DRAPERS’ PRICES AND COSTS

Dominion, Volume 34, Issue 181, 29 April 1941, Page 9

DRAPERS’ PRICES AND COSTS

Tribunal States Its Policy OFFER TO HOLD PUBLIC INQUIRY

An undertaking to hold at any time a public inquiry into drapers’ prices and costs is given in a statement issued yesterday, by the Price Tribunal in reply to one regarding the control of prices which had been made by the New Zealand Federation of Drapers, Clothiers and Boot Retailers. The federation’s statement was published in “The Dominion” on April 16. “It would appear from the statement issued by the Drapers’ Federation that the Price Tribunal’s ‘formula’ does hoc permit of it allowing a margin of profit on increased costs, but that is not so,” states the Tribunal. “The Tribunal always endeavours to treat each case on its merits, but its general practice is to allow only increased costs to be added to the price being charged by the trader on September 1, 1939, except when such price allows an unreasonably high margin of profit m which case the trader may be asked to absorb the extra costs or part of them, and except also where it is shown to the satisfaction of the Tribunal that a margin of profit on the extra costs is required in order that the business in question may be carried on with reasonable financial success having regard to the fact that war conditions obtain in New Zealand as well as in other parts of the British Commonwealth. “Soon after the outbreak of war the Drapers’ Federation made representations to the Tribunal for special treatment in regard to the administration of price control They claimed that if they were allowed to increase their prices only by the amount of increased costs their capital would be seriously diminished and the end of it would be bankruptcy for the whole trade.

Turnover Maintained. “Investigations made by the Tribunal led it to the conclusion that turnover in the drapery trade was being maintained and even increased over pre-war figures and that there was no 'fear that the dire results prophesied by the drapers would occur. That this conclusion was correct has been proved by the fact that figures now furnished by the drapers show that their turnover and profits for 1940 were even higher than those for 1939, and those for 1939 higher than those for 1938. “Ever since the outbreak of war and the passing of the Price Stabilization Emergency Regulations, 1939, the Tribunal has been very disappointed with the extent of the co-operation given by the drapery trade in the maintenance of price control It has worked out and furnished to _ the drapers systems by which indirect authorization may he given to groups of traders in various districts eo as to save them making individual applications, but recent investigations made by the Tribunal's inspectors in several large towns have resulted in admissions being made by drapers in those towns that they have consistently failed to co-operate. It is not suggested that this is the case in all New Zealand towns, though, speaking generally, the Tribunal has found it very difficult to get the drapers to afford full co-operation in the carrying put of the regulations. Fear of Lower Profits.

“The Drapers’ Price Committee admitted to the Tribunal in the course of recent verbal representations that it was not so much the past relations with the Tribunal which they complained of, but that they were afraid that from now on their profits would decrease. In view of the position as disclosed by the investigations, how can the drapers seriously suggest that they are heading straight for bankruptcy, and how can they possibly support the opinion which they say they have always held that the Tribunal’s ‘formula’ is unjust and unworkable?

“The Tribunal by letter of April 10 informed the drapers that after reviewing all the material at its disposal, it regretted that it was at the present time unable to see its way clear to make any variation in the present policy as, in the opinion of the Tribunal, the position of the drapery trade generally did not warrant any departure from such policy. The letter continued:—The Tribunal will continue to keep in close ; touch with the drapery trade, and in particular with your price committee, and will itself make independent inquiries from time to time so that any change in the position of the drapery trade generally will be immediately noticed. The Tribunal would be glad too if your committee or Mr. Berry will submit from time to time turnover figures or any other figures that will show any change in the position.’ The Tribunal desires to add that it is prepared at any time to hold a public inquiry into the matter of drapers’ prices and costs.”