Orion not given petrol wholesale licence

Press, Volume CXI, Issue 32568, 30 March 1971, Page 3

Orion not given petrol wholesale licence

TNew Zealand Press Association) WELLINGTON, March 29. The Motor Spirits Licensing Authority has agreed with objectors that Mr B. Halliwell, as trustee for Orion Petroleum, Ltd, has failed to establish a prima facie case for a licence to distribute motor spirits wholesale. . .

The Authority, in a decision released today, decided this on the basis of Mr Harwell's own submissions, without having to caD on the objectors to give evidence. The objectors were the six present wholesalers, BP, Mobil, Caltex, Atlantic Union, Europa and Shell. On the submission that Orion Petroleum, Ltd, if established, would be a counterpoise to overseas-owned and controlled oil companies, the Authority said the act gave no direction whatever

that preference was to be given to domestically owned companies. Europa, a New Zealand-owned company, received no preferential treatment.

“The Authority is charged to administer the law as it finds it enacted, not to make law for itself,” the Authority’s decision said. TRADERS’ SINS Mr Halliwell had told the Authority of various devices by which wholesalers had sought to enlarge their shares of the market by sponsoring retailers in various ways, but the Authority did not think it was its duty to use its powers to discipline traders

for past sins of omission or commission. It noted, however, that Orion’s own proposals to gain entry into the Wholesale market were incompatible with the spirit and letter of the legislation. While the applicant was seeking to establish the need for the service he proposed, it was to be limited originally to Auckland and Waikato, and the rest of New Zealand could apparently get along without it for at least some years.

“In truth, of course, the concentrations of population and, the economics . of the short hauls with larger turnover prospects than in the sparser areas is the inducement appealing to Orion,” the decision said. There was no evidence whatsoever before the Authority of the need for another wholesaler; nor had the applicant attempted to prove that he could supply petrol on better terms. AGAINST SPIRIT

Orion had, proposed that 40 per cent of its shareholding would be reserved fot retailers. But it was contrary

to the spirit of licensing for a retailer to be a member of a wholesaler, as by shareholding. The legislation declared that it was in the public interest that retailers should be free to obtain supplies from any wholesaler, and free to change their wholesalers at will.

The Authority said the evidence of Dr W. B. Sutch contained no facts relevant to the issue. His testimony was in essence a paper 6r essay delivered for another purpose: a political argument bn the desirability of companies trading in New Zealand using locally subscribed capital and retaining more of the profits in this country. Since the abolition of differentials in the price of petrol in various parts of New Zealand, wholesalers’ deliveries in remote areas were in effect subsidised by shorthaul trading. Orion’s proposals were for short-haul trading—the lucrative swings without the less profitable roundabouts. A wholesaler not proposing to serve remote areas would have a

very real and unfair trading advantage. MINISTER’S VIEW The Authority agreed with the submissions of the Minister of Industries and Commerce (Mr Shelton) who said that Orion’s proposals would require the use of more capital and equipment to supply the same amount of motor spirit, and would inevitably mean more cost to the consumer. “In the economic situation in New Zealand, when the Government itself is being obliged to limit substantially its own expenditure, I would be concerned at any proposal which increased the call on resources. without the promise of a clear and substantial benefit to the economy,” the Minister said. The Minister had also suggested that if oil in commercial quantities were discovered in New Zealand it might be in the national interest to give the successful discoverer a wholesale licence. A further licence granted now might restrict the scope for granting such a licence.