The Press THURSDAY, JUNE 27, 1963. Sweetening The Pill

Press, Volume CII, Issue 30168, 27 June 1963, Page 12

The Press THURSDAY, JUNE 27, 1963. Sweetening The Pill

The Government’s decision to stabilise the price of sugar at lOd per lb for 12 month* should satisfy the sugar refinery, food manufacturers, and consumers. The Government is counting

on an early reduction in world sugar prices to wipe out the deficit the scheme will incur in the early months of its operation. The sugar refining company cannot have relished the widespread criticism which greeted its announcement on June 14 of a rise of 3d per lb, although the company had every justification for the increase. The London wholesale price of raw sugar 12 months ago was £24 a ton. The price rose to a peak of more than £lOO a ton last month but had eased to £BB by June 13. Twelve months ago sugar retailed at 7|d per lb retail, which was 5d per lb above the ruling world price of raw sugar. This margin of 5d represents the cost of refining the sugar and of distributing it from the refinery to the retail consumer. It was apparently lower in New Zealand than in several other countries of larger populations; the New Zealand average retail price in July of 7.6 d per lb (according to the Abstract of Statistics) compared with B.Bd in Sydney, 6d in Cape Town, 8d in London, 7.5 d in Canada, and 10. Id in the United States. When the New Zealand Sugar Company announced the increase to Is 2d per lb this month it had raised the price to the New Zealand consumer 6Jd per lb in 12 months; and the world price of raw sugar had risen 7d per lb in the same period. (It has since fallen id per

lb.) The 5d margin was preserved, and the New Zealand consumer had not been called on to pay the Is 4d per lb which the 5d margin would have justified when the price of raw sugar reached £lOO a ton. The world price will need to fall to about £5O a ton before the New Zealand subsidy disappears. The country’s food processors, most of whom use sugar, will be grateful for this stabilising measure. Without it, the prices of many food lines would have been raised, some of them substantially; and inevitably consumer resistance and loss of consumer goodwill would have resulted. The housewife would have complained at the round of increases, and the cynical would have observed that the manufacturers are more ready to “ adjust ” their prices when costs rise than they are to lower them When costs fall. Two spoilsports in the community may not applaud this stabilisation measure: the dietitian and the economist. The dietitian, who for long enough has warned New Zealanders that they eat too much sugar, might have welcomed the deterrent of a period of high prices. The economist would justly point out that a high price to the consumer of this expensive commodity is just what is required to reduce the drain on the country’s overseas reserves when world prices rise. A government cannot hope to please all the people all the time, however, and—especially in election year—the best it can hope to do is to please most of the people most of tha time.