeping belowl standard qualities from table consumption; and fourthly, by extensive advertising and publicity work. This system of marketing has resulted in New Zealand honeys being sold at a considerable premium over competitive i honeys, a portion of which premium, in the ordinary course of events, being absorbed in the payment of advertising and distribution costs. The control taken has for its purpose the carrying out of the expressed wishes of the producers to have this system of marketing protected, the disorganisation of which could otherwise be brought about by shippers selling outside the organisation and creating a position whereby some would be paying all the costs of securing the enhanced price while others would be securing the full benefit of those prices, at the some time paying nothing towards the costs of maintaining the same. The costs of maintaining and extending the m| ket are distributed over all consignments to the extent that advertising charges are spread equally over all sales, the expenditure of one year being spread over the sales in that period, and also the costs of distribution, and control of distribution in 'the 5 per cent, commission allowed to the agents. Exporters are financed as required by advances made by the agents’ New Zealand Representative against documents. Limited control has operat-’ ed over the 1925 and 1926 export sea- . sons. The producers who were exportT ing under a voluntary control through their own association were in no wise affected, when control came into operation, they having borne the costs of organised marketing througnout. The spreading of advertising charges and the extra commission over all consignments, however, increased the costs of marketing to shippers outside of the association to that extent. The number of shippers, therefore, at footed by control are very few. in 1925 they represented 2.8 per cent, of the producers exporting, their honey representing 4.6 per cent, of the whole. In 1926 the figures were 1.89 per cent and 2.19 per cent respectively. _ That organised marketing has gained a premium for New Zealand honey, and that therefore the costs of maintaining the same should be equitably distributed is shown in the following figures: Sales of New Zealand honey for August were made at from 60s to 80s per cwt. Quotations for the same month for Canadian honey are 40s to 5Cs per cwt., Californian at 47s to 58s and Jamaican 42s to 495. . Prior to organised marketing New Zealand honey did not realise equal to Californian or Jamaican. While a considerable portion of the premium obtained has been absorbed by advertising charges, the balance represents a considerable margin on the returns of our competitors.* The total exports for 19X5 amounted to 755 tons, some 265 tons more than for 1924. The export for 1926 was 550 tons, the reduction in the amount being due to an adverse season over portions of the Dominion. Gales of 1924 season were completed In Oetobei. 192 u. On October 31, 1926, only 99 of 1925 honey remained unsold, ibis position is very satistactory, as the export for 1925 made it necessary »o find a market for over one third more honey than for the previous year Sales, therefore, from October till October had increased from 517 tons in 1924-25 to 68G tons sold over, the same period for 1925-2 G. With » lesser export for 1986 there should be no difficulty in clearing the whole of our stocks on hand in the ensuing 12 months. M bile the economic conditions in the United Kingdom have of late been unsatisfactory and have considerably affected the prices of Dominion products, we have been able up to the present to maintain our prices and make satisfactory sales. This is highly satisfactory especially 8 o as Northern Europe has for the second season running had exceptionally good crops, and Southern California's crop is 140 per cent, of the previous year, and their local price is running one to two cents lower than last year. Canada, on the other band, is reported to have only 7U per cent, of the crop of last year. Business in Germany is developing satisfactorily. Since July last some 54 tone have been sold, all ‘in retail packages. This progress in the introduction of our honey into Central Europe is satisfactory in view of the fact that New Zealand honey pays a duty of 40 marks per 190 kilos, or roughly 20s per c.wt. It is now proposed that the board investigates the marketing conditions with a view to ascertaining if costs of marketing can be reduced while at tho same time retaining a proportionate amount of the advantages gained and also provide for the disposal of our increasing production.