INCREASED TEA PRICES

Press, Volume LXXXIII, Issue 25308, 7 October 1947, Page 8

INCREASED TEA PRICES

TEN PER CENT. SALES TAX

STATE WITHDRAWAL FROM TRADE SUGGESTED

Christchurch tea importers and merchants consider that the Government is unreasonable in levying 10 per cent, sales tax on tea, while none is payable on such luxury items as cigarettes. Several said yesterday that the present high price of tea could be reduced substantially if the Government withdrew from the trade, and permitted private firms to import tea, as they did before the war.

More than one importer considered that the reason for the recent increase in the retail price of tea was to recoup the Government for some of the subsidy it had paid in the last few years. Another reason for the increased price, they said, was that tea was now packed in fancy packets, instead of being sold loose, as in the past. Some dealers pay higher prices for their tea from the Government than others, although ‘they all receive the same grade, and retail prices are fixed. This is because price levels were fixed at September 30, 1939. With the increase in the price to retailers, making the present prices from 5s IJd to 5s 5Jd per lb, and the retention of the sales tax, the Government, which had a monopoly, showed a profit on the sales tax in proportion to the increased cost, said the manager of a grocery firm. While the Government seemed willing to accept the additional revenue, it was not prepared to allow merchants or retailers any increased margin. One importer said that the duty on tea could be abolished, together with the sales tax, and that New Zealanders would then enjoy the commodity at prices comparable with those in Australia and Britain.