FREEZING WORKS SALE.

Auckland Star, Volume LVII, Issue 19, 23 January 1926, Page 15

FREEZING WORKS SALE.

THE ANTI-TRUST LAW. jIEAT COMPANY'S SHEMMA. "EXCESSIVE DECENTRALISATION." The thorny question of the right (or lack of right) to sell freezing works to the best available buyer—in cases where it is in the interests of the owners to sell, or in the interests of their creditors to jell—has again confronted the Government (says the "Dominion , "). On the former occasion the buyer was the big overseas meat firm of Vestevs (or X elson Bros., as their agent)*, and the freezing works was that owned at Poverty Bay by the Poverty Bay Farmers' Meat Company, headed by "ilr. \V. D. Lysnar. The moving force behind the sale was not the Poverty Bay Farmers' Meat Company, but "its creditor, the National Bank of New Zealand. Extra License? In the present case the buyer is another big overseas meat firm, Borth.•vricks; and, on the vendors' side, the' company itself (Wellington Meat Export Company) and its shareholders desire the sale. In that respect the cases are not parallel, and they also differ in another important detail, in that Vesteys (Kelsons) were prepared in Poverty Bay to surrender an existing meat license of their own already held in the same district, in order to buy the Poverty Bay Farmers' Meat Comany's license and works. But so far as "is known, the proposed purchase by Borthwicks of the Wellington Meat Export Company's works is not qualified by any proposal" to surrender any existing license, and in that case the sale would mean —whst it did not mean in Poverty Bay —the acquiring by an overseas meat firm of an additional license. Oversea Interests in Freezing. That point might be deemed important by the Meat Producers' Board in dealing with Borthwicks' application for license, in view of the well-known and much-discussed powers that the law proTides to prevent the extension of oversea proprietary interests in freezing ■works. Colour is given - to this supposition by the fact that the application to the Meat Board for a license to Borthwicks —on which the sale of the Wellington Meat Export Company's undertaking depends—has not yet been granted by the Meat Producers' Board. It is even reported—though no official confirmation can be obtained—that the board has arrived at a decision not favourable to the application. And it is known that representatives of the (would-be) vendor company have inter- i viewed Ministers. A further interesting feature —though one poesibly without special significance —is that this important question is reaching its climax. Just a3 the Department of Agriculture—which administers the Government's relations with the Meat Producers' Board—is changing Ministers. Security and Credit Aspect. Opinions may differ as to the extent to which the situation is governed by the fact thfcit Vesteys' application (which was granted) did not increase the number of Vesteys' licenses. But if Borthwicks , ' application were refused on the ground that it would give an oversea firm an additional license, the gsneral question of the right of a meat-freezing company to sell to the best buyer would remain; and if a government, while not forbidding a sale, were to render it impossible by refusing a license to the buyer, the foreseen and the unforeseen reactions on the credit of meat-freezing undertakings and on the prospects of their shareholders could not be wholly disregarded. The question is a highly arguable one, and the commerical world will follow the present application with the same interest as it followed the Gisborne case, even though different circumstance may deprive the situation of the dramatic elements provided last year ky Mr. Lysnar and Mr. Nosworthy. It has been pointed out that acquisition of the works of the Wellington Meat Export .Company at Ngahauranga and Kakariki) would give Borthwicks a Wellington apex to their triangle, the baseline of .which may 'be drawn between their- Taranaki and Hawke's Bay works. Vesteys' holdings are in Hawke's Bay, Poverty Bay, and in. the neighbourhood of Auckland. The whole question of the alleged exttssive decentralisation of New Zealand meat-freezing industry, and of putting it on a sounder basis .of capital and credit, lies, back of the special measures of legal protection that the Government las endeavoured to* create as armour against trusts.