A SERIOUS PROBLEM

Dominion, Volume 19, Issue 256, 13 July 1926, Page 12

A SERIOUS PROBLEM

FREEZING WORKS AND THE MEAT EXPORT TRADE FUTURE OF THE INDUSTRY THE ONLY SAFE WAY OUT The views expressed below on the position in regard to the meat freezing industry are of particular interest at the present time. They represent the personal opinions of Mr. J. S. Jessep, vice- chairman of the Meat Producers' Board. "The position of the frozen meat industry,” remarks Mr. Jessep in a communication to The Dominion, “demands the serious attention of the country. In New Zealand wc have the pronounced drift of the freezing works gradually passing into a few hands. The causes which induced the building of more freezing works than are now necessary in New Zealand are well known. During the war all these freezing works served their purpose and unquestionably saved New Zealand as a whole many millions of pounds through being able to _ kill, freeze, and store large quantities of meat until shipping was available. “To-day, however, with more freezing works than are for the time being necessary for the country’s requirements, the competition for stock is gradually forcing out of existence all except those freezing companies which are prepared to buy stock to keep their works going, and the day of freezing companies running as freezing works only is passing, “A few large meat exporters are gaining control. In many cases they demand and receive from freezing works rebates on killing charges, which makes any pretence of earning interest even on a much reduced capital value utterly impossible. Unquestionably the freezing industry is over-capitaiised, but it is of importance to the country to see that with the reorganisation of the. industry the control does not pass entirely out of the hands of the producers and into the hands of large meat exporters, many of whom have extensive interests in other parts of the world. The freezing industry in New Zealand in the interests of the development of the pastoral industry and of the Dominion as a whole should not be dependent for existence upon the necessity of making its profit out of the meat itself. This was not the purpose for which many works were erected. The industry should be brought together, capitalised on a basis with due regard to the -equirements, present and future, of each district, and then carried on as a freezing business only, apart altogether from speculation in ment.

“The necessity for a thorough investigation and'the working out of a practical scheme of amalgamation on a sound basis is of vital interest to the Dominion. Such an amalgamation should be brought about on a capital basis which would allow for the payment of interest and depreciation, whilst giving the lowest possible freezing rate consistent with New Zealand’s standard of wages. This freezing rate should be the same to farmers as to exporters in each district. "Unless the industry is stabilised it is inevitable that the’ control of all freezing works in New Zealand, and through the works the meat trade, will entirely pass into the hands of a few meat exporting firms. If the present regulation preventing the free sale of freezing works is maintained and no alternative provided, in actual fact it means that the large meat exporting firms will eventually gain control of all freezing works, which do a freezing business only, without the necessity of paying for them. “Very great savings could be effected bv concentrating killings in each district, especially at the opening and close of each season, by saving unnecessary railage to distant works (to the detriment of the stock) and by generally . working this great industry in the interests of the producers and the Dominion as a whole. “There is a marked contrast between the position of the freezing works of New Zealand and the cold storage of England. . Cold stores in England were, especially during the war period, enormously overbuilt and over-capi-talised. However, as they are practically all controlled by large interests and work together almost as one corporation, they have been able to maintain high rates of storage and earn a high rate of interest. This high rate of interest earned upon an industry which is very much more overbuilt and over-capitalised than the New Zealand freezing industry the New Zealand producer pays through a high storage rate artificially maintained. "Another point of view in connection with the cold storage position in England is the fact that the largest owners of cold stores are the largest buyers of our meat. If therefore a farmer exports his meat and refuses to accept such c.i.f. price as is offered

he is under the necessity of putting his meat into cold stores controlled directly or indirectly in all probability by the eventual purchaser of his meat. Organisation can only be met by organisation. All negotiations to bring about a more reasonable cold storage rate have failed, and the time has arrived when New Zealand producers should have their own cold stores in England.”