BUTTER BARGAINS.

Dominion, Volume 1, Issue 279, 18 August 1908, Page 2

BUTTER BARGAINS.

MARKETING SCHEME DISCUSSED. A BUYER'S OPINIONS. HOPEFUL FORECAST FOR NEXT SEASON. An oxtensive review of tho proposed cooperative marketing scheme of the National Dairy Association was outlined to a Dominion representative in Taranaki this week by Mr. S. Turner, F.R.G.S., the agent (and director) of Messrs. Wilier and Riley, the British produce merchants!

"You.ask'me," said Mr. Tumor, "what is my opinioii about tho National Dairy Association scheme? Well, so far, all the objects and aims of this Association are not mdde clear, but one of the objects is clear enough, and that is that it proposes to get cheap salesmen. That is, it hopes to cut the commission down to 2 per cent. This is nothing new. There are three firms already canvassing New Zealand for consignments at 2 per cent., but the firms who handle the bulk of New Zealand butter and cheese receive 3, 3}, and 4 per cent, commission." Why is this? "Well, the factory directors who appoint them do so because they believe they can return a higher net price than their competitors, despite the commission. Merchants Expenses. "It is very easy to combine and ship Homo and get the business done for 2 per cent, by any firm,who cannot get good enough returns to gain the agencies for themselves in Now Zealand, but any firm which sells direct to tho retail grocers from warehouses has to keep travellers, tako the risk of bad debts, etc.; and tho average wholesaleman's expenses are quite 2J to 3 per cent., while tho very best \Vholesalemeii in' England might be able to work at 2J per cent, expenses." How is tho wholesaleman going to cut down his expenses to enable him to sell for '2 per cent. ?

"There aro about twenty English importers of New Zealand butter and cheese, and there are quite 3000 wholesalemen who buy New Zealand butter and chceso from them. There are only two firm's represented in New Zealand which aro absolutely wholesalemen, and their commission is 3 and 4 per-cent. There are three other firms which sell from 20 "to 30 per cent, to retailers. Then the remainder are. either brokers ■or importers selling to wholesalemen. The Important Point. "The proof of the whole thing is the net price the; factory gets for its produce. It does not matter who sells it—the National Dairy Association or any other agent—if they cannot get tho factories the proper net prico. The factories are not going to throw away ■ money for tho sake of the idea of co-opera-tion. The firms who are agents for most of the butter factories have obtained their agencies by getting the best results, and if the factories send to the National Dairy Association it will bo compulsory for the National Dairy Association to get the best ligonts. I say 'to all the'factory directors and all tho milk suppliers of New Zoaland, 'See that you get as good a net price for September-March output as any other factory in New Zealand, and don't support any agent who cannot got you that price.' * Dlrcct to the Retailers. "Any three or four firms can soil all the produce that New Zealand exports, but that is not exactly what is wanted. • The butter must be sold direct to the retail grocers in Groat Britain, so that the factories get the best possible price. Any fool in England can sell butter, but it takes enormous ex- ' pense and wonderful organisation: to get the highest retail market price, seeing that New Zealand butter and cheese compete with all tho butter and cheese on the English market. If the National Dairy Association are to succeed, it will he necessary for them to use ' the wholesalemen to sell their butter to re-, tailors and pay a working commission, and not step bacK three or four years, and hand 8 the butters to tho importers. During the last four years many largo factories have been selling direct to the retailers. If .their net returns are compared with the impor-" ters' returns, it is soon Seen' that the factories are better off by at least 2s. to 3s. per cwt., thus saving the middlemen's pro--1 'fit. ' Good or Evil? "I claim that the best friends to tho butter factory directors and suppliers aro I tho agents who net them the highest re- ' turns, no mattor who they may bo; and when the National Dairy Association appoints the firms which can get it, the best prices it will bo on the way to succeed. Yes, my opinion is that the' National Dairy Association. can work a lot of good for tho. ■ Now Zealand factories, as it lias very good ; servants in its English representative and '. the New Zealand secretary; but on tho othor . hand the National Dairy Association can do a lot of harm, if it does not adopt proper methods. The cutting of commission is a very poor start. ' The Local Trade. "I was informed by Mr Hamilton, tho , secretary of the well-known Rongotea butter .factory, that tho Now Zoaland agents who sell to retail grocers in New Zealand charge 4 per cent, commission, and the Ne\v Zealand agents who sell to wholesalemen charge 2J per cent commission. These agents have not got six or soven different kinds of butter to compete' agaiiist like the agents at Home, and the retail grocers are not so liable to fail out hero as they are at Home. How is it then that there is an attempt to cut the commission in England below what is paid hero. "There aro men who talk about regulating the prices on tho Home market. If the present prices in Australia and New Zealand aro the result of that regulation, then it is a good thing for the factories. But how do they come to let all the butter go Home that they might sell hero at such famine prices ? I know it is next to impossible to control tho export to , mako tho most of both tho • Home market and the New Zoaland market, but it is absolutely impossible for New Zealand and Australian 'new chums' to go on to the London market and control and regulato the prices without .'falling' in very seriously.' Of course tho factory pays for the experiment. What It Costa to Get Trade. '• "It is said that, by combining, the Na- 1 tional Dairy Association will bo able to save tho agents' profit, one per cent. 011 this side. N Well, all I can say is if its costs a firm in ! England one per cent, to get consignments ■ from this country, their prices must bo poor. ; Our expenses during tho throe years I have 1 been travelling round tho world organising business liavo riot been more than J per ' cent, 011 tho whole of our consignments. An ■' importer might be able tq afford one per cent, to his agent ovo'r here, but a wholesaleman would have to have four per cent, commission in order to allow one per cent, over here.

High Prices. : "Tho agents in Now Zealand aro a very necossarjv evil, so far as cxpenso is concerned, but somo of them liavo predicted very high pi'ices and havo influenced tho factories to hold out for very high prieos, which have put a great deal into tho suppliers pockets. Last year I myself- predicted very high prices for butter and choose. This year tho season's prices should bo still greater. Tho farmers should not sell cheese under Gd., or butter under llifd. to Is., net, f.o.b. Wo shall not havo tho wild markets of last year, but wo shall havo a very high average. I havo preached consignment for three yeai's, oven at the cost of rebating something liko £7000 commissions; so it is very gratifying to seo the National Dairy Association adopt that system. Times may ohango, but open consignment is the policy for New Zta--Imd at present." I