BEER PRICE HEARING Consumer groups walk out

Press, Volume CXV, Issue 33883, 1 July 1975, Page 2

BEER PRICE HEARING Consumer groups walk out

(New Zealand Press Association.*

WELLINGTON, June 30.

A consortium of consumer groups withdrew from the Price Tribunal hearing of an application for an increase in the price of beer when it resumed in Wellington today.

Representatives of the Federation of Labour, the Combined State Ser-‘ vice Organisations, and the Campaign Against Rising Prices walked out after differences with the Brewers’ Association. The hearing, to decide on an application from the brewers for increased prices, opened this morning. Immediately, counsel for the consortium. Mr B. Bomholdt. sought permission for the group to withdraw. In a written submission, the consortium said that on Mav 13 it was given jointparty status by the tribunal. On May 14 it wrote to the Brewers’ Association and the Department of Trade and Industry asking for full details of their submissions to the hearing. Two days later, Mr Bomholdt received tile department’s report on the brewers’ submissions. The next

day he wrote to the brewers’ | Wellington counsel request-: ! ing relevant details about the | , case. Assurances of confidential treatment and a promise ! to supply the consortium’s report, were given. ‘General' information The brewers gave material of a general-industry nature, without details about individual companies. Mr Bomholdt told the tribunal that the consortium could exercise little effective party status without relative information and time to proIcess it. | The department asked for j the case to be adjourned until the brewers supplied adequate information. i The consortium claimed 'that it received insufficient information to brief its case, and withdrew from the hearing. I "Until such time as the i Government, through Parliament. gives effect to the granting of unequivocal party I status in proceedings such as

these for clients such as represented by the consortium, then such clients regretfully will not seek to participate in any way in further proceedings of this tribunal,” the group said. Mr L. Southwick, counsel for the brewers, said his industry had never opposed the admission of the consortium to the hearing. "Once the situation had the industry gave information requested by the tribunal to Mr Bomholdt. No endeavour was made to avoid that,” he said. The Brewers’ Association is claiming an increase of almost 30 per cent in the price of beer to cover $17,549,000 in extra costs since August, 1974. Giving evidence for brewers, Mr R. Tipping said that he had been an accountant for 25 years, and had wide experience in the liquor field. In 1970 and 1971, the years before price control was reimposed on the brewing industry, the profitability of brewing companies was only a little better than the average for all in industry and commerce.

Comparative profit Mr Tipping said the industry’s profit for the six months to September of last year was 10.4 per cent below that of industry’ generally. The increase sought would bring the return on shareholders’ funds to less than 15 per cent — not a realistic earning. The average return earned by industry was 23.5 per cent. "Were the Brewers’ Association to claim sufficient to provide the average rate earned by industry generally the application would have required another $ll million.” The five-month delay in implementing the application before the tribunal had cost the breweries about ssm. Cost increases in the last month added $908,000 to New Zealand Breweries and Dominion Breweries expenses. The hearing will continue tomorrow and on Wednesday.