MEAT WORKS SALE

Greymouth Evening Star, 1 February 1926, Page 3

MEAT WORKS SALE

MINISTER’S VETO RESENTED.

(Special to "Star.”) • January/30. The refusal of the Government to grant a transfer of the meat killing license of the Wellington Meat Export Company to Thomas Borthwick and. Sons, Ltd., was the subject of a protest to-day by Mr J. Milne, General Manager of the local company. He said that his directors were so surprised at the. of the Minister that they could only assume that owing to recent Cabinet changes, this important matter had not received the conslideration it deserved. The depreciation of any assets by the act of a Government without compensation is so far

without precedent in New Zealand, and the only reason given public policy is tainly is not going to d pso by his accourse of action, remarked Mr Milne. The firm of Borthwick’s is so well and favourably known in New‘Zealand and England that the directors of the Meat Export Company felt confident that no obstacle would be put in the way of the transfer. If the Minister had in mind the curtailing of the operations of Borthwicks in the North Island, he certainly is not gong to do so by his actions. The firm in question already owns two small works conveniently situated to good shipping ports, and there is nothing to prevent the company enlarging the capacities of these works, and enable it to draw extensively on stock in Wellington province

with very little extra cost. The extraordinary part of the business therefore is that while the value of the. assets of the Wellington Meat Export Company are seriously depreciated by the action of the Minister, Borthwicks are in no wise.restricted as to the development of their operations. Their present license enables them to operate in any part of New Zealand. Their competition generally has been welcomed

by. producers. As a matter of fact the only reason, for considering the proposal of the purchase of the Wellington Company’s business was to ensure a regular supply of lambs, of which they make a feature of their distributing businesses. He said that his company had been in existence forty-five years and had

taken a considerable part in the development of the meat export trade in New Zealand. The share capital was held by mixed shareholding farmers an ordinary investors, but the latter hold over 60 per cent. In recent years, the carrying on of the business of the company had been very difficult. The company was now faced with the alternative of selling or closing down. In the interests of shareholders, it was deemed advisable to sell. That decision had been sanctioned by the shareholders themselves. The effect of the sale, if it could have been completed., would have been that shareholders would receive 8s in the £1 on the capital they' invested. TKe vetoeing of the transfer of license means that the sale must be cancelled. The position of the company becomes more difficult than ever. The result of the Government’s deci-

sion would mean the shutting out of a considerable amount of British capital, which he considered was a dangerous precedent, which must surely work prejudicially to the Dominon. There are no buyers in New Zealand. Accordingly the decision of the Government depreciates the assets of the company to a very serious extent. The only way that his company could carry on would be by introduction of fresh capital, and what investor would invest money in meat works after the decision of the Government. Mr Milne stated that the directors of the company had asked Cabinet to reconsider the decision. Until they had received a further reply he could not say exactly what would happen.: