THE FLOUR COMBINE.

Evening Star, Issue 11677, 8 February 1902, Page 3

THE FLOUR COMBINE.

DUNEDIN FLOUR SELLING IN AUCKLAND AT £6 10s. THE PRICE IN DUNEDIN £8 ss. AUCKLAND MILLING COMPETITION IN DUNEDIN. HOW THE PRICE OF BREAD IS AFFECTED. THE SOUTHERN TRUST UNDERSOLD AT THEIR OWN DOORS. Mr L. W. M’Glashan, who represents the Northern Roller Milling Company, is at present in Dunedin in connection with flourmilling matters. As considerable friction has arisen between Northern and Southern flour-millers, tv representative of this journal called upon Mr M’Glashan yesterday afternoon to ascertain the causes of the disturbance. Our reporter was courteously received, and Mr M’Glashan ireely answered any questions that were submitted. The folloAving interview, Avhich lets an important sidelight into the flour-milling business, took place:— Reporter; I understand, Air M’Glashan, that you have come South in connection with flour-milling? Mr M’Glashan: I represent a very large Auckland flour-milling company, and 1 am here in the interests of my own company and also of Northern flour-millers. Reporter: There is some friction between Nortnern and Southern flour-millers 1 . Mr M’Glashan: Yery considerable friction. Reporter; Have you any objection to state the cause of the trouble? Mr M'Glashan: I have not the slightest objection. lam pleased to have the opportunity of doing so. The Avhole matter arises from the establishment of a combine or trust in the South to control the flour market, and an effort on the part of the combine to coerce Northern millers to join its ranks. The Northern millers refused to be coerced or dictated to in the* conduct of their business, and the Southern combine retaliated by setting up a boycott and by dumping down Dunedin flour in Auckland and selling it’at £6 10s per ton there, Avhile charging £8 5s in Dunedin. Reporter: Tliat represents 35s as the difference betavecu Dunedin flour in Auckland and Dunedin flour in Dunedin. Mr M'Glashan: Tire difference is much greater than that. The freight per ton from Dunedin to Auckland is 10s, then there is Is 6d wharfage, 2s for cartage, 2£ per cent, discount to buyers, and insurance, exchange, and commission charges—all of which,"totalled together, make up £1 3s 3d. That amount deducted from £6 10s leaves £5 6s 9d as the net return to the seller of Dunedin flour in. the Auckland market. The difference between the price realised in Dunedin and Auckland is therefore £2 18s 3d per ton. The allowance of 2A per cent, to the Auckland buyer is, hoAvever, allowed to the Dunedin buyer also, and that percentage has to be deducted from the £8 5s charged to the Dunedin man. Reporter: Are the facts you mention generally known to Dunedin bakers! Mr M'Glashan: I have noc been long enough here to know that. But during the short lime I have been here I have learned that some of the master bakers are by no means satisfied with the Flour-millers’ Trust.

Reporter; In what way arc the bakers dissatisfied ? Mr M’Glashan: When the Trust was formed,! understand that the millers agreed that all advances in the price of flour would be so arranged as to enable the bakers to advance the price of bread accordingly. The millers’ combine at first ma<le a rise of 10s per ton in flour, to which the Bakers’ Association responded by raising the 41b loaf a halfpenny. Reporter: What extra profit does per 41b loaf give to the baker? Mr M'Glashan : Speaking roughly, about 55s extra upon each ton of flour used. Reporter: Then the millers only got 10s, wldlo the bakers received 555,

Mr M’Glashan ; Yes, that is the position. The millers’ combination didn’t like it, and in order to equalise matters, and without consulting the bakers, put up the price another five skillings, and the bakers became annoyed.

.Reporter; The price of wheat would be a fiicior, would it not?

Mr M'Glashau : Not if all the millers in the colony joined the Trust. The effect of such a combine would place the wheat market as between the miller and the grower at the mercy of the Trust. That w’ould seriously affect the fanners, and if the farmers are affected the whole of (he public and the colony suffer. Reporter: How do the people up North view the Trust? Mr M’Glashau : They view it with much disfavor, especially in Auckland Province and in Hawke’s Bay. When the Southern Trust failed to coerce the Northern millers, they endeavored to influence the master baiters, and with this object in view some millers and delegates from the Christchurch Bakers’ Union went to Auckland and endeavored to get the master halters there to combine and join with them to boycott the local millers; hut the effort was unsuccessful.

Reporter: What is the price of bread in Auckland ?

Mr M’Glashan ; Fivepence per 41h loaf. The bilkers, millers, and public there are satisfied with that price. The same wages are paid and the same hours worked as here. In Christchurch the price is sixpence.

Reporter: What return does 6d per 41b loaf give to the baker. Mr M’Glashan : £l7 10s for every ton of flour baked into bread.

Reporter; What is the cost to the miller for every ton of Hour?

Mr M’Glashan ; I have seen it stated in the Press that it costs your local millers £7 11s lOd per ton. ■ in Auckland we draw our wheat supply from all parts of the colony, and we are necessarily at a greater disadvantage as regards first cost than Southern millers. But it costs nothing like £7 11s lOd per ton to produce our flour. As a proof of that I may mention that after shipping our flour to Dunedin and paying all charges incidental thereto, we are now selling Auckland flour in Dunedin at considerably' below the Trust’s prices. Reporter: Are you receiving much support in the South? Mr M’Glashan : Yes, I have received considerable support, and would receive more were it not that produce merchants, bakers, and general storekeepers are in abject terror of the influence of the Millers’ Trust. But as we are here, and here to stay, that influence will, wo hope, gradually wear off. No doubt if the Southern combine continue to manufacture flour, and use Auckland as a dumping ground irrespective of price, my company may seriously consider extending our milling operations in the South.

Reporter: Do you mean that you may start mills and run bakeries of your own? Mr MUlashan; We are not here in any way to interfere with the trade of the bakers. We are really here to assist them if they are willing to'be assisted, by placing them in a position to be independent of the combine. Reporter: A statement has been made here that a baker turning over four tons of flour per week gets only £1 6s 4d profit? Mr M‘Glashan ; Of course that is, on the face of it, ridiculous. No man would continue to do a turnover trade of £SB 8s 4d per week for such a return. Reporter: What is the price of flour in Christchurch? Mr MTRashan; Fifteen shillings per ton less than in Dunedin. Some of the nußs there have not been absorbed by The Trust, and consequently the price of flour is lower. The bakers of Christchurch are like the Millers’ Trust—they have banded themselves together, and can do what they Tike with the public as regards firing prices. Reporter: Do you know anything of the rules of the milling combine? Mr M’Glashan: Oh, yes; I have them all. Rule 20 says: “The Committee of Management shall have power to fix prices at an unremuneralive rate if it should be necessary to do bo in order to suppress unfair competition.” The word “ unremunerative ” is significant. It really means tbe suppression of fair business competition, and is against the best interests of the community at large. At a meeting of the combine in Wellington ..a, resolution, - was

passed binding .the bakers not to purchase flour from toy mill outside the Tnist. Reporter: You say the master bakers of Canterbury have alto formed themselves into a combine? Mr Mtllasimn: Yes. Rule 2 .of their Association sets out that the combine exists, among other things, “to regulate the price of bread ”; and rule 10 provides that the Committee which is to regulate the price shall consist of three millers and three bakers, and that a miller must. be chairman, and that as chairman he shall have a deliberative and casting vote, loe millers therefore, and not the bakers, fix the price of bread. Rule 28 provides that no member of the Canterbury Bakers’ Association shall deal with a miller who is not a member of the ring, and provision is made for expelling and boycotting any baker so offending. Reporter: How many mills stand out of the combination?

Mr M'Glasban; Five mills in the North have positively refused to have anything to do with the combine. Reporter; Does the boycotting extend to Otago bakers who trade with outside mills! Mr M'Glashan: I understand that it does. One Dunedin baker did get flour from an outside source, and he was immediately threatened by the Trust that they would stop the supply of their flour to him. That was before my arrival here, hat should such a thing occur now any baker can rely upon being supplied with first-class flour at a price considerably lower than he is paying to the combine Reporter: The greatest sufferers from combines and trusts are the masses of the people? Mr M'Glashan : Undoubtedly. The laborers generally of America are suffering greatly from the effects of huge combines and trusts in various lines, and it is to the interests of New Zealand workers to see to it that they do not suffer as their fellowworkers are doing in America. It is out of the pockets of the masses of the people that the combine must make its huge profits.

The last remark closed the interview, and the pressman took Ids leave pondering over the peculiar methods of modern competition.