‘Significant’ Beer Increase Forecast

Press, Volume CX, Issue 32361, 29 July 1970, Page 1

‘Significant’ Beer Increase Forecast

(New Zealand Press Association) WELLINGTON, July 28. Significant beer price increases in the very near future were predicted by a witness today at the Price Tribunal’s inquiry into the increases of last December.

Likely substantial increases in the wages of hotel workers and the effects of the payroll tax would force the liquor industry to take this course, said Mr J. R. Tipping.

The survey showed that in six Wellington hotels the quantity of beer served in Boz glasses varied between 7.80 z and 7.850 z. Jugs, which are designed to bold 35.50 z, bad from 31.250 z to 33.570 z in them. In six Auckland hotels Boz glasses had from 6.50 z to Boz served in them, and jugs from 30.30 z to 33.30 z. The executive director of the Hotel Association (Mr J. Williams) said his association could not run round the country checking every glass. One run of jugs had been too small and had been melted down. Every subsequent run had been checked to ensure they had the correct amount.

Mr Tipping, a Wellington chartered accountant, was giving evidence for the Hotel Association of New Zealand. He based his statements on the financial position of the four main hotel-owning companies—Dominion Breweries, New Zealand Breweries, Ballins Industries, and Consolidated Hotels. The increased retail beer prices last December were fully justified, he said. “Indeed, in my opinion greater increases would have been justified.” The four companies were not half as profitable as comparable businesses, and they had had compelling justification for increasing their prices. It was impossible to guess the outcome of the present wage negotiations and the general wage order application. But if they increased

wages and salaries by 20 per cent- it would add $1,956,000 to the annual wages bill of the companies’ hotel divisions. The payroll tax would cost an extra $470,000. When the total was deducted from the expected combined profits of a full year it would leave insufficient profit to cover a reasonable allocation of interest to the hotel divisions, let alone provide any combined taxpaid profit on the many millions of dollars worth of assets. Mr J. D. Dalgety, appearing for the Federation of Labour, produced a summary of surveys undertaken by members of the federation and the Combined State Service Organisations. The figures showed wide variations in the amount of beer served in glasses and jugs at Wellington and Auckland hotels. Mr R. B. Cooke, Q.C., for the Hotel Association, said the figures were not relevant to the inquiry, but the tribunal president (Mr S. T. Barnett), while doubting their relevance, agreed to them being presented as evidence.