MARKETING OF N.Z. DAIRY PRODUCE.

Auckland Star, Volume LXVI, Issue 223, 20 September 1935, Page 8

MARKETING OF N.Z. DAIRY PRODUCE.

REORGANISING PLAN.

Dairy Board Adopts District Group Scheme.

BRANDS FOR EACH AREA. (By Telegraph.—Own Correspondent.) WELLINGTON, this day. Far-reaching proposals to regulate and reorganise the marketing of New Zealand dairy produce were adopted yesterday at the annual Dominion conference of the New Zealand Dairy Board. The recommendations followed the lines of a comprehensive report which was presented to the conference by the London manager of the board, Mr. H. E. Davis, with confirmatory comment by the board's chairman, Mr. A. J. Murdoch, M.P. The new policy will be in force from August 1, 1930, after the termination of the existing agreement between the board and the London Importers' Association at the end of July of that year. The essential provisions of the new plan are:—

The establishment of a group marketing system, the produce of eael- group to be sold in London or elsewhere under an indiyidual brand. Produce from dairy companies to be pooled in seven groups arranged according to approximate geographical position. Each group to be strong enough to justify its separate direct representation in London. In his report Mr. Davis surveyed the difficulties under which the board had been working, together with the weaknesses of the present marketing system, due in a measure to the unsatisfactory functioning of an arrangement betweert the Importers' Association and the board. Mr. Murdoch pointed out that the board was faced with the alternative either of relinquishing all control of the industry or of seeking to bring about conditions which would enable the dairy industry to exercise effective supervision to a point much nearer the "retail counter." The Proposed Groups. Details of the proposed groups were given by Mr. Murdoch, who said that the board would encourage the establishment of such organisations in the different districts, probably in the form of marketing associations with statutory powers under the Agricultural (Emergency Powers) Act. Groups would probably be as unuer: —

North Auckland, one pool for butter; South Auckland (other than the New Zealand Co-operative Dairy Company), one pool for butter and one for cheese; New Zealand Co-operative Dairy Company, one pool for butter and one for cheese; dairy companies grading at New Plymouth, one pool for butter and one for cheese; dairy companies grading at Patea, one pool for cheese, butter pooled with New Plymouth; balance of North Island, one pool for butter and one for cheese; South Island, one pool for butter and one for cheese. Mr. Murdoch added that the allotment of produce in the group would be in the hands of the board to begin with.

The board would control f.o.b. sales until group organisations were functioning and exercising the powers and duties to be conferred upon them, he said. "Thereafter groups may make f.o.b. sales on such conditions as the board may impose, but in all cases f.o.b. sales to the United Kingdom must come out of the merchants' own allocations. F.o.b. sales to intermittent markets, such as Canada and United States, are to be in the hands of the board on behalf of the industry on a Dominion basis." Problems To Be Solved. Mr. Davis' statement, giving his reasons for advocating a change in policy is comprehensive, covering ten closelytvped foolscap sheets. He traces the difficulty of the board and says that the importer had to a degree been handicapped in carrying out his real function, the distribution of. butter and cheese to the retailer. The governing factor under present conditions, he said,' was "to sell each ship at a price at least competitive with the other fello,w," wider distribution to the customer being to a certain extent secondary. ■ "It is important to remember that in this connection Denmark has'built up her splendid position in the United Kingdom to-day on service to her customers almost as much as on the quality and freshness of her produce."

He then spoke of the agreement come to between the importers and the board, giving provisions of that agreement. He said that the efficiency of ~the regulations depended to a large measure on the spirit in which the provisions were interpreted and carried out; and certain of the provisions had not been observed in the spirit intended. He made especial reference to those provisions requiring importers to refrain from buying goods f.o.b. and c.i.f. for their own account. Subsidiary or associated companies had been used to enable importers to make such purchases and the subsidiary company obviously acting as. a "dummy" in such cases. Under existing conditions the board was not in a position to enforce the letter and the spirit of the agreement. Mr. Davis then came to the kernel of his proposals. "The most effective method of attaining our objectives is the formation of a limited number of marketing groups, the produce of each group to be sold in the United Kingdom or elsewhere under one group brand," he said. "The proceeds of the sale of produce- from each group would be- pooled, permitting the exploitation of areas in ■which sales are slow, and providing the opportunity to each group to link up if necessary with a particular distributive organisation in the United Kingl- - " . Magnitude of the Task. ' The board fully realises the magnitude of the task," 6aid Mr. Murdoch in his statement. "It is safe to sav that j the industry is definitely dissatisfied 1 with the lack of co-ordination, and this plan makes some advancement better." At the New Zealand end of the market-' ing, he said, there was continuity of policy neither among the dairy companies nor with the merchants. The board, then, was face to face with either entirely giving up intelligent supervision of marketing or moving forward with the co-operation of the dairy companies to lay a foundation on which could be built an adequate marketing structure.