Meat Firm Contests Views On Marketing

Press, Volume CI, Issue 29726, 20 January 1962, Page 6

Meat Firm Contests Views On Marketing

Denying that “it can be profitable to sell New Zealand meat at a reduced price on new markets outside the United Kingdom,” a spokesman for Thomas Borthwick and Sons (Australasia), Ltd., contests the views of Professor B. P. Philpott and Mr A. T. G. McArthur on this subject.

The quotation is from an article on this page last month which reported the results of a survey of farmers’ opinions. The survey was conducted by Mr McArthur, senior lecturer in rural education at Lincoln College. Reporting the results of the survey, Mr McArthur referred to a paper on the subject written by Professor Philpott, professor of agricultural economics at the college.

“The thesis about the falling price on the British market resulting from increased quantities of New Zealand lambs arriving on that market appears to disregard the fact of supplies from other sources such as Australia, Argentine. Chile, plus the ex. tremely important factor of home-killed supplies. In addition. the price realised for New Zealand lamb is affected by the total availability on the United Kingdom market of all classes of meat, home grown and imported and including beef, mutton, lamb and pork, not to mention chickens,” the spokesman said.

Comparison "Relative to the total retail sales of meat in the United Kingdom, our supply is not of very great moment. In all. the United Kingdom market handles about 2.400.000 tons of meat annually, excluding bacon and hams. Of this huge quantity, about 65 per cent, is home produced and only about 35 per cent, imported. New Zealand supplies annually aboiit one-eighth of Britain's meat needs. Our lamb represents the meat supply required for about one shopping day in a fortnight. “To disprove the theory that extra lambs from Nev/ Zealand automatically reduce the over-all realisation, we need onlv go back to the 1959-60 season. In that year we enjoyed a very good orice level for New Zealand lamb, better than the previous year in spite of bigger production from New Zealand.

Saturation "How cab Professor Philpott and Mr McArthur be so cer tain that New Zealand lamb has reached saturation point on the United Kingdom mar ket? If they are so certain, then they must know exactly how many lambs are going tn be supplied to the United Kingdom market by the Argentine, and Australia in the next few years, to men tion only two supplying countries Even more important they must know what the British'Government’s police is going to be in regard fo farm subsidies. Clearly they cannot know these things, and research cannot possibly supply the answers to such questions of the future “The New Zealand Meat Producers’ Board does not believe that the United Kingdom market for New Zealand lamb has reached saturation point In its last annual report the board says: ‘Statistics are interesting but can on occasions prove just as fickle as the opposite sex If those quoted have any mean

ing, then it would appear, having regard to the pre-war position, that we are not overloading the United Kingdom market with our meat and in particular our mutton and lamb. At certain periods of the year there could be a measure of over-supply, but this is not a new situation Also we must not forget that last year's heavy tonnage of lamb and mutton was absorbed by the United Kingdom market at very good prices indeed.’’ “In a recent cablegram wa have a report from London that the New Zealand Meat Board is making a drive to increase the consumption of lamb in the British catering industry. The board will have a stand at the major exhibition of hotel and cater ing trades at Olympia, London, beginning on January 23 A new comprehensive larno cookery guide is being prepared by the board’s catering consultants, and this will will introduced at the exhibition. Clearly the board is under the impression that there is still room in the United Kingdom for widening and extending the fields for New Zealand lamb consumption.

Opposite Effect “Hrfve Messrs McArthur and Philpott considered that by reducing the quantity arriving from New Zealand, we improve the market for Home killed, Argentina. Patagonian. etc., and that these suppliers will take advantage of this improvement by increasing their countries' production and supplies to the United Kingdom “At a meeting of the meat and woo] section of Federated Fanners, Southland, last November, in discussing a motion ‘that it be a recommendation to the New Zealand Meat Board that it purchase outright about 3m lambs this year and sell these at a loss if necessary to markets outside the United Kingdom and that any loss incurred would be preferable to support prices,’ Mr T Double said that a few years ago New Zealand was selling 12m lambs a year on the British market and it was said that New Zealand was over-supplying that market. Now New Zealand was sell-

ing about 18m lambs in Britain. If 3m lambs were witihdrawn by New Zealand from the British market, Australia or some other country would fill the gap and New Zealand's position would not be helped at all. “Has due attention been paid to the fact that a reduction in price increases the consumption and that this higher level of consumption tends to be maintained although the price may subsequently, rise again? “We are glad to see that Professor ' hilpott recognises a ‘hazard’ in selling in a new market at too low a price as the traders might reship the meat on to the United Kingdom, defeating the objective. This is exactly what would happen. Professor •Philpott’s statement shows that he recognuises the limitation of his theory, but Mr McArthur clearly does not do so because he states categorically: ‘lf the price on the British market for lamb is £2OO a ton and New Zealand decides to send an extra million lambs, then the value of these will only be £4O a ton, or 20 per cent, of the average price. This means that if one can divert these extra lambs in to another market and get more than £4O a ton, then New Zealand and New Zealand farmers will be better off. Selling the extra lambs in Japan at Is a lb would therefore bring in more than sending them to Britain.’ Right And Proper “We agree that it is right and proper for New Zealand to spend money in the development of new markets. A lot of money is being spent by the meat companies and by the Meat Board in such developmental work but this has nothing whatever to do with the proposition of selling one million lambs cheaply on a new market.

“We are pleased to see that two-thirds of the farmers who answered Mr McArthur’s questionnaire at this year’s Canterbury Agricultural and Pastoral Show had the good sense to say that it stood to reason that selling lambs cheaply on a new market must obviously bring in less money this year. Mr McArthur has ruled that these two-thirds gave the wrong answer: if it is any consolation to these farmers, we also would give the ‘wrong' answer if asked the same question,” the statement concludes.