DAIRY BUSINESS
'; THE MARKETING SYSTEM
| "FIERCE COMPETITION AHEAD" ■ij . ' - ■ ; '
| ." ■' >'must concentrate; on'
'BRITAIN.'.-;
;j The report of the Overseas Delegation * of the New Zealand Dairy Produce "Con-* * trol Board wa3 available to-day." The j delegates w'e(\e Messrs. "W,.. Grounds, J, t 11. "Tliatkev/'iand^jy. t!...*Mption;; The ■• repottTis long" auU I'contains much'ijjatter •■ of technical 'fhter'est.td-milk production, J and; the manufacturing-of; butter . and: 21 cheese. It also deals with competition t. with wbicb New Zealand dainj produce J has to contend in the British markets. The delegates hold that "\Vhatever \ the future may have .in store in" the >. creatioiuof new markets, it.is clear that ;; we need at present to concentrate upon '.'. Great America will display j; an occasional demand ; I Germany, ■ too, .- with her industrial re-establishment, \vill Z affect the general position by. her in-' " creased demands. Inquiries are now be- • ing received for 'Uew Zealand Gutter from • that quarter, and arrangements have been niade for, a simply to. be available. ■?.■ . . . Deprived-of-the dairy products.of tliat ■ portion of Schleswig-Hblstein, ';• which has now been restored to the .t Danes,she will''doubtless; for some years, r require supplies from, outside sources.. ■V The. increasing production of several-of Z the European dairy countries with whom ■* Germany will- be anxious -to sell her inZ dustrialiiproductiona, .will .. ahn'pst ,cer-, " taiiu\r"lb'bk""'after her increased-demands ~ for food supplies.
■- :: /HIGH--QUALITY'ESSENTIAL. II "New' ,' Zealand "has established ' a C'j strorig position upon the British market .;; by reason of the general excellence of. '»■ hec'supplies. - This is ;not.. say ing that ,'; all are equally'good, or that"there is no ,-j room if or improvement. . :;; Nofavith-; ; standing the few .exceptions, that Panish *. and New Zealand stand in..' a; class by ■■ themselves at the head of'imported but- ;. ters,' while many discriminating buyers "; assert that New Zealand cheese has now I got definitely ahead of Canadian.. Only }■ one thing can enable us to maintain our J; position; the. supply of a uniformly-good; ■•< article! During 'the last; season large. X supplies of. Siberian butter ; came to'hand, ~l) which' it,"was* generally, expected would *■• break' the markefrj but it was mostly of ,?. secondary quality.-' New ZealaEjJ, prices ' £ were maintained. •} i The board then discusses the ini-. \i'- porters. "Some of the importers have ;. been ; connected with the New Zealand i trade since its inception, while others ■| havo been associated with it for many £ .years;,That-they.; .have,prospered in the I! business of their, choice is clearly aps;^ parent.: If further evidence of ■ this {..-v , wera<reqnired,''.jt'is^forthcoming in the ' "v; number of provision merchants who de- "; sire to become, impprters. Many picf' tiires have been-drawn of these importers for the guidance or confusion of ?i New Zealand dairy farmers.;, • .-. "/:% s ;iN -rootEYStreet. }' . If : "Haying . seen" 'Tdoley V" which tend importers are usually per-. r sonified in New Zealand—both inaivid- '.' ually and .collectiVely, and .- discussed. C with them everything we;thought of im•g mediate^interest to the.industry, we'can. y only report that we found them to be }• ordinary keen business, men, who.con- % centrate upon - thehi business, keeping " -ir^UitpiicJi^ith^aH^the^yradeSgread influences upon thejr 'market,; .*a'nd:? doing" what in their judgment is best for their • coosigning, factories, while they quite naturally, expect to get a fair turnover. , fpn themselves out ,'df 'ffieVJiransactioli.' .i'.iU 'Somelof.the'membe'rs.'h'aye.madS.. ?pe'fti|i}', studies,'of, important'allied subjects; iencea j'and-conclusions' being- freely '• placed . at'V burivvdis'posalX 'Cliijoughout the whole p'f "our:: iwestiga-; tipris,' everything possible 'was; done for ■us by-the importers. They, each; express-; .ed their desire to assist in whateverij\yas , decided upon by tie board in,'.the : .iriter-; ests of the producers.. ..,'■ ■'}, •■<?..';'.',;;? ■; '"V '■•:■ "We would further add our opinion ' that4possibiyi.no !bther b'ody^ of .men' could., have.ldbiie" better 'finder,.,the,:.sys» tern prevailing. If the system, provjd-' ..ed them "with alluring "thay cannot be criticised".for embracing; ■- ■ them/ .'',:'■'.'■'.'' .:'■'■' "'.'■.,"• -i.';, ■. .■/"■':' ,':";'. * :":The'delegates then"deal in detail with the wholesale and the chain-store; sys.te'm of retailing, by which 'anything from twenty; to. severaU'; hundreds.:',; of, shops are controlled by one company. . These organisations',' s as* ;thej".delegatesfound, "desire to buy" |s. near to the) producer as possible. F.o.b. sales made t^ro <ugh,.SSrio'u"s^agenc'ies li&vejjfrequeijt- ■ ly be^n*on' their^ac'eoiint." ;.Reference's made'to the'handling of NewPZealaiid dairy produce^ by' the New : Zealand Cooperative ,Dairy,^..Cpwpany.^ the.Ne,^ Zealand Marketing "•Association j-^-Over-i ■seas; Federated Farmers,—and 'other.. (^a'gralceV^fo'iv»aistnbutirig.V:! ".^s.v.fcr < iV.the i , . '■' first-named, the delegates feel"that had ',' it not, been for their stabilising influences the fluctuations [of prices] would ■■ havpr-been- greater." ;■...' ■ . ' ■-:! THE BEST." ",'. 3JefeSe»'cas.;ai-e'-made to condition of ';; prqdTic^TOi* arrival- with the ■lemayk-:-^ • ■ '.tTnere-Js. "plenty of -room on the British. ,-' maiil&o3r:'..the Jb'estj'/bnjt little room for '.; in^rj.pj^.\; : ''{:iu;iliti'es.■■■;•' If produce 'is :; shif)p(jir»i[i'.goodficph'dition it will open V. upt,;so"2'^'nCr>*ticisms."ai:'e'"miide by the J; deJp'ga'.tKs^pqn itri^ijifoblo packages used v in ■•export'; of ;da.U7 : . produce;' use of pre"-' se£vativc's";~'date'branding; whey butter; I: teW^e^ltfe'^tLwiisKVphcesfc should bo I 4 'cart!!gclß<tos3>o&Seig>lts.iui cheese shipped.: '; anafoWe'rtepfeKfsußjects. The dele'? •'■;' ■galps:'...'-hold""tlio', standardisation of all' ;. mijli.':fgr;;chees.e-making is.worthy of full *; andi-carefiUJ'cbnsideraTion.'" v' j;:s:i":,-:tS^HAifrJLiNG. ' •
...' .A-'X.p439.'i M?^ '& balf;> °f the report is ;. devoted^tot reception'~6f the.'"dairy pro- ■:■ - ducepiiv-'Loridoi) ■ arid*.'other ports,, and 't the'iSj'steiHi'ot taking •.'butter and cheese % t'rP,pt;^lUps':.'holss; to warehouses are 'de-- "' 8(#-fced7-"'C6ntraryV"to-..^vh'at^fth'ey had 1 besft» <infor)^fed,..,the. .delegates discovered ;,' that" *iinirisulated.barge3 were in use for * conveyance of produce from ships to . i waterside warehouses. There was ample '"rprovisioti' for suitable cold storage available in .firitain, ,is the delegates found is ' when'"iiT'Tj'ondoh, Bristol,"*' Manchester, :; Liverpool, and Glasgow, and very satis- ■■■ factory*.•■terms ■ for'■ .storage' could bo arranged,'"arid" "if handled, by the ' board :f it should be secured at an economic rate. ■; We cannot see that the position would be improved by tlio erection of a new store ''. upon..any .site that would be available "\ to . tho board." " . ,!: TRADE WITH THE PROVINCES. ': '• Trade with other ports as well as Lon : .'■; don is recommended. on the following ;" grounds ':—'''. > '". . 21 "In addition to" the- improved dock and ;; cold storage facilities offered at the -. provincial ports, the merchants of these ': centres ate' very keen to get regular J; supplies...direct to. their ports. At -pr.es- ;■. cnt all supplies sent by rail -from Lon- • don to Bristol pay railway freightage of -/'" Is 6d per" cv.;t. Manchester ajid Liver- -| pool' 2a'6d, and Glasgow. 3s. This haß ;"" -to, bo,added to the price, and forms a 'permanent disability in any endeavour to foster' trade.". . •'.■ Apart' from a desire to increase their business, we dis-
cern an increasing desire to develop business with the Colonies. Such moveIments .develop ..slowly.., in Britain, but' theie-.ja; no:doub.t of the trend in that; direction. some of these provincial centres importers .' :have estaii' lished, branches of their business. Soriie have agents working on their behalf.. In. some of these 'cases the agent :1$ paid a half per cent, commission on ttje business;; done/ |< We think that a sati?-i faotory.developrnent or trade cannot be expected when, remuneration is arranged on such basis. The selection of Va f.ew sound, keen houses in each'of the^e ■centres, in additiijn.to the London houses with offices already- established, would add,zestto the propaganda required for developing; otjt, trade :;in these centres. Me, X r£l?onvinced--the- time is ripe' f&r .auch-a-step. --It,can only-'be successfully, accomplished, under -the-*.controlliiie hand.'i>f:th'e board.,,' , ■" .'. '■'.'We recommend that initially a regular monthly delivery service be established each of these provincial, ports; that a quantity estimated to supply the .requirements of each district: for a,. m-°" tl} b,r shipped; that supplies be placed in cold storage and distributed' through merchants under the direction of the board. All these possibilities have been discussed with the leading merchants, and we are sure they will readdy assist in the establishment of such a echeme. The uncertainty - regarding supplies and steamers makes it impossible at present for either factory or merchant to develop this business, w r hile_ a regular service,=6f steamers crin'' only be expected if we organise to fill'
THE DANES. A very full Account is given of the Da^sh^stem of disposing g o f dairy $ duce. The delegates report: ."We met leaders of tl« dairy industry, co-opefa-twe, finance, heads of experimental s tai W h Pr°fesi"St °f dairying, and .export merchants. They are keenly a ]iVe to probable, marketing difficulties. The ' mam desire of their industry is the mainrf/l? CM P-f, rea,son^ 1y stable prices at a profitable level. 1,, this they recognise that our interests are similar. But they also recognise'that in the last analysis the fittest must survive.-..No.attempt to conceal our national rivalry would have been of any,use,..eve n if we.could have: thought of such a course.: They understand 4 the; rivalry, but also recognise the advantage of frank consultations between representatives of the two interests We review our. conversations with them with satisfaction.. We met men of high integrity and capacity, and we feel sure that .recurring conversations/ between- them and representatives of the board will be of advantage to both." . '" ■ Holland, Latvia, Finland, Ireland Siberia^ and Argentine, as, rival' sources of supply, are fully considered and dealt with in the report. With respect to TAustraJia, a conference was called at Melbourne to meet the delegates at which representatives were present from alLbtates except Western Australia They were all deeply interested in prospective marketing problems, having recently induced the Commonwealth Government to pass a Dairy Export Control Act si.nU jar to that of New Zealand. The'oijlv important variation from the lines laid down in tbe. New Zealand Act are: (1) that each State elects its own members: \i) factory directorates are to be the voting umtun the. election of the members' of. the,.board instead ',of individual dairy farmers; -and (3);-thy Government Hiis •made provision, to finance these undertakings tothe extent of:£500,000. ."At the conference our" opinions and experiences', were eagerly sought, and the hope gxpressed that the joint movement Avould be advantageous- to,both countries." '*■.' :::.•■'^«<NoT GBICKET." • '.i :.;
. r .^ift i^Safd t 0 marinie insurance, the delegates report: "Our'first investigations convinced us of the advantage "to the;industry of consolidating our insurance and having it covered by a compre^Kei^iye 'policy;-arrangecl by the board. ;. -JJ.Jr.«.6p,' I .the: inforniation' of the board's J n°?h ecl? lP,n wa? cabled .to London a .mild-storm-ardse among the. underwriters :a|.:LlQy.d..sL.'They interviewed .the High Commissioner^ and;clesired- him''to cable to, JSfew Zealand . their- objections' .to the creation of a, .monopoly, "etc.' -Ah' interview was sought with ourselves' by the chairman.and secretary df Lloyd's We wn'it.tH|m.. 'UntU.then they did not kndw that; several of: the London houses rei'? rS?S. tc3j;at'3Jldy : d's..had tech' asked to' J. u°'ei§¥# h§ wfiole -business, and hafitendered a; price which Kad been beaten by;,the New Zealand companies. We im-' ;pi vess'ed<:-jpcin.-them ■that it 'was scarcely ; .cricket',.,to be talking about 'creating monopolies,, when some of their members had been urging.. ,ts: advantages and had been endeavouring to secure it. We inJi^rf^hfPjthat the arrangement'in- any; case -jvas only for one year, and the position.would .be,open for them to improve uporiit at the end'of the term. Just at the moment they were not prepared to offer improvements, as they thought we ,had got very good terms.,; To be on the spot during these negotiations was of distinct advantage, as we gotia clear, idea of now the .whole machine Works' Up to. Lthe^tiOiCqt' iii(r:',depart.iire from London .I'j™?.^yi4sf't that\lisappoiritments were ■ ,'..,„ -T{io~ ; ppini6n 'was"expressed lliat; iheTfew; Zealand "companies co.ukl not carry the load: Time will'prove if this is. correct, ■' while any .disability taching' toithe new.arrangpinent cnn'?be corrected at the'expiry of' the present contract." ' .',
-Shipping, matters ai-o hyefiy*' dealt' , WtE,TJbuV'ili!e''pos.sibilily.:. p£i establish-* sment't^fJa.^specialisea.'seWibe ,for the dairy industry, of'fully' refrigerated steamers and other matters are contained- in a confidential report furnished by. the delegates:: to. the. board. ■ -■-'•■•'>■• ■■-• ■• .CONCLUSIONS. ..''?' . Finally,, reviewing tlie whole position, the delegates wish.to reiterate their 6piui ion;,that.,".a.period...q! fie.rce competition is immediately "'ahead" of its." We liave no doubt that, this can be successfully met, but the fullest production of highgrade quality must be aimed at in every department. \ Wasteful methods or anything contributing ■• to lo\y quality production must be cut out. To assist- in this work a well-equipped laboratory is jessentia). . .. . . ■
;"'.' ;WSi': think; 'that.: the board.'. shcfpld undertake- the responsibility of all sales and establish a London office. A London, ■.cpirinie.r.eial,,manager should be appointed, and two very cnrfully selected men should be sent from New Zealand^ -one associated with butter and one wi(.h cheese, whose special dutiej would be to ..KS?P.-i.n. twpli wilh their respective' branches of "iho imlustiy, tlie condition ,bf produce on arrival, the maintenance •of grades, etc. ' .'l-:'S-':'''v:; ';■
Every sound firm or organisation wishing to.serve .as distributors, of New Zcalarid:;pCoduce : :sh'iiild be given an'apportiiriilyjotprovin^ their snips capacity. Proved ■Bales.: : capnf-ity..would ■then determine lha;measure-of-''continued, opportunity for them:--'This-'method 'would provide much more real competition than anything, that exists at present. . "London being the nerve centre-of our marketing operations, the London office should be given the responsibility of collecting all'data relating to marketing problems, Mvhich would include production and disposition in all other dairy countries; , ■ -. . , ,•. , ...... ,
\ i ..." VYere'comniend that a"national brand 00 selected, and that it be placed upon pneyend-of, each butter box and cheese erato containing a first .'grade -product. The'factory's"'brand ''should be pfaced on the other end. No cheese or butter should be exported in cases bearing the'national brand below first grade quality.
All produce graded 92 points and' over should have an additional superfine brand at _ the ' national " end of the case. -. ..It should be the aim of the board to have both cheese and butter available at all times of the year. The probabls demand at the different seasons cannot be prejudged at this distance .We consider -^his course will certainly increase consumption and improve our position on the market. Actual quantities will need to be assessed by the London management according to changing circumstances. With the competition we foresee it will be quite futile to expect that any stereotype method will meet the necessities of the position. " Risks are involved in any decision but greater risks lie for the industry in a continuance of the present system."The delegates record- appreciation of the assistance given by the High Commissioner and his staff, and Mr Drew of the. Publicity Department. '
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Bibliographic details
Evening Post, Volume CIX, Issue 33, 9 February 1925, Page 8
Word Count
2,264DAIRY BUSINESS Evening Post, Volume CIX, Issue 33, 9 February 1925, Page 8
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