The Press SATURDAY, MARCH 5, 1960. Control of Meat Prices

Press, Volume XCIX, Issue 29146, 5 March 1960, Page 12

The Press SATURDAY, MARCH 5, 1960. Control of Meat Prices

Control of retail meat prices appears to have been reimposed in an attempt to enhance the Government’s electoral popularity rather than in any certain knowledge that consumers .will benefit. When there is no scarcity of goods artificial control of prices is an unsatisfactory substitute for free competition as a safeguard of buyers’ interests. In normal times controls should be applied, if at all, with the utmost caution: their consequences may easily be more undesirable than the ills they are intended to remedy. The Price Tribunal's plan to restrict •he profit margins of retail butchers is a clumsy expedient which may prove impracticable. Experience has shown that, under Price Tribunal control, the maximum permissible prices for any commodity usually become the standard prices: the retailer is disinclined to charge less than the maximum rate, irrespective of quality or supply; and the pricing system in shops loses its flexibility. These are thje disabilities that may now be inflicted on retail butcheries; and the consumer may suffer more than the butcher. The policing of the meat price orders will be extremely difficult; but disgruntled purchasers will be afforded endless opportunities for trivial complaints that will aggravate problems of administration. Because retail margins, not wholesale prices, are to be controlled, maximum prices in the shops will need to be varied’ according to the fluctuations of the livestock markets. If the system is to be operated equitably, for both butcher and customer, account must be taken of the differences in livestock prices at the various sales throughout the Dominion. In . an endeavour to comply with.

these requirements, the Price Tribunal has devised a com- | plicated and cumbersome pro- [ cedure necessitating constant adjustments to retail price lists. ,To avoid prosecution, every butcher will be expected to master a host of details without . which he cannot price his meat accurately. Is the average customer under this system ■ likely to know from day to day whether she is being overcharged? Is every butcher to .be an accountant as well as a J tradesman? The New Zealand Meat Retailers’ Association appears to have good grounds for resenting criticism of prices and for resisting control until j the Government produces convincing evidence of abuses. According to the Minister of Finance (Mr Nordmeyer), there is “ overwhelming ” evidence that some butchers have been charging prices “ out of all “ relation ” to the wholesale cost of their meat The first ! bulletin issued by the Govern-ment-sponsored Consumer Serjvice reported that, in “several ' “ Wellington butchers’ shops ”, I price differences were “ sub- ■ “ stantial ”. Nevertheless, available statistics do not show I that the average butcher has .been making excessive profits. ; At present, butchers are [retailing beef at less than an ■economic mark-up; but, by adjusting the prices of mutton ! (which is still relatively i cheap), they can strike anj i economic balance. Practices I ! such as this will be impossible ’under price control; and: | butchers are likely to charge ■ I uniformly high prices for all ! i cuts of beef. Labour costs in

the meat tfade are high. Restraint on wage demands, encouragement of business efficiency and enterprise, and a review of burdensome taxation would do more than anything else to ensure fair bargains for customer and retailer alike.