Earlier duty cuts welcomed

Press, 18 December 1985, Page 1

Earlier duty cuts welcomed

Christchurch retailers generally welcomed yesterday’s announcement that import tariff cuts would apply from tomorrow instead of January 1, although they are still unhappy that the Government chose the busy holiday trading period to introduce the cuts.

Smiths City Market, one large Christchurch store trading in a number of the items which no longer have tariffs, stands to lose a sixfigure sum in price reductions it must absorb. The company’s general manager, Mr Peter Leeming, said last evening that the store had dropped its price immediately the cuts were announced. Microwave ovens and videos retailing at $l3OO to $l4OO last Friday were marked about $lOOO when the store opened on Monday. Mr Leeming said the store had decided that to remain competitive in the Christmas trading rush it had to cut its prices immediately. It was a policy shared by other video and microwave dealers. They were among the first to cut prices in a bid to keep people buying after the tariff package was announced last week.

Mr Leeming said tomorrow’s date would reduce the disruptions caused by

firms waiting until after January 1 to collect goods from the wharves in the hope they would miss the tariffs.

He had heard of- some firms that were thinking of sending imported goods back overseas and reimporting again after January

‘The bringing forward of the tariff cuts will stop all that disruption,” he said. He was disappointed that the Government had chosen this time of year to introduce the cuts. Stores were carrying heavy stocks because of the Christmas trade.

“There is no refund available to stores still holding stock on which they have paid tariff and most stores have been caught with a lot of stock, because of Christmas demand.” When sales tax was withdrawn on some items by the Government a refund had been made to retailers. Mr Leeming said it would have been realistic for the Government to make provision for a refund for wholesalers and retailers holding stock on which they had paid tariffs.

“In all, with our subsidiaries, it will cost a very, very substantial six-figure sum, and that is a loss we have to stand. We sympath-

ise with any customer who bought goods a couple of weeks ago and now feels cheated.” Other retailers shared Smiths’ attitude towards reducing prices to keep customers. Camera retailers followed the lead of the video and microwave retailers.

The managing director of Pan Pacific Cameras, Ltd, Mr Max Gosney, said he was delighted at the earlier introduction of tariff cuts.

“We already had reduced prices,” he said. “Our attitude was that if we did not sell existing stock at a reduced price now, we would have to anyway when the duty came off on January 1. “It has been an embarrassment and with the falling value of the New Zealand dollar we would be losing, so I am delighted that the Government has seen fit to make the cuts applicable now. “The timing of the announcement last week was wrong,” he said. “If the Government was going to bring it in on January 1 it should have shut up until then. “The consumers immediately reacted and pressure was put on the retailers. Most consumers don’t realise that retailers have

bought the stock they have in and have paid the duty on it already.” Mr Roger Grenfell, of Hollands Honda, said the earlier introduction of tariff cuts would not be of benefit to motor-cycle retailers.

“They are mostly on a three to four months lead time with their orders, so they probably won’t see any benefits until FebruaryMarch.”

Most of the duty was taken off motor parts last February, he said. Among tariff cuts on everyday items are

cameras — were 17.5 per cent, now free; clocks — were 30, now free; motorcycles — were 30, now free; shavers, hair clippers etc. with self-contained motor — were 20, now 5, free from Canada and Australia; domestic food grinders — normally 20, now free; portable hand-held vacuum cleaners, floor polishers, juice extractors, food slicers — normally 40, now free; sports goods (billiard cues, billiard balls, indoor bowls, snow skis, rackets, nets for tennis etc.) — were 40, now free.