BREWERY PROFITS

Greymouth Evening Star, 14 September 1945, Page 4

BREWERY PROFITS

EXCESSES DENIED. WELLINGTON, September 13. Popular fallacies regarding the profits of brewery companies and other sections of the trade appear to exist, and at their origin are traceable to> the public’s purse, said Mr. Bernard. Thomas O’Connell, assistant-general manager and secretary of New Zealand Breweries Ltd., in evidence before the Royal Commission on Licensing. “If excise duty and sales tax were abolished on beer (this is purely a hypothetical assumption) it is probable that much of this misunderstanding about prices would vanish overnight. If it is realised that the price of.' a 12oz handle of beer would be reduced from 7d to 31d by the removal of excise duty and sales tax .and this price is compared with the price of a glass of milk (on which there is no excise duty or sales tax) at any milk ,bar or restaurant, a fair idea is gained of the point which I desire to establish,” said Mr. O’Connell. It was submitted that on the figures given the company’s profits were* in no way immoderate. The profit of £102,067 was from all sources, sales; of beer, interest, rents, dividends and profits from managed hotels. Of the total £32,000 consisted of a net profit Jrom non-manufacturing sources, leaving £70,067 attributable to profit from the manufacture and the sale of beer. That £70,067 represented the total net profits made on sales of beer by a brewery company producing apnroxiniately two-thirds of the total ,beer sold in New Zealand. The actual sales for the year were 13,303,386 gallons of bulk and bottled beer so that the net profit was just over Rda gallon. In. terms of bottled beer that amounted to about one-fifth of a penny a bottle. “Wo submit that in no other industry is the profit margin so low,” said! Mi’. O’Connell. “The company’s average rate of dividend for the five years; ended March 31, 1943, was 7.3 per cent, and the average amount set aside for* reserves was £7000.”