Dairy Industry Claim On Dumping Of Butter

Press, Volume XCVII, Issue 28514, 18 February 1958, Page 14

Dairy Industry Claim On Dumping Of Butter

(New Zealand Press Association) WELLINGTON, February 17. The £l3m loss on dairy produce sales for the 1956-57 season was almost entirely caused by the dumping of tremendous quantities of butter on to the British market, the Dairy Industry Information Service says in a statement today.

In flagrant violation of both the spirit and letter of the General Agreement on Tariffs and Trade, countries like Finland, Sweden, Eire, and the Argentine charged their own people very high prices and dumped their surplus on the British market, says the statement.

In Finland last year, local consumers were being charged more than 6s per lb for butter, while the same butter was being sold in the United Kingdom for 2s 5d per lb.

Later, through exchange manipulation, the difference between the price paid by consumers in Finland, and the price received in the United Kingdom, was reduced, but it is still nearly 2s per lb.

Similarly, Sweden, Eire, and the Argentine are dumping their butter into Britain at prices of between Is and 2s per lb less than their own consumers are paying. Every time the butter price falls in the United Kingdom, the subsidies paid to foreign dairy farmers by their Governments, in one form or another, must be increased.

The New Zealand dairy industry cannot possibly compete with the Government Treasuries of these countries, which could go on paying high domestic prices to their own farmers, irrespective of what the dumped butter brings in the United Kingdom. All that the New Zealand dairy industry can do is to urge upon the New Zealand Government that it should present an anti-dumping case to the United Kingdom as strongly and as speedily as pos* sible. Mr Walsh’s Comment

The president of the Federation of Labour (Mr F. P. Walsh) has commented on the serious losses now being incurred in the sale of New Zealand dairy produce. Fortunately, however, Mr Walsh also recognises the seriousness to New Zealand of this dumping problem.

In a statement made originally to a London ‘‘Daily Express” reporter, but also published in New Zealand, Mr Walsh pledged the complete support of the trade union movement in New Zealand to protests being made to the British Government on dumping. “This dumping of dairy produce into Britain and its drastic effects on New Zealand does not only concern the dairy industry, it affects every man, woman, and child in this country,” he said. “I can tell you this, that the trade union movement in this country is gravely concerned about the treatment New Zealand is receiving from the British Government on the sale of our dairy produce. “You don’t think, do you, that we like having to sell some of our carefully nurtured overseas assets,” said Mr Walsh. "Unfair Trading”

“Why are we having to do it? The main reason for our balance of payments difficulties lies in the unfair trading now current in the dairy produce field in Britain—and is with us, because the British Government has done nothing whatever to stop it

“All through the war years, we sold our primary produce to Britain at prices considerably below world parity, whereas the Argentine and other countries made food contracts at the highest possible prices they could—then promptly repudiated them and held Britain up to ransom for still more. “Do you wonder, in view of these things, that our people are very perturbed at the short memory of the British Government.

“What is happening now is that people like ourselves are being sacrificed and preference given to these foreign countries, some of whom were lined up against Britain during the war. “Pretty Poor Deal”

“Now they are busy dumping butter into the British market, preventing us from getting a fair price, and' the British Government is letting them get away with it It affects every one pf us in this country and you cannot expect us to think that we have had anything else than a pretty popr deal.” The market evidence shows that, if all dumping of butter into the United Kingdom were stopped immediately, any loss incurred in the sale of New Zealand butter would be reduced to manageable proportions, says the statement by the service.

For 1957, total butter imports into the United Kingdom were 653,300 tons, and the average price received for New Zealand butter was 279 s Bd. The total quantity of dumped butter last year was 61,100 tons. If that quantity had been removed from the market it would have left 304,200 tons of butter as the total supplies going into the United Kingdom from all sources. In the year 1955, total imports into the United Kingdom from all sources were 307,000 tons, and the average price received for New Zealand butter was 355 s Id, which is 12s above the amount required to meet the present guaranteed price. “Manageable” Loss It is reasonable to suggest, therefore, that it the dumping issue were completely settled, there would be little or no price problem facing us. All the market evidence shows that, if this were done, any loss the Dairy Industry Account -would have to bear would be one of manageable proportions. Mr Walsh would, rightly, be the first to crusade against allowing free entry into New Zealand of goods which had been heavily subsidised by Governments. It is good to know that he is equally concerned to see that the dairy industry is protected against the present wholesale and unfair dumping that is occurring. Only very strong action by the New Zealand Government can bring about a situation which will largely solve the drain on the Dairy Industry Account. Given fair trading conditions, the dairy industry in New Zealand can meet the position, says the statement