PRICES RAISED TODAY

Evening Post, Volume CXXVI, Issue 132, 1 December 1938, Page 10

PRICES RAISED TODAY

GROCERS' COMMENTS

"GUARANTEE TOO HIGH"

The new retail price of butter in Wellington from and including today will be Is 6d a pound in some shops and Is 6£d in others. These rates were ascertained by inquiries made today.

"Our price will be advanced from Is 4d to Is 6d a pound as from noon today?" said the managing director of one group of Wellington stores carrying on both cash and credit business. "I will not say that that will be the final* price," he added. "It may be increased to Is 6£d if an agreement is come to by Wellington retailers. As a matter of fact the gross profit of lid per pound we will be making henceforwards on an increased wholesale cost is barely sufficient to pay wages without allowing for other items in our overhead. A profit of ljd a pound on a cost of Is 4£d means a margin of only 9 per cent., whereas we should be entitled to at least 12J per cent., which would represent an increase of 2d.

"Another appreciable difference has been made by the fact that butter now comes to us packed in cartons instead of in wooden boxes," he added. "It is impossible to dispose of the cartons, but previously we could obtain 9d each for butter boxes. On a weekly turnover of, say, 100 boxes, that meant an additional weekly profit of £3 15s. All these factors should properly be taken into account when the final retail price is fixed."

HIGHER THAN JfT SHOULD BE. One of the directors of another Wellington grocery company said that Goverment control of the internal butter market had caused the price of butter to be considerably higher than it should be. •

"We must set our new price at Is 6£d a pound," he said, "but if we could continue as we formerly did and buy butter in bulk at the guaranteed price and wrap it ourselves we could retail it at Is 5d a pound, and make a slightly greater profit than we can make from today. In other words, the price of butter is now ljd a pound higher than it should be.

"It is obvious that the guaranteed price is too high, and that the Marketing Department has increased the wholesale price in New Zealand in order to recoup some of the losses that it anticipates making in the guaranteed price account," he continued. "One also wonders why the new wholesale price was not put into force when the new guaranteed price was announced some time ago. That and other questions require an answer."