RETAIL PRICE OF TEA

Press, Volume XCI, Issue 27569, 28 January 1955, Page 12

RETAIL PRICE OF TEA

INCREASE TO 9/6 PER LB EXPECTED

WHOLESALERS MEET IN WELLINGTON

The retail price of tea may next week go up to 9s 6d per lb. One brand of tea has already been increased to 8s lOd, and yesterday representatives of wholesale packing firms met in Wellington to consider a possible rise in prices for other brands of up to is per lb.

Auction prices for tea overseas have already gone up considerably and most New Zealand wholesalers are now almost out of their old supplies. The first shipment of higher-priced tea bought at recent auctions in Ceylon has arrived in Auckland in the motor r ship Purnea, and will be unloaded within the next few days. The new tea price of 8s 10d per lb has not come into effect in Christchurch, as grocers have not passed on the increase to their customers. The packers of the brand had run out of stocks, and had to have new supplies of tea shipped from Sydney. The supplies had been purchased at the higher auction prices. World Demand Greater A statement issued by the Tea Bureau attributes higher tea prices to increased world demand. Tea had risen less in price than other beverages.

Consumption of tea in the United Kingdom had risen by one pound a head since tea rationing ended in 1952 Britain now imported nearly 500,000,000 lb of tea, nearly half the world’s exports The United States, though a small consumer of tea on a per capita basis, had increased its imports by 34 PnL cen t , in the las * eight months of 1954, and had become the second largest importer of tea in the world. Consumption had also increased in every other major tea consuming country, the statement says. Britain consumed 101 b a head, Eire BJ, New Zeajand 7J, and Australia 6J. The output ° f tea had been expanded, but could barely keep pace with demand. The Assam floods towards the end of 1954 and the London dock strike distuibed the British tea stock position, and some shipments of tea had been diverted to Continental ports.

Consumption in N.Z. The statement says that the average New Zealander drinks 7Jib of tea a r..y e , a o r; £ costs him > at 7s lOd per lb, it 2 IS 5 ?, d a year - Each rise of Is per lb adds 7s 6d a year cost to the average consumer. Thus tea is still about a third of the cost of the cheapest alternative.

Average retail tea prices at November 15, 1954, were: United Kingdom 7s 2d, Australia 7s 5d Australian or 6s sterling, plus a subsidy of £A5,500,000 New Zealand 7s lOd, South Africa 9s, Egypt 9s 2d, Canada 10s, Denmark 10s 7d, United States 13s 3d, Germany 18s.

The Tea Bureau says that today’s high prices do not reflect any greed on the part of anyone, or any Government, least of all Ceylon, which relies on stable conditions for tea, which provides more than 60 per cent, of the country’s income. “The Ceylon export duty of Is 6d a pound of tea, which has been blamed for the rise in the cost of tea, is purely an interne 1 matter, and does not concern the buyer except-that he must allow for this sum in making his bid at-auction. What matters to the buyer is the landed cost in New Zealand. In Africa or Indonesia, where no export duty operates, tea has been fetching prices comparable with Ceylon tea. If it is argued that the buyer pays the export tax, those teas should be at least Is 6d a pound cheaper than Ceylon tea,” • said the statement. “Tea purchased in auction *on November 30 would land in New Zealand at approximately 7s 6d per lb. Blending and packing, distribution, financing, and other overheads would demand Is to Is 6d at least, as allowance must be made for unlucky or unnecessary purchases at times of high auction prices to ensure continuity of supply in buying to catch shipments. It does therefore seem that unless world prices drop, the price may rise up to 10s a pound.”