PRICE FIXATION.

Auckland Star, Volume LXVI, Issue 230, 28 September 1935, Page 11

PRICE FIXATION.

SALE OF FOODSTUFFS.

PROPOSED LEGISLATION.

PRESENT FORM OPPOSED.

Opposition, to the Commercial Trusts Amendment Bill; in its present form, ■was expressed by Mr. J. A. Nome at a meeting of the South Canterbury Chamber of Commerce Council (says the "Timaru Post"). The bill is to come 'before the House this session.

Norrie contended that the Associated Chambers had heard only one side. In 1927 the Proprietary Articles Traders' Association •was formed to control the prices of proprietary lines and foodstuffs. Evidence was taken, and as a result the association had not been allowed to operate. The suggested amendment would allow manufacturers to fix the prices of foodstuffs, and the effect of price fixation on cash-and-carry traders would be most detrimental, as tlieir sales would drop considerably. Cash-and-carry traders had been called "price-cutters," but he felt that the trader who gave service and yet sold goods at the same price was the real "price-cutter."

He mentioned one line which was one of the best sellers in Now Zealand. The manufacturers had a method of sending goods on consignment, and even if he was prepared to pay cash, he could not go and demand the goods, because they belonged to the manufacturer. These goods cost 13/ a dozen tins, plus tax, and with the discount it worked out at 13/4 a dozen. The retail price was 1/4 a tin, which left the storekeeper a profit of 16 2-3 per cent on turnover. The average overhead in the service store worked out at 15 per cent, so they were not left with very much of a margin. The average overhead of the cash-and-carry store ranged between 6 and 7J per cent. They had to sell the particular line at 1/4 so they could make a good margin of profit. Therefore the cash-and-carry man was not the cutter but the other man.

"I don't hold with selling at cost price, as that is brainless and creates unfair competition," he proceeded. "I think it would be better if the Government brought down a bill to prevent retailers selling goods below a certain margin of profit. No retailer should be allowed to purchase direct from the manufacturer, as this gives him an unfair advantage over the small man."

Mr. Norrie mentioned that under the N.R.A. in the United States a retailer was not allowed to sell goods at a profit of less than 10 per cent. For the first breach a line was imposed, the fine was doubled for a second breach, and if the retailer offended a third time he was put out of business. "I feel that the manufacturers are themselves largely to blame for the acute price-cutting taking place in the country to-day," added Mr. Norrie.

Mr. G. D. Virtue said lie wished to correct the idea that the bill had been rushed through by the Associated Chambers. The 1032 conference had instructed the executive to go into the matter. Frequent meetings had been held. Mr. Norrie said he was of opinion that the Associated Chambers had only obtained evidence from interested parties on one side. * It was decided that Mr. Nome's views should be forwarded to the Associated Chambers, with an inquiry a3 to whether evidence had been taken from both sides.