WHOLESALE & RETAIL

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

WHOLESALE & RETAIL

EFFECT OF CONTROL

Formerly the price of butter on the local market was based on its free-on-board export value, in' other words, if butter was worth 112s per cwt to ship overseas it was worth that much on the local market; if it was worth 120s or 130s for export, then that was the basic price for the local trade, with, of course, the addition of costs of patting and distribution from wholesaler to the grocer's counter. Sometimes there was a small margin against the local consumer, sometimes he had the advantage. Sometimes the producer, according to the swing of the overseas market, was not satisfied with his return from the local market, sometimes he regarded that market as invaluable. Competition in it became keen and the consumer then might come into what he thought was his own. CONTROL—AND QUALITY. But all this has been changed by control. The local market is controlled, the price to distributors is fixed, the price over the counter is fixed. It does not, however, follow that the

quality is fixed. As a matter of fact, complaints have been made by distributors that during the period of uncertainty which prevailed up to the raising of the price as gazetted today, butter held in store against the expected rise in price had deteriorated in appearance'and flavour. What is called the "domestic price" j principle has operated, in the Australian local butter market under various aliases for some time past. It means that producers who export their produce can and do charge more for that produce in their local markets than they can obtain by exporting it. For instance, Australian butter was quoted in London last week wholesale at 100s per cwt; in Melbourne' at the same time the fixed price was 158s 8d per cwt. The butter selling in London at 100s had of course to bear freight to London, insurance, and other charges. But 100s in London meant (such is the magical working of the exchange rate) 125s in Melbourne. Even then Australian butter for Australian consumption was 33s per cwt dearer. SELLING AT Is 2d IN LONDON. New Zealand butter, has been selling retail in London for some weeks past at Is 2d per pound, and even at Is per lb in order to increase its consumption. The wholesale price during October was from lKr to 116s. During j November this price has been reduced to. 106s per cwt and the latest price is 104s to 105s, with Australian down to 102s. v