TOO MANY MARTS

Evening Post, Volume CXXIII, Issue 100, 29 April 1937, Page 14

TOO MANY MARTS

UIiIFOUNDED COMPLAINTS =; | i '■ '. ■ '■.■■.• !i

:It is-^yery evident to the Commit--!tee that, the general working of fti^ ijruiti and produce. auctioneering busi^-ness:-in-New Zealand is,-by no means .wha|--it-should be and,great improve} menls: are necessary ifVthe firms ;'e:n----'jjaged-: therein are efficiently and •economically; to perform .the services 'due to the growers, retailers, and th'je public. It. is only fair, however, to points out that the auctioneer is alwiays in a most difficult-position; being am -intermediary-..he-is subject to criticism 'jmd abuse, -neither of which is lacking, from bothfvender and purchaser. •I; His legal position is that, until the fall of the Hammer, he is agent for the vender and .hisy;duty is to obtain by. all1-legitimate; rpeans the highest possible price .for his .principal. Mastiy retailers; fail.>to.Vrecpgnise ;• that: fact. Ma'tijpgrowers? on':,-the-; .6ther- hand, ;uiifaiiriyi'iblame '.the 'auctioneer if;. pbiqes ,do}n'6t realise their'anticipations, The 'Comtnittee is of the opinion "• that ■■■auc'tioneersin the .large, majority-- of ca^es do^try to- achieve the' best possible -r£sults for the. consignors—it- is in th eir pwii interest . to. do so—but the fruit and i-produce :sent to the' marts" is so often ;'■ badly, ■packed.".-.'and of such inferior quality "that;-not only .does ;it realise a low 'price itself but its presence in themarts has the direct effect of lowering the; prices for good quality fruit' with w.hlch it.is sold in competition. ■■"i:i''.'.: '.':'-■:■ ■■■■' "■ ; ;: lEREGUtARITY OF SUPPLY.) ' Further, there is a great irregularity in supply; sometimes the markets are very short and - sometimes glutted. Under conditions such: as these it is impossible ,to achieve . anything in the 7,vay of price stability-and the grower is faced with continual disappointing returns. The ' Committee ■ has been struck with the suspicion.in the minds of many growers .that the auctioneers are not treating '■ them., fairly, ">et definite evidence,, when; pressed -for, was either not forthcoming- or;was'; so . ■'. ■' . ''■■;/:.'' .-.■■'■•1 •■-.'■ ' ■■'>■'; ■i' ... r

remote in time, that it was impossible to find any serious foundations for such suspicion. Most of the retailers' complaints were indefinite, and not capable of proof and in the majority of the instances that could be investigated reasonable explanations were usually forthcoming. GROUNDS FOB DISSATISFACTION. The Committee is of the opinion that, notwithstanding the above re-marks,-there are serious grounds for dissatisfaction with the fruit auctionering business as at present conducted, in the' Dominion., ,In many centres there are too many auctioneers operating, with the result that individual turnovers are small and the buyers are scattered over many marts instead of being concentrated. The first-mentioned feature results in too high overhead and operating costs, making a reduction in the rates of commission difficult, if not impossible, and the second feature results in a diminution of the competitive buying element and consequential poor prices. In Dunedin, with a population of 89,100, there are six auctioneers whose average annual turnover is £44,138, whilst in Auckland, with a population of 223,200, there are only four auctioneers whose average annual turnover last year, was £167,749. The consequence was. that whilst the Dunedin auctioneers could not operate at a commission rate of less than 10-per cent., the Auckland firms were, until three or four months ago, able to carry on at a rate of 7i per cent. SAVINGS IN COSTS. The Committee is of the opinion that two auctioneering firms would easily be able to handle all the Dunedin business. If properly organised, and that three each would be sufficient for Christchurch and Wellington, and four for Auckland. If the number of auctioneers were reduced ■in accordance with the above views the savings in overhead costs could be very considerable, the buyers would, be , concentrated instead of being scattered, and. there; would, also :be , -increased efficiency.1 Further, in some, of the cities the marts are situated too distant from', each other, and ,• in ': consequents,

the number of buyers attending in any one mart is often small and competition is consequently lacking. This is particularly the case in Dimedin, and also, in a lesser degree, in Christchurch and Wellington. In Auckland the position is much better. The Auckland marts are the best in New Zealand, the buildings-being specially designed and equipped and provided with good facilities for unloading and dispatch. CONGESTION IN WELLINGTON. Conditions in the Christchurch and Wellington marts are most congested. The quantities' of fruit and produce offered for sale are so large and the attendance, of the public so great that there is insufficient space for the proper arrangement and display of the former and too great a crowding of the latter. The Committee has seen numbers of buyers actually walking over produce, sacks of cabbages, and bags of onions exposed for sale, in their endeavour to catch the eye of the auctioneer. There are, generally :speaking, no adequate cool-storage facilities provided by the auctioneers, with the result that quantities of good, unsold vegetables are not fit for sale on the following day owing to wilted appearance. These conditions all tend to reduce prices and to increase distributing and overhead costs, with the result that both grower and consumers suffer. and no one profits. The Committee is strongly of the opinion that central marts should be established in Dunedin, Christchurch, and Wellington by the municipalities concerned, and that all fruit and produce auctioneers, should be accommodated therein at reasonable rentals and otherwise upon fair terms and conditions. The principle that the large municipalities should concern themselves with the • well-being of their citizens in the matter of controlling, in a greater or lesser measure according to the necessities of the case, the distribution of foodstuffs consumed in their respective areas is now generally accepted. Forms of complete control of what may be called the wholesale distribution of meat exist per medium of the various municipal abattoirs, and some city councils control the retail dis--tribution of milk. There is no logical reason why local bodies should not provide facilities for the economical and more hygienic distribution of fruit and vegetables. ANNUAL VALUE. The whole of the fruit and vegetables consumed in the large cities passes through and is distributed from the auctioneers' marts, and the value of such produce is very great; in Wellington, for instance, the value approaches £750.000 per annum, and in Auckland nearly £1,000,000. It is true that municipal control as regards meat and milk was probably chiefly founded upon hygienic grounds, and only to a lesser degree upon consideration of prices, but if provision of central markets by the municipalities tended to reduce the costs of distribution of fruit, and thereby its greater consumption, there is no doubt but that the health of the community would benefit accordingly. Should municipal central markets be established with proper facilities for unloading and dispatch and equipped with internal conveyors and lifts, coolstorage and . ripening accommodation, and adequate space for staging, inspection, and- movement on the part of staff and' public, •■> the Committee considers : that. considerable economies in overhead could be; made and ,'JEor that reason', and also as" a result of the concentratiori?bf buyers in the one market,

it should then be possible to reduce rates of commission on sales to the retail trade. City Councils already have power, under the provisions of section 315 of the Municipal Corporations Act, 1920, to build and equip markets, but these powers require considerable amplification in order that full effect may be given to this Committee's recommendations in connection with central fruit marts. In particular, provision should be made for granting long-term leases of portion of the markets to those firms engaged in the fruit auctioneering business. It is recognised that reasonable time should be given for the auctioneering firms at present owning or leasing premises to make arrangements for the disposal or relinquishment of such premises but the establishment of central, marts should be a definite objective of the large city municipalities and be taken in hand in the relatively near future. AUCTIONEERS' BOOKS. In checking through the books and records of the various auctioneers extreme difficulty was experienced in a number of instances in tracing the various transactions through from the consignor to the buyer. In a number of cases the auctioneers had actually destroyed their auction sheets and other books of record, and it was therefore found impossible to make any check whatever., in these cases. In these circumstances it is obvious that should a grower take, action against an auctioneer under the Secret Commissions Act, 1910, in respect of fruit bought-in and resold by the auctioneer in his own behalf at a profit without, the consent of the consignor the records of any auctioneer who had destroyed them would not be available as evidence and the proceedings would probably fall through. . The Committee therefore strongly urges that legislation be introduced whereby it be ; . made an offence for. any auctioneer to.1 destroy records within two years afterthe date'of'sale. It is also recom-. mended that a uniform, system of ac-; counting.be introduced. : The Committee was surprised to findthat the :fruit auctioneers do not, as, a rule, keep proceeds of consignment' sales in trust accounts/at their banks.; This' practice, , in'-.the Committee's', opinion, is quite wrong in principle.'1 as it is obvious that all trust moneys should be kept apart from the firms'; own moneys both in the bank as well as in the books, otherwise an unfortunate situation might arise in the event of insolvency or liquidation. There is no reason to think that the great majority of the brokers are not in perfectly good financial standing but there have been instances, in the smaller towns, of losses to growers through the mixing of trust s.nd private funds and the Committee considers that all fruit auctioneers should bs compelled to keep all trust moneys in separate trust bank accounts. GOVERNMENT INSPECTORS. A point was made by a number of witnesses, in connection with fruit and vegetable inspection, of the difficulty any buyer or other person concerned frequently has in distinguishing or locating inspectors, particularly in a crowded auction mart. Occasions frequently arise when an immediate contact with an inspector is desirable, but the importance of the- occasion may be lost if such contact is materially delayed. It was suggested that this position could be met with advantage to the inspector and the trade alike if the former wore some kind of distinguishing badge. The Committee fully appreciates the value of this suggestion not1-only for the purpose of the more ready location of an inspector in a crowded auction mart, but also as a means of affording some assurance of the bona fides of an officer entrusted with the right to enter premises and to condemn and destroy goods. In the circumstances,

the Committee recommends that official peaked caps be provided bearing the words "Fruit Inspector" to be worn by all'such inspectors while on duty.' Red Manfred has got through a