'Watties profit less than 1c a can’

Press, 3 May 1977, Page 1

'Watties profit less than 1c a can’

Recent criticism of the annual profit and the high prices charged for tinned fruit by Wattie Industries, Ltd, has been countered by the release of the group’s profit from one large tin of sliced peaches — less than 1c per can. "The profit Watties receive from one 820 g tin of sliced peaches is I.lc before tax. After tax it is 0.6 c per can,” said Mr G. J. Wattie, the group’s managing director. "If we did not have the volume of sales we could not possibly maintain this figure,” he said. J. Wattie Canneries, Ltd, is only one part of the Wattie group and last year the entire canning operations, including pet foods and soft drinks, made up only 21.9 per cent of the total group sales. Canned fruit made up 3.9 per cent of the total group sales, and pet foods 16.8 per cent.

Merchants, who buy in bulk at 59.6 c per tin, add a further 10.9 c and charge the retailer 70.5 c per tin — a standard price agreed upon by all merchants. Retailers can buy the goods at cheaper prices from self-service stores where the cost of the 820 gram tin is about 67c. The suggested retail price is 88c which allows the retailer to add 17.5 c to the wholesale cost. The actual cost of producing that 820 gram tin of sliced peaches is approximately 50c. The Watties factory price of 59.6 c per tin includes a charge of 8.6 c for freight and distribution. This cost is an average, calculated from the costs of distribution to every town in New Zealand.

Retail prices show great disparity — ranging from 69c per tin for a supermarket special to 96c per tin at a beachside dairy.

Central Christchurch food store prices were mainly in the 82c to 88c range. Watties used only first grade peaches in its tinned fruit, said Mr Wattie. The majority of orchardists in the Hawke’s Bay area depended on the Watties Canneries as their sole or major outlet. Almost 80 per cent of the fruit Watties use came from this area, he said. “The Watties group accepts that it will always be exposed to a certain amount of criticism and asks only that such criticism be well founded. It welcomes responsible criticism which could lead the group to a better performance,” said Mr Wattie.