HOLDING BACK

Evening Post, Volume CIX, Issue 124, 29 May 1925, Page 8

HOLDING BACK

FOR HIGHER PRICES

THE BUTTER POSITION

STATEMENT BST CHAIRMAN OF

CONTROL - BOARD.

Mr. ■William Grounds, chairman of tho Dairy Produce Control Board, was asked by "The Post" to-day if he could throw any light on the present position: in the London butter market in so far as it affects New Zealand produce. Press and other cable dispatches have been received during the past few days to the effect that withholding supplies of New Zealand butter from sale is having the effect of arousing resentment on the" part of merchants, and that . the London Press, was taking the matter up jn the interests of consumers." The New Zealand, Producers' Co-operative Marketing Association, a producers' organisation, was advised by its London office that the position created was "unfortunate and affecting trade." Mr. Grounds's comments on the position were that it. was easy to understand the complaints coming forward oE butter being held up because merchants have evidently not been able to secure the heavy quantities of produce that they had hoped to purchase.

SPECULATION CHECKED,

"At this period of the year," he went on, "when prices have usually been reduced to a_ low level—in, fact, below cost of production—they always looked to'buy to advantage. When in London the delegates from the board were informed by one of the importing houses that it had invested £250,000 In New Zealand butter. These are the kind of specula- i tions that ,the industry has been endeavouring to- avoid by the institution, of, control over the produce; they account for the origin of the control movement. • Implications are made in the Press messages that the holding back of butter is a result of action taken by the Control Board. That view is quite erroneous. Tho board is exercising no form of control, neither is any control of the marketing of produce contemplated before August,. 1926. The reservations of stocks have been made at tho instigation of individual factories. It is an entirely independent I movement, so far as the board is concerned. But it does clearly indicate that there is a desire for such a control which will prevent extreme fluctuations of prices, which have characterised the marketing of dairy produce for. the past few years. . . I HEAVY LOSSES "During the past |ew seasons co-op-erative dairy factory companies have lost heavily by the immediate sale' of their produce on its arrival in London, in com-, parison with those companies who held their supplies off the market during the slump periods. They have been led by these bitter experiences to" completely hold back their supplies from the market, and to await, a^ rise in the price usually occurring in the late British summer and autumn months.

"We have 110 accurate knowledge as to the extent of those reservations for the factory companies are under no obligation to disclose to anyone any decisions they may come to in the conduct of their own business. Of course we know the quantities held in New Zealand, and I believe they are approximately 100,000 boxes. ""

"The board fully recognises the possible danger to individual factories, and j in fact to the dairying industry in gen- I eral, of this unorganised and individualistic descSntion of control. The reser-J yations have been made at the level, of prices determined by individual dairy ! companies. It is generally recognised j that .the most important factor in mar- ] keting, next to the quality, of the pro- ' duce is continuity of 1 its supply, "This cannot be provided for with ] this individual factory effort to. control, i When the board's policy is definitely in- j stituted, arrangements will he made to j secure the necessary continuity'of supply. THE CONSUMER'S POSITION

"The oft-asKed question: Where does the, consumer (Some in? was asked of the chairman, as reference had been made in the cablegrams to the effect on the minds of the British public of butter being held back for higher prices. Mr. Grounds, in reply said: 'The attempts, to insinuate'that the action of the Control Board is in opposition to the inter-' ests of the consumer in Great Britain is quite contrary to fact. We believe that the consumer is prejudicially affected to possibly as large an extent as the producer m the recurring extreme fluctuations in prices, and that any method that will satisfactorily stabilise prices' levels will be in the interests of consumers as well as producers.' " ■