GROCERY PRICES

Evening Post, Volume CXXX, Issue 9, 10 July 1940, Page 9

GROCERY PRICES

EFFECT OF SALES TAX

STATEMENT BY GROCERS

COST OF LIVING

The belief that 'it was ridiculous to "suggest that the cost of living would not be affected by the increase in the sales tax is expressed in a statement issued for publication by the Welling,.ton Master Grocers' Association in accordance with a decision made at a meeting of city, suburban, and Hutt 'Valley grocers last night. The statement was made by a spokesman for the association who said the average housewife had gained the impression that the extra 5 per cent, tax would not be passed on as far as groceries were concerned. The Minister of Finance (the Hon. W. Nash) when presenting the Budget ■announced that the commission allowed merchants for collecting the tax would Joe reduced from 5 to 2£ per cent, but -when all was said and done it was the . grocer . who was left "to carry the baby." * >

■ "For example, a merchant charges up ;five cases of tinned fruit worth £6 to '/a retailer," the spokesman said. "On , this he collects 12s sales tax and for 'doing so gets 7d from the Government. This should cover the extra clerical work entailed. If is then left to the retailer to try to collect the 12s and >■ in doing so he will more than likely -make 120 sales and get nothing for the trouble.

"■■•■ "In many cases the whole of the tax is borne by the retailer, and steadily increasing costs make matters worse. For instance, before the war safety cost from 5s to 7s a gross, -plus 4d sales tax. The only safety n.atches available at the moment cost *9s BJd, plus Is sales tax. Yet the revtail price on broken quantities remains Id a box.

- "Though, staple line* such as butter, •bacon, eggs, cheese, bread, and sugar >. will not be affected by the sales tax, .it is ridiculous to suggest that the cost /of" living will not increase. We are rail dependent on many lines from overseas, such as sultanas, currants, raisins, tinned salmon, herrings, sar- - dines, salt, cream of tartar, carbonate • of soda, etc., over which the New Ze»Mand Goverpment has no control by price fixation in other countries. j: HIGHER WHOLESALE COSTS. T, "A striking example of increased ..qosts is salmon. The most popular s line, Fancy Pink, Jib tins, used to cost about 5s 3d a dozen, plus 3d sales tax, "and retailed at 7d to Bd. Todaj this lline costs 10s 6d, plus Is Id sales tax, 'and is retailed at Is 2d a tin. As the sales tax is on a percentage basis, the higher the cost of the goods the greater the sales tax, as instanced in the cost of the salmon, namely, from 3d to Is Id on a dozen tins. *

"Prices of taxable goods will advance, approximately £d on lines priced up to lOd, and Id over that to Is Bd. Quick-selling lines liable to be increased in price include soaps, polishes, tobaccos, sauces, pickles, tinned fruits and fish, tongues, and biscuits.

"On account of the collapse of the tea market in Ceylon, the retail price of tea would have been reduced, but the increase in tax will keep the price as before.

'""The association has been notified that in some cases the manufacturers will bear the extra 5 per cent, themselves, but it applies mainly to patent medicines and slow-selling lines. ' "Altogether, then, to those prepared to live on the bare necessities of life the increase in the cost of living will be very small. To the average family, however, there must be a fair rise.

"As far as the grocery trade is concerned, the extra Is in the £1 tax on wages must reflect on turnovers to a certain extent. This, coupled with in- j creased taxation, will mean anxious times ahead. However, it is not the desire, of the Wellington Master Grocers' Association to shirk its responsibilities, and the Government can always reckon on its whole-hearted co-operation during these troublous times. The sole purpose of this statement is simply to show how the recent increase in taxation will affecf : the housewife." PRICE OF SUGAR. The spokesman also deals with the! statement that the Government has decided to carry any increase in the price of sugar, and not pass it on to the public. Following an advance in the wholesale price of sugar some time ago of £3 16s a ton the trade learnt with amazement that an increase in the cash over the counter pr.ice for broken quantities would not be permitted, he said. This meant a loss to the average suburban grocer of £1 6s 4d a week. The trade now learnt that the Government had decided to carry any increase- in the cost from the Colonial Sugar Company.

It was stated at the meeting that the increase was thought to be £4 13s 4d a ton. As the yearly consumption of sugar in New Zealand was 77,000 tons, this means a total of £359,333 per annum, or roughly £90,000 to be paid 6ut by the Government for the next three months'' supply of sugar contracted for.

It was felt at the meeting that the I sugar question had not been dealt with | at all satisfactorily and further representations will be made to the Government. DEARER WRAPPING PAPER. The high cost of wrapping paper was also dealt with, and the need for housewives to bring baskets with them when shopping in order to save paper was ■ stressed. A further, increase in the -price of wrapping paper had been notified and it would mean that in future retail grocers would pay apprpximately 62s a cwt for paper, compared with 34s a cwt for the quality of paper used in pre-war days. Cap paper for wrapping bread had simiJLarly advanced in price, and it would now be impossible to wrap bread and show a profit. The association appealed ,t<? the public to take bags and baskets when shopping and said that would result in a saving in serving time, which was important in these days of- staff shortages as a result of the 'war. '