Meat Board steps into U.K. market

Press, 22 February 1977, Page 2

Meat Board steps into U.K. market

PA Wellington | The Meat Board is; setting up its own trad-; ing company in Londonj to buy in lamb and at-' tempt to stabilise thej British lamb market. "The board has oeen compeled to intervene tn the UK. iamb market because ofi the unprecedented falls ini the price of New Zealandlamb over the last two{ weeks, which it considers to! be quite unjustified,” savs aj statement from the board. The company will begin! buying immediately. "In order to stabilise the! market, the company will offer to buy lambs at what; it considers' to be a reasonable price. Initially it will offer 40.5 pence per lb for PM grade lambs delivered ex-ship, prices for other grades reflecting market differentials. “It is intended to hold thelambs purchased and they will be resold when market! conditions improve.” the! statement says. “Direct market inter- j vention is the only really effective weapon the board I has available to deal with a! sudden price slump in lamb,! the severity of which is without parallel in the long l

ihistory of our lamb tradeI with the U.K. . “The board is acting not! jonly in the interests of pro-| Iducers but also for the econ-| omic well-being of the •nation. Britain is still by far 1 our major customer for lamb ! and sales there last season learned New Zealand $270 | million in overseas ex’s change. ! “The board believes the' sj action it is taking will be r o' i the ultimate benefit of the i;lamb trade in Britain. ,i “Moreover, the price we J get for our lamb in Britain Jinfluences the returns we ob- ' tain for it in other markets. J “With so much at stake, (the board refuses to sit idly J by and face the prospect of -1 prices dropping even lower,” 7 the statement says. Meat producers would generally approve the deci- • sion, said the meat and wool I section chairman of Feder- . ated Fanners (Mr John Falconer). I Although accepting the . need for the board’s decision J at the moment, meat producJers would seek clear J answers on a number of questions, he said. .! "Obviously, a major cause ■ of the sudden market weak[ness is the bunched lamb ar--II rivals directly resulting from J the freezing workers’ load- ; out ban last November. ;i However, other questions

need answering: Why was this situation not foreseen and averted? Are all companies involved in weak selling? If not, what are the characteristics. including financial viability, of the weak sellers and should their lamb export licences be seriously reviewed? Is there adequate cold storage space ;in the U.K. to cope with market situations of the .type occurring at present?” The Prime Minister (Mr Muldoon) has endorsed the actions of the meat board. “1 think the idea is a reasonable one in the way that they put it to me,” he said yesterday. The London correspondent of “The Press’’ reports that members of the Imported Trade Association have made it perfectly clear that the establishment of such a company is an ill-conceived interference in the trade. "We don’t think the board should get involved to this extent,” said one source in the trade. “The board will alienate retailers by setting up this company and slow down the expected increase in consumption. “I hope the board has not panicked unnecessarily into decisions it will regret later.”