‘Overriding importance of the consumer’

Press, 3 July 1978, Page 3

‘Overriding importance of the consumer’

The world’s dairy industries would eventually be forced to recognise the overs riding importance of the consumer if they were to survive on their present scale, the chairman of the New Zealand Dairy Board (Mr A. L. Friis) told a major dairy conference in Paris. Addressing the economic committee of the International Dairy Congress, Mr Friis said world dairy industries would not be "doomed” if several essential factors were recognised and acted on. “We must recognise the

mutual interests of producers and consumers, and accept that in the end the consumer will decide how much milk is produced in the world,” he said. “We must all agree it is vital that market shrinkage gives way to growth, (and) to make this possible it is essential that the full reservoir of government support throughout the world be used in a way that permits and fosters growth. “Only in this way can we liberate the dairy industry’s enormous potential and tap the latent consumer demand

that awaits us,” Mr Friis said.

Under present conditions, the reality was that world dairy trade simply did not exist as a single entity. Instead, there were the segregated main markets of the Common Market, the Soviet Union, the United States, India, and Poland — which between them accounted for two-thirds of total world production and consumption. “The major dairy-con-suming markets are more or less insulated, by official barriers, from commercial influences from outside their borders and as a result price competition can play little or no part in balancing production and consumption in a world-wide sense.”

Consumption of milk and dairy products was falling steadily in most of the major consuming areas in spite of population growth, but production was remaining steady, backed by artia ficially supported price's. Within the E.E.C., butter consumption had fallen about 10 per cent in the last decade, a loss of market equivalent to almost 200,000 tonnes (almost two years New Zealand butter exports to the Common Market at present levels).

“It is nonsensical that those responsible for the biggest single dairy market in the world have been paying export subsidies of about 70 per cent of the domestic price in order to move perhaps 5 per cent of their milk, and in doing so have obliged competing producers to accept only one-third of the return paid to their own,” Mr Friis said. The "ultimate absurdity” was the export of heavily subsidised dairy products at less than a third of the domestic price to the oilproducing countries whose high prices had severely affected the economies of the subsidising nations. “As a producer, I am appalled by these negative trends and suggest we should pause and think before it is too late, and that we should seek constructive ways of expanding markets and liberating trade in our mutual interests,” Mr Friis said. “I emphasise that a producer without a consumer is doomed to extinction’,’ he said.