Aust, pressure on conference

Press, Volume CXI, Issue 32677, 5 August 1971, Page 3

Aust, pressure on conference

(N.Z.P.A. Staff Correspondent) SYDNEY, August 4.

Australia was able to wring freight rate Concessions out of the Aus-tralia-Europe Conference because it had the conference “over a barrel.”

The Australian Wool Board’s threat to take' its business elsewhere influenced the shipping companies not

to increase freight charges in 1971-72 season.

Industry sources in Sydney say this was the prime consideration in the conference’s “no increase” decision, not the argument that the industry was in a “frightful state,’’ as has been suggested in New Zealand.

More than a year ago the Wool Board commissioned a report from European consultants on alternatives to the conference system. The board has never disclosed the contents of the report, but it is common knowledge that the board has received at least four offers from overseas shipping companies of cheaper freights than those charged by the conference.

In initial negotiations, the conference sought a 15 pet cert increase for wool, but it later dropped this to 11 per cent.

Despite its statement that “We cannot carry cargo at a loss,” the conference gave in quickly when confronted with the Wool Board’s threat to abandon the conference ships. Wool and sheepskins comprise more than 50 per cent of north-bound cargoes from Australia, and without these two products the conference service would be placed in jeopardy.

The conference has said bluntly in the past that without wool the service would deteriorate, and would be much more costly to shippers of other commodities.

In recent weeks exporters of general and refrigerated cargo and dried fruits have pressed the wool industry to remain with the conference.

These parties accepted the 15.73 per cent increase from September 30, subject to wool staying with the conference. By electing to remain with the present system the wool industry is now seen as subsidising rates for other commodities.

One source said today that the conference had been caught out by negotiating the refrigerated and general rate before wool. “It’s a good bet they’ll do it the other way round next time,” he said.