PRICE FIXING

Evening Post, Volume CXIII, Issue 32, 8 February 1932, Page 8

PRICE FIXING

(To the Editor.)

Sir,—l observe from a Press report of an interview between a deputation from the Master Grocers' Federation and the Prime Minister that it was claimed that a manufacturer had an unalienable right m the goods he produced from the time they left his factory until they reached the consumer. He also deprecated the growth of the "price-cutting" evil. I congratulate the ■ depu iationist on his candour.. Such an altruistic spirit is to be highly commended, particularly in these times of unprecedented hardship. Last year when it was decided to reduce salaries and wages, the Prime Minister stated that a reduction in the cost of Jiving would automatically follow. We are told that the retail prices of commodities would be regulated by open competition. This theory does not square with the attitude of the Master Grocers' Federation, and in particular the manufacturers in this Dominion who are doing then? utmost to maintain a hign~cost of living by determining the minimum price at which certain of their products can be retailed to the consumer. The "price-fix-ing of articles is a decidedly more doubtful practice' than that of "price-cutting," whiqh. cannot, of course, be carried to an extreme degree. There is a limit to the extent to which price-cutting can be profitably -carried on, and if a retailer exceeds this limit he automatically ceases to exist. But the number of price-cutting organisations appears t6 be on the increase, and I think it is reasonable to assume that sucK firms are quite capable of competently managing their own businesses. • . • ' • .

The price-fixing manufacturer must have a reason for fixing the minimum price at whioh an article can be retailed. It does not require a lengthy search to discover his reason. He is afraid'that if retailers are permitted to sell his article at a price which will return them a fair and reasonable profit, the consuming public will conclude that that particular article is of inferior quality because of its .comparatively low retail price. He must maintain a high, retail price in order to deceive the public into thinking that they are getting a superior article. If he allows the price to be fixed by competition he is afraid of a drop in his output. The public are easily duped, and think that because they pay 10 per cent, more they are naturally obtaining a superior, article. If the article is as good as his advertisement would have us believe let him put it on the market without any restrictions, and his turnover, and consequently his profits, will increase. The manufacturer of a high-class* product has nothing to fear and everything to gain. I maintain that it is time legislation was introduced prohibiting the fixation'of minimum retail prices of commodities. This is an instance in which. I consider the Government should most decidedly interfere with private business. The manufacturer is compelling the retailer to' make a greater profit on such articles than is considered reasonable. If a retailer sells "price-fixed" goods at lower prices than tKpse fixed by the manufacturer, he is promptly informed that future orders will not be> fulfilled; And yet' we are told that prices are fixed by competitionj The practice should not be permitted to continue in a democratic country like ours.— I am, etc., ' H.McG.