WHEAT INQUIRY Subsidy Supported By Local Bakers

Press, Volume CI, Issue 29880, 21 July 1962, Page 15

WHEAT INQUIRY Subsidy Supported By Local Bakers

A rise in price would mean bread losing its place in the national diet, the Canterbury Master Bakers’ and Pastrycooks’ Industrial Union of Employers said in submissions to the Committee of Inquiry into the Wheat, Flour and Bread Industries yesterday. With one exception local master bakers supported continuation of subsidy and, with reservation, price control, the submissions said.

Removal of price control and subsidy would mean an increase of 50 per cent, in the price of bread, the bakers said. “This would result in breadstuffs losing the place in the national diet they now enjoy, and quantities sold would fall in competition with alternative foodstuffs to the detriment of the common market of wheatgrowers, flourmillers, and bakers.” The smaller market would mean that existing plant would have surplus capacity. Any rise in price would fall heaviest on families relying on an ordinary working man’s wage. "The additional taxation imposed as a result of the subsidy on flour is relatively

modest for the individual taxpayer and no great burden, but abolition of subsidy would impose a burden on the lower income group.” Stabilised flour and bread prices meant that small bakers could compete with larger bakers and decelerate amalgamation, the submissions said. Small bakeries were an advantage to the trade because they offered the best training ground. Without decontrol there was still lively competition by the bakers as to the quality of bread. It was not necessary to abolish price control to provide healthy competition. Although the union wanted price control it considered the present controls unfair. This was because depreciation was assessed on cost of existing equipment, not on replacement cost, which, with rising prices and more complex and improved techniques, made modernisation difficult, the submissions said.