Cotton Mill Aspects “Not In Public Interest”

Press, Volume C, Issue 29657, 30 October 1961, Page 6

Cotton Mill Aspects “Not In Public Interest”

(New Zealand Press Association,

WELLINGTON. Oct. 29. “The federation has so far refrained from public comment on the terms of the cotton mill agreement, because it considered any comment would be a breach of confidence, but publication of the agreement requires some comment bn several aspects which are not considered to be in the public interest,” said Mr R. C. Tizard, president of the New Zealand Retailers' Federation, yesterday. “The Minister of Industries and Commerce has already referred to a meeting between interested parties which will take place next week, regarding clarification of some provisions of the agreement, and at this stage of negotiations, there is no point in comment, ing on clauses requiring interpretation. but the federation considers it essential that the public be fully informed on matters which are going to affect their ability to have the same choice of cotton goods that is currently available in New Zealand,” Mr Tigard said. “The Minister said that initially the goods manufactured by the mill would provide for about 7 per cent, of the local market possibly rising to 20 per cent, by 1968. leaving 80 per cent, still to be imported.

‘‘This is misleading, as the agreement provides that the company will be assured of 80 per cent, of the market for all the goods manufactured by the mill (meat wraps excepted) with indefinite protection by import licensing and protective tariffs for as long as the company continues to observe its undertakings. “The figure of £4 million has been mentioned, as justiflcation for the figure of 20 per cent., yet the agreement provides, that in the event of further development or expansion at present unforeseen, the Government will give sympathetic consideration to any proposals by the company if this is necessary to safeguard the company’s capital investment.” he said. “Such an assurance virtually enables the mill to expand at will with Government protection. “The federation’s interest in the monopoly is its effect on the wide range and quality of cotton goods now

available. In the second stage of production the mill intends to produce a host of other cotton products, for all of which it will have a guaranteed 80 per cent, of the market. The products are in addition to denims, cotton wool, wineeyettes and diaper cloth which will be produced as soon as the mill begins operations. “At the present cotton goods are imported from the world’s markets, in a wide variety of qualities, designs and colours, yet this aspect of consumer protection was not considered worthy of mention in the agreement. The federation understand that the mill proposes to produce only one quality in winceyette, possibly two qualities in diaper cloth, and two qualities of drill and denim in widths which will not fit the patterns on sale in New Zealand.

“They will not necessarily and will probably not equal the quality of the best Indian napkins and sheeting widely sold in New Zealand, and cannot hope to match the prices for which these goods are sold in this country,” said Mr Tizard. “India is also the hereditary home of cheaper drill which is used almost exclusively in the manufacture of industrial clothing such as dust coats and overalls, and it cannot be expected that the Nelson mill will be able to match the price of drill imported from India. “The provisions in the agreement on price are so obscure and wide that the public will no longer be able to buy cotton goods at present prices, nor have the same choice of quality apart from imports. The mill has been promised sympathetic consideration of preferential duty rates for plant, machinery, and raw materials.

“The whole agreement is a most extraordinary document. which makes no provision to protect the consumer as regards choice of price, quality or variety. “The protection given the company appears to be contrary to our obligations under G.A.T.T., and the restrictions on consumers’ choice of quality and price and the creation of such monopolies are not likely to endear us to our Eastern export markets. The probable loss in our export trade could well be very much greater than

any gain in the saving of overseas exchange,” said Mr Tizard.