Free competition ’only effective price curb’

Press, 14 November 1977, Page 16

Free competition ’only effective price curb’

PA Wellington. Free competition among manufacturers was the only effective means of price control which was in the public interest, said the president of the Grocery Manufacturers’ Association (Mr J. A. Calvin) at the association’s annual meeting at Wairakei. Price controls were an anachronism and the day-to-day bureaucratic interference in the profitability of manufacturers in general, and grocery manufacturers in particular, was difficult to tolerate, said Mr Calvin.

He told delegates he found it ironical that many State enterprises ran at a loss, yet the State, through the'Lepartment of Trade and Industry, became the arbiter of industry by authorising the prices at which manufacturers might sell their products. Paradoxically bewildering, this charade we play makes a farce of private enterprise and competition in New Zealand. Could it be that we are far closer to total socialism than capitalism in New Zealand than many of us realise or would like to believe?

“We are also being regulated and legislated out of our minds. In 1976, 322 regulations were put through Parliament. What for? More freedom or restriction of our business, or for sheer political expedience?” Mr Calvin said that on one hand manufacturers were encouraged to develop, and on the other price controls removed the competitive element essential to that development.

“This redundant price control machinery could eventually prove disastrous to the grocery manufacturing industry, and it is imperative that the association makes it clear to both the Government and Opposition that

free competition among manufacturers,is the only effective means of price control which is -in the public interest as well as that of the companies concerned,” he said. In general the industry was a ready target for many types of Government legislation, he said. It was essential that the association continues close liaison with the Government and its departments to make them understand that the grocery manufacturing industry was not set up to cheat the consumer or the Government. Mr Calvin said the fall in retail activity had slowed cash flow, and that liquidity was “extremely tight.”

The effects of devaluation in November, 1975, plus the equal pay regulations, were now being felt fully.

These factors coupled with “the excessive wage demands made by the more militant unions,’’ had also contributed in no small measure to inflation said Mr Calvin. The fall in retail activity had been felt by all grocery manufacturers and many of the association's smaller members were seriously affected by cash flow problems. These problems were greatly gravated by similar difficulties further down the distribution chain, Mt Calvin said.