EFFECTS FEARED

Dominion, Volume 27, Issue 17, 14 October 1933, Page 17

EFFECTS FEARED

Restricting Marketing BUTTER AND CHEESE Arguments Against Scheme “My directors view with deep con cern the proposals of marketing of dairy produce as at present under consideration by the Dairy Produce Board, and I have been instructed to protest to you against the proposals being put into force before they have been referred back to the industry,’’ runs a letter which has been forwarded by the Rodney Co-op. Dairy Ca, Ltd., to the Minister of Agriculture, Hon. C. E. Macmillan. “It is granted that they were approved of by the ward conference, htlt those members did not have, in the majority of cases, th ® the districts they represented, the letter continues. “My directors’ views of the position are as follow, and they would ask you to give them your very careful consideration before y.ou allow the dairy board to act on the lines suggested with such an important matter as the disposal of our produce. Interference Resented.

“In essence, the proposals, if adopted. would result in restriction of and Interference with existing marketing methods, which, while admittedly not perfect, are substantially efficient, and cannot be held responsible for the fact that our butter and cheese prices do not approximate more closely to those obtained for Danish butter and Guadian cheese respectively. "It is obviously the intention of those responsible for the proposals to cut down and limit the channels through which our butter and cheese have up to the present time been distributed. This will apply to consignments. It will also apply to f.o.b. business, and may easily result in partial or even total abolition of f.o.b. trap-tactions. To any thinking dairy producer with the interests of the industry at heart, and to anyone else with a knowledge of the United Kingdom market, it must be obvious that to interfere in any way with the free and unfettered flow of our butter and cheese into and throughout our one big market is just plain folly. Particularly is this so ?t the present time when the broad general supply and demand position is in buyers’ favour, and pur urgent need is to increase and not decrease our range and number of buyers. New Zealand’s Actual Customers.

“Throughout the United Kingdom there are thousands of traders, large and small, who are daily selling butter and cheese, and these are New Zealand’s actual and potential customers. The business of these traders is being sought after by salesmen whose business it is to sell ipitters from Denmark, Finland, Siberia, Argentine, and a number of other countries, and cheese from several points, particularly Canada. The trader in the United Kingdom is particularly well catered for both with regard to quantity and quality, and is in a position to pick and choose. Further, the geographical positions of most of our competitors give their representatives and salesmen a big advantage in more ways than one. “We have to attract and encourage buyers in the United Kingdom in every possible way. We want those who are already buying New Zealand butter and cheese to keep on buying and to steadily increase their purchases, We want those who up to the present time have been buying only butter and cheese other than New Zealand, to start buying our New Zealand produce and to keep on doing so.” “When you particularly want a man to purchase the goods you produce, and there are dozens of other producers’ representatives waiting at his door with similar, but in some respects better, quality goods, is it good salesmanship—is it anything but rank folly —to dictate to him as to through which channel he is to procure the goods you are producing? “Our crying need, greater even than the question of obtaining higher values, is to ensure that our present production and our increasing future production is and will be readily absorbed, and it must surely be obvious that we must, utilise every channel through which our butter and cheese can pass to the distributor, and through him to the consumer.

“Genuine f.o.b. business Is becoming increasingly established with actual distributors. The genuine f.o.b. buyer, who is responsible for the bulk of the f.oJb. buying, cannot be accused of manipulation of the market at the expense of consignment values. W.hen a buyer has purchased, he works for increased prices, which makes for a higher and better market, and so helps to make and maintain the market for the producers’ consignments. Damaging Goodwill.

“Every genuine f.ojb. buyer is entitled to, and certainly will, run his business in the way that suits him best, and not in a way to suit anybody else. He is certainly not going to be dictated to by those who are seeking to obtain his custom. He has in the past bought, and will continue to buy, through the channels which suit his own methods of business, and which suit him personally, and the personal touch is the most important factor, and must not be overlooked. If a buyer is to be told either that he cannot buy New Zealand butter and cheese for forward delivery when he wishes, or that lie can buy but must do so through certain specified channels, which would necessitate his forsaking his customary channel or channels, and possibly break an old-estab-lished business and personal connection, there is a very grave risk, and in many cases a certainty, of permanently damaging goodwill, discouraging trade, and driving our good customers, Including some of the largest butter buyers in the United Kingdom, into the arms of our competitors. “While there is some room for improvement in marketing conditions, it is the considered opinion of some of those who are on the spot and have sound judgment and the fullest knowledge arid experience of United Kingdom market conditions, that If the proposed restrictions are adopted the New Zealand dairy producer will be very badly handicapped on the United Kingdom market.

“The statement made at times that the method whereby dairy companies make and control their f.o.b. sales individually results in companies competing with one another to their disadvantage, is substantially Incorrect and misleading. While very occasionally a weak f.o.b, seller la in evidence,

it is undoubtedly a fact, and one that can be demonstrated, that ninety-nine times out of a hundred when f.o.ib. business is being done there is more competition on the part of buyers for available supplies than there is competition for orders on the part of the dairy companies. The latter are never forced to sell, having a consignment market as an alternative at all times with every facility for financing the butter awaiting shipment. Buyers Will Push Sales. “Every time a buyer in the United Kingdom purchases a parcel of New Zealand butter or cheese, he automatically puts additional life and vigour into the pushing of the New Zealand product. When a buyer assumes the ownership of and responsibility for goods, it is obvious' he is going to push the sale of same to the very best of his ability. This is one of the most important aspects of the business, and one which must be very fully appreciated by all those connected with the industry in New Zealand. It is imperative that we should do our utmost to get every individual in tlie United Kingdom, including all classes of traders and consumers, interested in and buyers of our New Zealand butter and cheese. Every possible inducement has got to be given, and every ell’ort made to attain the desired objective. Everyone who will stop and visualise for a moment the material and psychological effect on the distributors and consumers in the United Kingdom of anything in the nature of restriction will realise the folly of bringing forward any such suggestion, particularly at the present time.”