TOBACCO TRADE

Dominion, Volume 22, Issue 265, 5 August 1929, Page 12

TOBACCO TRADE

mor2ng P written by comment It is surely too much to ex pect that the statements " ine t d hi^ e g tn nre likely to convince the tninaing public, but even with this doubt in view certain facts given must be contradicted and certain questions asked. „ . In the first place, who are the shopkeepers whose methods are as antiquated as are their ideas of a reasonable profit. The tobacconists? No, certainly not. Yet. Sir, your correspondents letter.nn lilies that they are. Let Messrs. MeKenzie, Ltd., question any wholesale houses as to the business capabilities and shrewdness of their tobacco clients. The answer will be pretty plain. I fail altogether to see how the percentage of profit—i.e.i 220 per cent, per annum —is arrived at. It is absurd to say that because an average of, say, 8 per cent, is made on one fortnight s trading (presumably on one outlay), approximately 220 per cent, is made oni a year s trading. The percentage of profit still remains at 8 per cent. Messrs. McKenzie, Ltd . have apparently overlooked the important fact that they have 26 outlays per annum! Who are and where are the tobacconists who are paying up to £2OOO a year for rent? If your correspondents persist that such is the case, I accept their word immediately. 'ut on the other hand they must not confuse tobacconists with hairdressers or the proprietors of toilet saloons. If they do, appropriate allowance must be made for each department, and the rental cost of £2OOO immediately becomes divisible by three or four. Price cutting, as Messrs. McKenzie, Ltd., state, exists in several other trades, to-day. That is a defensive statement, Sir. But it certainly does not exist .to such a drastic extent as in the tobacco trade. The benefit of this tobacco pricecutting. they state, is passed on to the public generally, but they do not say at what or whose cost. They do not say that it is at the cost of financial chaos to hundreds of tobacconists throughout the Dominion !

Finally, an auditor's certificate is triumphantly displayed by them disclosing the fact that the percentage of profit on tobacco sales made by them last year was 8.301’ per cent. One has to look closely before one observes that this 8.301 per cent, represents the “gross’ profits. No mention whatever is made of the “net” profits. I am in no way connected with any retail tobacco venture in the Dominion, but if there is a tobacconists’ organisation or association in New Zealand then good luck to it in its war against pricecut tins. —I am. etc.. NOT THE PIPE OF PEACE. Wellington, July 30.