ORANGE PRICES

Press, Volume LXXII, Issue 21974, 24 December 1936, Page 12

ORANGE PRICES

MINISTER REPLIES TO CRITICISM RETAILERS' PROFIT "AVERAGE MARGIN OF IIA CASE" trai.is association tilbqbam.) WELLINGTON, December 23. The Minister for Industries and Commerce (the Hon. D. G. Sullivan) said to-day that his attention had been drawn to a statement by Mr A. Newall, secretary of the Dunedin Retail Fruiterers' Association, about the regulations governing the price of oranges which were recently passed by the Government. He said Mr Newall had expressed resentment at some comments which he had made a few days ago in a statement to the press that many retailers are not complying with the regulations. He did not know why Mr Newall had expressed resentment at his remarks, because it was perfectly correct that many retailers were not complying with the regulations. In fact, in Wellington and Christchurch the number of retailers who were not observing them was considerably greater than the number who were.

In fairness to the public, this state of affairs could not be allowed to continue, and accordingly, in the press statement, which he had made a few days ago, a warning had been issued to retailers that if they continued their failure to observe the regulations the Government would have no option but to bring offenders to court. Jamaica Oranges The Minister added that surely Mr Newall did not expect the Government to countenance breaches of the regulations. As to Mr Newall's statement that the retailers were making a loss on Jamaican oranges at the prices fixed by the Government, while importers were making a profit, the Minister said that this statement was not in accordance with fact. The retail prices fixed by the Government provided a reasonable average margin of profit to retailers, and the wholesale price of 32s 6d a case, which, incidentally, was the maximum price, and not the fixed price, also provided what was a reasonable margin of profit, in the circumstances, to the wholesaler. "Mr Newall has selected the 176 count of oranges to prove that a reasonable margin of profit is not allowed to retailers," the Minister said. "This is not a fair comparison, because while the rate of profit on the 170 count is 2s BJd a case, the profit allowed on other counts, for example, 200 and 216 counts, is 7s 6d and 10s 3id respectively. Recognising this, the Government grouped these three counts in the regulations, thus giving an average margin of profit for the fruit of 7s a case. Therefore, if a retailer buys one case of each count his average gross profit is approximately 7s a case. High Prices at Auction "If the Government had not taken action when it did, oralges would have been auctioned and both retailers and the public would have had to pay very high prices. Oranges, actually, were put up to auction in Auckland, Wellington, and Christchurch, and in Wellington prices reached as high as 66s a case. In Auckland and Christchurch they were not quite as high, but they were nevertheless considerably higher than the maximum of 32s 6d a case fixed by the Government. The retailers were themselves responsible for bidding such high prices, and following upon action being taken by the Government, the importers willingly agreed with the Government to refund several thousands of pounds, representing the difference between the maximum price of 32s 6d, and the prices actually paid at auction by the retailers. Any accusation, therefore, that retailers were being unfairly treated to the advantage of importers is entirely false." The Government had acceded to representations made by the retailers to have additional supplies imported from Australia, and in return the least that the Government expected was that the regulations would be complied with. The Minister asked for the cooperation of both retailers and the public in see.ing that the regulations which had been passed so that the public would be sure of obtaining supplies of oranges at reasonable prices this Christmas were fully complied with. With so much sickness in existence, it was essential that oranges should be made available at the lowest possible prices. Dunedin was specially affected by sickness at the present time, and the Minister expressed surprise that Mr Newall should have seen fit to express resentment because the Government proposed enforcing regulations which were designed for this purpose.