A Question of Costs

Dominion, Volume 28, Issue 283, 27 August 1935, Page 11

A Question of Costs

Sir, —Your correspondent. H. Stratford, is compelled to use an analogy that was "used so effectively about 1900 years ago,” to assist him in the discussion regarding cost of landing British goods, and why the price of butter to New Zealand consumers is much higher than the retail price in England. I am afraid the analogy used by your correspondent is just about as obsolete as Mr. Stratford’s general knowledge of costs..

In a previous letter, your correspondent wanted to know why an article which sold in England at 2/11, was retailed iu New Zealand at 6/11. I endeavoured to show him quite clearly that it costs 107 A per cent, to 115 per cent, to land dutiable British goods into store in New Zealand. Exchange, duty and sales tax were responsible for not less than 55 per cent, of the total landed cost.

I have no desire to side-track your correspondent; he has attacked retailers throughout New Zealand, and must be prepared ,to stand a counter-attaek; he should prove his statements or withdraw them unconditionally, for he has cast a slur on the integrity of retailers generally. The question of the cost of manufacture of butter by his company does not come into this discussion, but unless the cost of 8/4 per cwt-, included ail distribution costs, .then I should say the cost per cwt. is excessive.

Mr. Stratford mentioned that retailers get Id. per lb. for distributing butter; does he expect the retailers to give this service to butter factories free of cost'.' It cannot be done. The factories of New Zealand do not mind spending thousands of pounds on butter 'boards and distributing agencies in London; why expect the New Zealand retailer to do this work for nothing? Tiie wholesale and retail prices for factory butter are fixed by the Hawke’s Bay Butter Committee, and I might mention that all butter factories in Hawke’s Bay, and several wholesale distributors, are members of this committee. The margin fixed for the retailer is. usually Id. per lb., and surely he is entitled to some remuneration for distributing butter for the factories throughout his territory? After all, I only wanted to know why the export price of butter was 88/-, and at the same time the factory price to Hawke’s Bay retailers was 121/4. Will Mr. Stratford make this quite clear to me, without using any obsolete analogies, and above all, keep to the questions in dispute; I am not discussing the manufacture of 'boots at present.—l am. etc., ALERT. Hawke’s Bay, August 24.