DAIRY PRODUCE.

Auckland Star, Volume LXVIII, Issue 46, 24 February 1937, Page 10

DAIRY PRODUCE.

MARKETING IN U.K. "NO OCCASION FOR WORRY." MINISTER'S ASSURANCE. (By Telegraph.—Own Correspondent.) WELLINGTON. Tuesday. "T ran dairy farmers and the : uhhr generally that they need have no uneasiness in regard to the present - y-tern of marketing in the United Kingdom.'* This assurance was given by the acting-Minister of Marketing, the Hon. \V. Lee Martin, in the course of a lengthy statement issued to-day. The Minister said that the recent price variations for butter and cheese on the London market were not in any way due to the Government Marketing policy and the system of guaranteed prices; that the relations between the Primary Products Marketing Department and its selling ager.ts were entirely harmonious and satisfactory; and that the fullest co-operation in the sale of dairy produce existed between the London officers of the Department and the individual selling agents. "It is the experience of the past that when butter and cheese prices fall suddenly there are critics, interested and disinteres Md, in the sale of dairy produce. who are ready to ascribe the lower prices to the operations of the marketing system and to affirm that if a different marketing policy had been adopted prices would have remained at higher levels," said Mr. Martin. "These critics often conveniently overlook the market trend in previous years, and the factors in supply and demand which are known to be the major influence in price variations.

''Points of criticism as I have noted them are as follow:—That the Government marketing policy is responsible for the loss of the price preference for our butter over Australia and certain foreign butters; that the price margin of Danish over New Zealand has widened; that the goodwill of the trade has been lost or impaired; and that our butter is being neglected by buyers, particularly speculators, who have turned their attention to other butters.

Changed Policy Welcomed. "Advices received from London since the Government marketing plan was inaugurated show that there is close cooperation between the merchants who act as selling agents for the Government and the London staff of the Marketing Department. It is known that almost all the leading firms welcomed the changed policy because it gave them continuity of supply and enabled them to develop the selling of New Zealand butter and cheese with more confidence than could possibly be the case under the system of the past in the working of which the merchants suddenly found their expected supplies curtailed. Possibly some firms are critical because of I their inability to purchase butter and cheese on f.o.b. terms and to speculate in the sale of our produce. "The attitude of the Government on the question of f.o.b. mlcs and speculation is that, having appointed selling agents for our produce on terms which, consistent with efficient service, secure to them regular supplies for sale on consignment, the Government is entitled as a condition of the agency to require that those appointed agents do not themselves speculate in the produce they "j 1 - Leading agents have agreed that this requirement of the Government is reasonable. Advices from London show that there is much closer collaboration between the agents and the London officers of the Department than has been the case in the past. "In reply to the critics who represent t . t.the Government has been unwise to eliminate the outright selling on f.o.b. terms of our produce, I can say that when reporting to the New Zealand Dairy Board after nine years' experience in London as manager for the board, Mr. E- D*™ "aid:—-The two systems of consignment and fjo.b. sales are difficult to reconcile even under present conditions. Those agents handling consignments only complain that butter sold on f.o.b. terms is frequently resold on arrival in competition with consignment goods. These resales of f.o.b. purchases influence lower prices for butter sold on consignment.*

Conflicting Interests. "While this view may be debatable," •aid the Minister; "it is evident that any contemplated system of adjusting the offerings of produce to the capacity of the market to absorb them would be seriously disturbed by the presence on the market of substantial quantities of produce, the ownership of which has passed to other hands. Thus the opinion expressed by Mr. Davis, which is supported by many authorities, is that the policy of combining f.o.b. and consignment selling is inconsistent. It can fairly be said that the interests of the speculative f.o.b. buyer are not the interests of the producers or the Government. As seller, obviouslv, the f-o.b. buyer expects to beat the market. Furthermore, there must be general agreement that f.o.b. selling which leads to the storing of produce is a disruptive in any policy which aims at providing regular deliveries of butter and cheese in fresh condition.

"The present marketing policy is different from the policy of the previous year only in regard to the elimination of f.o.b. sales and more strict supervision of 'spot* buying by agents. "Suggestions have ' been made that f.o.b. buyers, being unable to purchase from Xew Zealand, bare turned their attention to Australian batter. This suggestion is disproved by the fact that c.i.i. business in Australian butter is about in line with recent years and represents probably less than i 5 per cent of the Australian shipments to date. I can express the aim of the Government in« regard to the marketing of dairy produce in these words," said Mr. Martin, "that a system of shipment and marketing of our dairy produce should be developed which will ensure regular arrivals of butter and cheese of uniformly high quality, in fresh condition, delivered at the main distributing Ports in the United Kingdom in quantities to meet market requirements, and the sale of this produce on a consignment basis through accredited agencies with distributive outlets, at a minimum cost to the consumer. The Government marketing plan inaugurated on August 1 last has already improved conditions toward this end.** 1 Ring 32-466 and make an appointnipnt With Msdinic Modaire, expert fijrure specialist, who personallv fits the latest Modaire Xu-Back and " Practical Front Foundations, also exclusive Gothic Brassieres and Surgical Fittings —from March I.—John Court, Ltd.. Queen Street.—(Ad.) To-day's English bees are mongrels. There is no proof that the real British brown bee exists.