TOBACCO TRADE

Evening Post, Volume CXVI, Issue 143, 14 December 1933, Page 17

TOBACCO TRADE

MONOPOLY PEICES

COMMITTEE'S REPORT

The Industries and Commerce Committee of the House of Eepresentativos yesterday afternoon reported on the petition of H. H. Mead and others praying that action bo taken under .the Board of Trade Act, 1919, to establish fair trading conditions in the retail tobacco trade, to develop the tobacco industry, and to protect consumers against monopoly prices. The Committee; reported that -while tinable to recommend the prayer of tho petitioners for favourable consideration, it recommended tho Government to give favourable consideration for the removal of tobacco (including cigarettes and cigars) from the schedule of tho Commercial Trusts Act, 1910, provided the manufacturers, wholesalers, and retailers entered into agreement safeguarding consumers. The Leader of the Opposition (Mr. M. J. Savage) said he regretted that the Committee had not seen fit to go a little further. He was a member of,the Committee, but disagreed with tho report. Previously, thero had been a petition asking for tobacco to be removed from tho schedule of the Commercial Trusts Act, but tho same Committee which had presented tho report now had not seen fit to support the prayer of the previous petition. The Committee had now recommended that tobacco and cigarettes be removed from the schedule of the Commercial Trusts Act, without having been asked to do it. "I am still waiting for a reason for the change of attitude on the part of the Committee of which I am a member," he said. : Tho Prime Minister (the Et. Hon. G. W. Forbes): Were you present? OIL AND TOBACCO. "I was,'' replied Mr. Savage. The matter was-developing, he said, and it was no use members putting their heads in the sand like ostriches. "When W3 deal with oil we make a recommendation, but we are not prepared to make a recommendation when we deal with tobacco," he added. "Why? It is a question that calls for an answor." Ho knew it would be said that the tobaco trade would be difficult to regulate, but ho pointed out that the great majority of those engaged in it were asking for the regulation of prices and conditions. They had agreed among themselves that the removal of tobacco from the scehdule would simply mean the creation of a monopoly in the hands of the manufacturers, which was the yery thing the Commercial Trusts Act was passed to prevent. The retailers in the tobacco trade were being asked to hand themselves over body and souV to the manufacturers who were not asking that that should be done. The manufacturers were with the retailers in asking for control under the Board of Trade Act. '■■ Tho Prime Minister: They are asking for it to be removed from the schedule. Mr. Savage: They asked last year, " The1 Committee's recommendation, said Mr. Savage, meant that the schedule of the Act was to be amended and tobacco removed from it so that the manufacturers would be able to fix prieesV;,That meant that the manufacturers would fix prices conditionally.on certain prices being charged by tho retailers. The'"manufacturers had not asked f6r,' such a course to be taken, bat the Committee had seen fit to force it upon them; that was if the Government fell into ,line, with the Commit-teeV-report. -Last, sessicnW/U- way ; out of :tfitP-diffiquity,:(haa beenf found; .by asking that 'the/Minister of; Industries and Commerce should get the parties together with a view to an agreement being arrived at. For some reason or other that had not been done. The Hon. A. D. McLeod (Government, Wairarapa), Chairman ofjjhe Committee: There has been an attempt °Mr Savage said that if any attempt had been made it must have been a weak one, because many of those encaged in the trade had told him that they had not heard of any attempt. They wanted the Government to put into operation the law already on :the Statute Book. Why was it applied to one indutsry and not to the other? The Prime Minister: Because there is competition in the tobacco trade. Mr Savage asked what was the difference between the tobacco and the oil trades. . The Prime Minister remarked that there was no competition in the oil '.Mr! Savage: No competition in _the oil trade! The Prime Minister had better take a day or two ofi and have a look at it. There was competition, Mr, Savage said; .between a practical monopoly and those trying to serve the public, EVOLUTION IN TRADE. Mr. A. Harris (Government, Waiteinata) *Said that there was an evolution in trading, and as long as monopolist trading was not abused it was probably the best thing for the public. Unless something was done, tho small Tetailers would very likely have to go out of business. It had been felt by the Committee that arrangements might be made between the manufacturers, retailers, wholesalers, and big stores to fix prices that would not unduly penalise the public and which would allow the small retailers to exist. _ _ Mr. McLeod said that the majority of the Committee which, rejected last session's petition asking that tobacco be excluded from the Commercial Trusts Act objected to price-fixing. Officers of the Department had- made it clear this year that while the Commercial Trusts Act was in operation it would be impossible to fix a higher price than the lowest charged by any retailers. The recommendation would form a basis enabling negotiations to be entered into a3 regards prices.