MILK FOR THE CITY

Evening Post, Volume CXV, Issue 130, 5 June 1933, Page 10

MILK FOR THE CITY

PftfSE PAH) AND CHARGED

NO UNDUE MARGIN

In an open letter to the Wairarapa: branch, of the Farmers' Union, Councillor W. H. Bennett, chairman of the Milk Department of the City Council, has replied to points which were made during A discussion at the interproviiicial conference of the Farmers' Union at Masterton last week on a remit re--garding the alleged disparity between prices paid to milk producers and prices charged to consumers. Councillor Bennett contends that the Wellington City Milk Department stands in a very favourable light when compared with similar services elsewhere. , "While our payments to producers vary very much as'between the eight months of what is called the 'summer period' and the four months termed the 'winter period,' the prices to the consumer are equalised as far as possible over the whole year/ Councillor Bennett wrote. "At the present time, which is part of the winter period, the margin between the- landed cost of milk purchased by our department and the gelling price of bottled milk is 7£d per gallon. Against this can be quoted certain cities of other countries as follows:—London, Birmingham, and Glasgow, lOd per gallon; New York and Chicago, 13.'50 c per 'gallon; Los Angeles, 18.00 c per gallon. "As the wages cost in New Zealand is approximately 50 per cent, greater than it is at present in Great Britain, and is only a little less,than it';'is in U.S.A., the favourable position of Wellington should be apparent. Over the whole year the difference would not.be the same, but at no period would it react unfavourably to Wellington. "Cream of 43 per cent, is at present costing the department 12s 3d per gallon, or with loss on surplus, 13s 3d. This cream is sold wholesale at 13s 8d and retail at ( 16s per gallon. It is therefore difficult to see where there is room for criticism of the present price margin of theso commodities. It should be pointed out that milk can bo handled on the 'dipped from the can principle' at much lower, margin than'in the case of the bottled milk system. "For. health reasons, milk straight from the can is not suitable or satisfactory for city supplies. This means that consumers are required to pay a little morelfor bottled milk for which they get purity and health insurance." ARBITRATOR'S COMMENT. Councillor Bennett quotes the. following extract from the finding of Mr. J. S. Bartdn, S.M., who was arbitrator in the fixation of the price to be .paid to producers for winter milk:— "An attack was made on the City Milk Department's accounts, claiming that a study of them showed unnecessarily high cost of distribution and .management, unjustifiable increase in certain costs, and the saddling of the undertaking with extravagant ' past building policies. On this point, however, I can find without difficulty that the City Council's accounts, satisfy me that the department is well and economically run; that the administrative and distribution costs are, reasonably low, and their tendency (calculated at per gallon of output)' is. consistently downward^" ' ,