Liquor Trade Profits Cited As Reason For Retaining Controls

Press, Volume XCII, Issue 27699, 1 July 1955, Page 12

Liquor Trade Profits Cited As Reason For Retaining Controls

(New Zealand Press Association)

WELLINGTON, June 30. The leading companies in the licersed trade were all prosperous and had made huge profits over the years, said the representative of the Federation of Labour (Mr P. M. Butler) in submissions to the Price Tribunal today in opposition to the trade’s application for decontrol of hotel tariffs and liquor charges. “We say that the licensed trade is receiving more than a fair return for the goods and services supplied, and in some respects the charges made already savour of exploitation of the public,’* said Mr Butler. “We say that the trade has failed in its duty to the rublic, and submit that instead of removing price control from this industry, the tribunal should, in accordance with the act, examine closely the existing orders and reduce some of the charges already permitted." 1

The only competition in the trade was between groups for the extension of their “beer empires,” submitted Mr Butler. There was no trading competition as envisaged by the Price Tribunal. and on this rround the application should be refused. Beer Output wd Prices Mr Butler said the production of beer had risen from 16,219,436 gallons in 1938-39 to 37,011,65*1 gallons in 1951-52, and consumption from 11.22 gallons to 20.7 gallons a head of population. In the same period the number engaged in the industry had risen only from 1243 to 1370. with output a person rising from gallons to 27,015 gallons. “The brewery combines have not passed on to the consumer or to the workers engaged in the industry the benefits of increased production.” said M Butler.

Mr Butler said a licensee bought bulk beer for about 6s Id a gallon, and if it was sold in 9oz glasses, the return was 8s 6d, with a gross profit of 2s sd. or nearlv 40 per cent. If i* was sold in Boz glasses the return was 10s. and the gross profit 3s Id, or more than 64 per cent.

If it was sold in 7oz glasses, the return was Ils, with a gross profit of 4s lid or more than 80 per cent., s aid Mr Butler; and if it was sold in soz glasses the return was 16s, with a profit of 9s 6d—more than 163 per cent. In spite of the large amounts paid for hotels, leading companies in the trade were all prosperous and their balance-sheets had disclosed that they had made huge profits over the years, said Mr Butler. The recent report of New Zealand Breweries showed that net profit had risen by £32,446 to reach a new peak of £261.734. The average cost of bottled beer was 18s 8d a dozen delivered on the premises, and when it was sold in 7oz glasses the return was 25s Bd, yielding 7s gross profit, or 37.5 per cent., he said. If it was sold in soz glasses, the return would be 36s 2d, leaving 17s 6d gross profit, or 93.75 per cent. There was an ample supply of beer, wines, and spirits, but while control, distribution, and sale were in ’ the hands of a monopoly there was no reason to believe that prices would drop because there was an abundance, said Mr Butler. The tribunal would have no difficulty in refusing the application for removal of control on accommodation charges, said Mr Butler, because it was abundantly clear that reasonable accommodation at reasonable cost was not now available. Charges for Spirits Consumers could be forced to pay more for spirits than provided in the price orders, said Mr Butler. Whisky cost the retailers about £1 a bottle and in a bottle there were 42 permissive “nips” retailed in the bar at Is each. There was a profit of more than 100 per cent., and there were additional permissive charges if the liquor was sold in the lounge or dining room. Mr Butler said he was prepared to withdraw the federation’s objection to decontrol of the hotel trade if all controls were lifted from wages throughout the Dominion. “If you want ‘open slather,’ then we want ‘open slather.’ too,” he told counsel for the licensed trade.