TOBACCONISTS’ TURNOVER

Press, Volume XCVIII, Issue 28819, 13 February 1959, Page 10

TOBACCONISTS’ TURNOVER

Effects Of Heavy

Taxation

(<.ew Zealand Press Association) WELLINGTON, Feb. 12.

The heavy increases in the retail prices of tobacco products had resulted in a reduction in consumer demand of 33J per cent, and had caused a most serious decline in the economy of the industry, said the secretary of the Wellington Provincial Tobacconists’ and Hairdressers’ Association (Mr A. L. Knowsley) today.

In' addition, he said, the retail margin of profit had been cut by a further 33J per cent, arid tobacconists found themselves in an untenable position. It would appear that the tobacconist, as such, was rapidly on the way out, he added. Mr Knowsley said the decline had occurred purely as a result of legislation. First, when the National Government made legal the sale of tobacco products 24 hours a day, resulting in a 15 per cent reduction in tobacconists’ turnover, and secondly—and more seriously—when the Labour Government, in its Budget legislation, reduced the margin of retail profit from 12.5 per cent to .8.8 per cent. That profit margin included the trade discount of 3.75 per cent, for prompt pavment of merchants’ accounts.

Mr Knowsley said any tribunal of experienced business men would agree that it would be impossible for any business to continue solvent on the basis of the 33A per cent, reduction in both demand and in profit.