L. D. Nathan sales rise, but problems continue

Press, Volume CXII, Issue 33094, 8 December 1972, Page 18

L. D. Nathan sales rise, but problems continue

(New Zealand Press Association) AUCKLAND, December 7. The group sales of L. D. Nathan and Company, Ltd, in the first three months of the current year were higher than those in the corresponding period of 1971. The sales of Waikato Breweries (50 per cent owned) were satisfactorily ahead, but industrial problems with Innes Tartan, the soft drinks subsidiary, continued the chairman (Mr L. D. Nathan) said at the annual meeting.

Commenting on the industrial problems at Innes Tartan, Mr Nathan said that urgent steps included the appointment of a full-time group industrial relations manager.

Rationalisation studies at the Oasis soft-drink complex were continuing. Partly as a result of the Innes Tartan problems, the Coca Cola franchise company had traded “in spectacular style” in the opening months of its financial year, he said. He confirmed that the combined net profits of L. D. Nathan and Bond and Bond, with which it proposes to merge, exceeded $1,250,000 in the latest full trading year. The combined profits should improve the company’s earning rate on capital in spite of the costs of the merger and of servicing the cash part of the deal. In the three years since the two companies came together in tea and coffee blending and packing, three factors had led to a feasibility study on a merger. They were: Rampant inflation and economic instability. Severe competition in price and service in grocery wholesaling and retailing. Rises in operating costs and in the capital costs of building new warehouses. An essential feature of the merger was to hold costs. The brewing industry would apply for a price increase in the new year, Mr Nathan said. The industry was facing a “hefty” increase in wages now being negotiated. “The days of almost auto-

matically passing on costs to consumers are gone. This has come about rather more from the initiatives of industry than from Government controls. However, there is a definite limit to the extent increased costs can be absorbed,” Mr Nathan said.

i Because of recent, and > pending wage increases, the i means of slowing these and r of apportioning the extent to • which costs may be fairly — • to all parties — passed on to • the consumer must be an ab- ■ solute priority for the new Government, he said.