PRIMARY PRODUCTS

Waipukurau Press, Volume XXII, Issue 20, 18 February 1927, Page 3

PRIMARY PRODUCTS

dairy control. i SCOTTISH CBITICISM. In an open letter, under date December 30th, to the producers of butter and cheese in New Zealand, a number of -larger-firms have criticised dairy control in the following terms: — > “The New Zealand Dairy Produce Board has now been operating for a few months: and it is possible to form an estimate of its work, and how far it has been successful ill attaining the objects which it set out to achieve. We consider that several serious defects, and also ill considered favouritism, as between different sections of the. trade, characterise the system, and wo are convinced that, if persisted in, these will have a detrimental effect on the sale of New Zealand dairy produce in this country, and consequently on the returns received by the New Zealand producer.

The Board fix.prices at which their agents, or allottees, sell to us in the large blocks which we require, they also fix a price at which the agents or allottees, sell to retailers,. the difference between these prices is\3/- per cwt. The allottees’ price to retailers, being an official figure, automatically becomes the price at which we must sell to retailors, thus leaving a gross margin of 3/ per cwt., equal, at .present values, to If per cent, to cover all charges for the services already enumerated, and. also to leave a margin for interest on Capital and profit. We would mention that under Government control, after exhaustive enquiry, the margin fixed for all services of wholesome distribution was 5 per cent and in the case of large per cent. The margin of 3/ being an impossible one on which to. continue distributing we are left in a quandary. One obvious course is to cease pushing the sale of Now Zealand produce altogether, and to bend all our energies towards selling other butter and cheese on which we can obtain a margin to meet the costs of our business. There are plenty such available: Danish, Irish, Swedish, Canadian, Friesland and Finnish, and to a less extent, Australian and Argentine butters are being pushed insistently, and the makers are putting forward every effort to help and encourage us to market their goods. As already stated we arc the channel of distribution for. Scotland, no other section of the trade has distributive organisation. and there is little doubt that, if we pursued this-course, we ■would to a large extent reduce the demand and consumption of New Zealand produce throughout. Scotland. We have, however, taken a pride in building up the connection for New’ Zealand dairy produce, anfl wo desire, and mean to continue handling it, so long as we can entertain expectation that the services which, we have rendered in the past, and .still do-render, -will ultimately receive recognition. In this difficult position we considered that the proper course in the first instance was to turn to the London Agency of the Board, and we have done so. We sent a considered statement of our case on the lines set out above and proposing that three of four members should wait upon the Board in London, and endeavour to come to a working arrangement. The reply of the Board is to the effect that after considering all we say, they do not propose to interfere. The only suggestion they offer is that: —“The Wholesaler has got the benefit of extra profits obtained by purchasing in a suitable market.” We interpret this as indicating that/we should lay in large stocks when prices are low, hold them for an advance and so secure our profit. Our system has consistently been to buy at market price, sell all the time with a margin to. cover our costs, and we are not prepared to change over to a system of speculating in New Zealand dairy products, even at the suggestion of the London Board. Our impression was that the objects of .the Board were chiefly three: — (1) To elinminate speculation. (.2) To stabilize prices. (3) To encourage the steady flow oi New Zealand produce through the legitimate established channels of disti” bution. Tho nett results of the efforts «'■ far are:— (1) No efficient safeguards again speculation; it can be shown that s-'j ulation has been encouraged by Um : ; munity from risk which any or agent of the Board desiring to sr ulate, will enjoy under the system. (2) In the short trial of the Pnar'” operations, prices have fluctuated to w sxtent seldom experienced under open trading. -(3) The Board have wantonly -- without cause or reason, ar/r.gc-i- ;

the overwhelming majority of these traders, namely the wholesalers, who have built up and who -carry on the trade in New Zealand butter and cheese. It is our considered opinion that the present methods of the Board, however well intentioned they may be, must result in serious set back To New Zealand produce in this market, and to returns being obtained by the New Zealand producer less favourable than he deserves, and in our opinion, loss than he is entitled to receive. * Signed: James Davidson and Co., Jahn Laird and Co., James Leggat and Co.. Alex Osborne and Sons, John E’tchie and Sons (All of Glasgow).”