'No Moves Against N.Z. Cycles’

Press, Volume CIII, Issue 30445, 20 May 1964, Page 6

' No Moves Against N.Z. Cycles’

(N.Z. Press Association? WELLINGTON, May 19. There had been no organised attempt by the wholesale trade to exclude New Zealandmade bicycles from traditional retail outlets, the Automotive and Cycle Wholesalers’ Association said today at the Tariff and Development Board inquiry in Wellington today. It was the sixth day of the board’s inquiry into the application by Morrison Industries, Ltd., of Hastings, for Tariff protection for its bicycles. The denial was made by the managing-secretary of the association (Mr L. B. Crompton).

Hearing the inquiry are Messrs J. P. D. Johnsen (chairman), K. B. O’Brien, and B, E. Rudman. After Sales

“The members of our association have for many years considered it is in the public interest that retailers of bicycles should be able and willing to provide a realistic 1 after-sales service. This we

believe to be a generally accepted principle in most similar trades.

“For example, we are Convinced no motor-vehicle importer would ever consider appointing as a distributor anyone who could not give an adequate after-sales service, and we believe similar arrangements are insisted upon by reputable suppliers of domestic appliances. “It is also true that for some years, and long before the establishment of the Morrison enterprise, the relationship between the wholesale and retail cycle traders has been quite cordial, but the mehibers of our association have always retained the right to decide which retailers should be supplied by them with cycles, and with parts and accessories, and has not limited supplies to members of the federation. Categorical Denial “We categorically deny there has been any organised attempt by the established wholesale trade to exclude New Zealand-made bicycles from traditional retail outlets, and we do not concede that the failure of the Morrison organisation to persuade the established cycle trade to market its bicycles is proof of any organised attempt by

our association to exclude those machines from those retail outlets,” Mr Crompton said. “Furthermore, we do not regard the lodging of letters of complaint from two department stores as being valid evidence that there has been an organised attempt to deny parts and accessories to Morri-son-appointed distributors, particularly as the names of the two complainants were not stated, nor were the letters read out at the inquiry.” “No Tariff Needed” The bicycle industry was not one that should receive protection by means of a tariff or any other device, the association said. As bicycles were almost entirely used by people in the lower income groups, by schoolchildren, and by university students, it was most undesirable that there should be any increase in price, said the association. “We consider a rise in price would be inevitable either from the imposition of a protective tariff or from the granting, through licensing, of a monopoly,” said the association.

The size of the New Zealand market was too small to justify the creation of a full

manufacturing unit, the as sociation said.

It quoted a statement by the Minister of Industries and Commerce (Mr Marshall) in announcing the agreement between Morrison's and Raleigh Industries, Ltd., on September 1,1962, in which he said: “The company is aware that it is to receive no special tarifl protection, nor any specific share of the New Zealand market ... it will market its product in competition with other available brands of machine.” The association submitted that the company applying for protection was unable to satisfy most, if not all of the criteria promulgated by the board in its report to the Minister of Industries and Commerce in June, 1963. It appeared most unlikely that there was an export potential for New Zealand-made or assembled bicycles or components.

The association felt the board’s attention should be drawn to the fact that Morrison Industries, Ltd., had introduced a make of rear hub that had never been seen in New Zealand before, and which was of a type that went out of production in England some 20 years ago.