Wattie’s increases ‘don’t cover costs’

Press, 28 October 1982, Page 6

Wattie’s increases ‘don’t cover costs’

PA Wellington Price rises announced by Watties yesterday for most of the company's canned and frozen foods would only enable it to recover one-third of the extra costs it had incurred since the price freeze, according to the company’s general manager. Mr Bevin Helm.

The increases — 1c for most standard canned and frozen products and 2c for some larger items — will take effect from November 1. They covered increased Government charges and import costs, said Mr Helm, from Hastings last evening. Two weeks ago Watties announced a 24.5 per cent increase in its audit profit for the July 31 year - from $231680.000 last year to $29,680,000.

Sales rose 15 per cent from $457,581,000 to $526,127,000. including $52.8 million in exports compared with $39.3 million last year. •The return on shareholders' funds ($217,317,000 at Julv 31) had increased from 12J per cent to 13.6 per cent, the best result achieved by the company over the last five years. (Mr Helm said Watties regretted the increases but freight and fuel costs had risen sharply since the start ofJhe freeze.

■‘.’They will only enable the

company to recover $1.5 million of the $4.5 million it has had in increased costs since the freeze.

“The company will have to carry the can on the remaining $3 million for items not exempted under the freeze." The breakdown of the increase is $BOO,OOO increases in rail charges: $130,000 road transport; $500,000 fuel charges. The Minister of Trade and Industry. Mr Templeton, said Wattie’s application could not be considered as a separate case just because an increase would affect so many consumers and the company had recently announced a 24.5 per cent profit increase. “Provision has been made for this situation. We are all gaining from tax cuts and we are not in the process of putting companies out of business.

“We are trying to provide regulations to cover a wide range of activities. There are provisions for companies to recover certain charges. We cannot select one company."

The price rise for Wattie’s canned products was a bad omen for the “so-called price freeze." said Labour’s spokesman on consumer affairs. Mrs Ann Hercus, yesterday. “When a company as large and dominating in the market place as Watties climbs into the price-rise ring.

dearly dozens more giants will follow." Mrs Hercus said.

She said the price rise represented “the visible tip of an enormous iceberg, about to slice another jagged hole in the so-called price freeze."

Mrs Hercus also said the public should note with interest that Watties had just recommended a substantial increase in final dividends to shareholders and a 24.5 per cent increase in profit. Mr D. H. Thorp, chairman of the Combined State Unions, said reports of the Watties price increases indicated that big producers selling vast quantities of goods were getting on to the "hardship bandwaggon." “Watties products absorb a significant percentage of the food costs of working people and this is just one more example of the quite legal increases in prices that are taking place alongside a quite . blatantly unequal severe freeze on wages," he said.

"This is only the start. With many of the earlier price approvals, the increases affected a very narrow range of products. “I am quite sure that more and more major sellers will regard hardship applications as routine and that we will see everything going up as the so-called freeze progresses."