PRICE OF TEA

Ashburton Guardian, Volume 60, Issue 32, 17 November 1939, Page 3

PRICE OF TEA

MINISTER EXPLAINS INCREASE. I - FRESH STOCKS ARRIVING. (Per Press Association). WELLINGTON, November 16. “There are ample supplies of tea for immediate needs in New Zealand,” said tile Minister for Industries and Commerce (the Hon. D. G. Sullivan) in a statement this evening. He added that the shortage experienced by retailers bad not been caused by any holding up of sterling supplies for the importation of tea. The Government had at all times made provision for the release of sterling for the purchase of tea, but it had no control o\ r er the output of Ceylon, 80 per cent, of which had been commandeered by the British Government.

Mr Sullivan added that an artificially stimulated demand—in plain language a panic demand for the purpose of hoarding—arose when hostilities broke out. Through this demand, stocks of tea were admittedly depleted at a much quicker rate than was normally the case. This doubtless contributed to the shortage of supplies released for retail sale.

Another factor for operating, said the Minister, was the commandeer by the British Government of 80 per cent, of the output of India and t Ceylon. This necessitated tbo cancellation of the tea sal§s, and it also had the effect of materially increasing prices. An adjustment as between Ceylon and. the British Government had now been made and tea' sales had been resumed.

To protect consumers, he said, the Price Stabilisation Regulations gazetted on September 1 fixed the price of tea, together with all prices at the level existing on August 31. Since that time, until the replenishment of stocks became necessary, the price remained

the same. The Minister then discussed the saving which had been effected to consumers by this action. If the Government had permitted tea to rise in price by 6d per lb, as had been done in Australia in the first week of the war, the public would have had to pay an additional £14,960 for the period between September 8 and October 5, and from September 8 to November 2, a total of £25,931 13s has been saved. Tea in store on September 8, added fiVlr Sullivan, was 2,485,7051 b. Because of the panic demand, it fell to 1,887,2821 bin a week. Subsequent weeks had shown a reduction to approximately 130,0001b.' Now stocks had to be replenished from overseas, and the increased overseas prices had to ‘be met, together with the added cost of freight and insurance. A,ter a careful investigation of all the factors, the Price Investigation Tribunal had agreed to increases covering the actual increase in cost and nothing else.

The Minister referred to the amicable relations between the Price Tribunal and the trade, and said that now that an increased price had been permitted, and the position clarified, stocks of tea should be available for retailers. The old stocks were depleted, but fresh stocks had arrived, or should arrive in the near future.