WILL LICENSE BE REFUSED?

Gisborne Times, Volume LXIV, Issue 11011, 26 January 1926, Page 2

WILL LICENSE BE REFUSED?

MEAT COMPANY’S D.ILEMMA. MEAT BOARD AND ANTI-TRUST LAW. WILL -IT BeTbOOMERANG? The thorny question of the right (or lack of right) to sell freezing works to the best available buyer—in eases where it is the interest of the owners to sell, or the interest of their creditors to sell—has again confronted the Government On the former occasion the buyer was the big overseas .meat firm of Vesteys (or Nelson Bros., as their agent), and the freezing works was that owned at Poverty Bay by the Poverty Bay Farmers’ Meat Company, headed by Mr. W. D. Lysnar. The moving force behind the'sale was not the Poverty Bay Farmers’ Meat Company, but its creditor, the National Bank of New Zealand. EXTRA LICENSE? In the present case the buyer is another big overseas meat firm, Borthwicks; and, on the vendor’s side, the company itself (Wellington Meat Export Company) and its shareholders 'desire the sale. In that respect the cases are not parallel, and they also differ in another important detail, in that Vesteys (Nelsons) were prepared in Poverty Bay to surrender an existing meat license of their own already held in the same district, in order to buy the Poverty Bay Farmers’ Meat Company’s license and works. But so itar as is known, the proposed purchase by Borthwicks of the Wellington Meat Export Company’s works is not qualified by any proposal to surrender any existing license, and in that case the sale would mean—what it did not mean in Poverty Bay—the acquiring by an oversea meat firm of an additional license. OVERSEA INTERESTS IN FREEZING. That point might be deemed important by the Meat Producers’ Board in dealing with Borthwicks’ application for license, in view of the wellknown and much-discussed powers that the law provides to prevent the extension of oversea proprietary interests in freezing works. Colour is given to this supposition by the fact that the application to the Meat Board for a.license to Borthwicks—or. which the sale of the Wellington Meat Export Company’s undertaking depends— has not yet been granted by the Meat Producers’ Board. It is even reported —though no official confirmation can be obtained—that the hoard has arrived at a decision rot favorable to the application. And it is known that representatives of the (would-be) vendor company have interviewed Ministers. A . further interesting feature—though one possibly, without special significance—is that this important question is reaching its climax just as the Department of Agriculture—which administers the Government’s relations with the Meat Producers’ Board—is changing Ministers. .SECURITY AND CREDIT ASPECT. Opinions may differ as to the extent to which the situation is governed by the fact that Vestcy’s application (which was granted) did not increase the number of Vesteys’ licenses. But if Borthwicks’ application were refused on the ground that it would give an oversea firm an additional license, the general question of the right of a meat-freezing company to sell to the best buyer would remain ; and if a Government, while not forbidding a sale, were to render it impossible by refusing a license to the buyer, the foreseen and the unforeseen reactions on the credit of meat-freezing undertakings and on the prospects of their shareholders could not be wholly disregarded. The question is a highly arguable one, and the commercial world will follow the present application with the same interest as it followed the Gisborne case, even though different circumstances may deprive the situation of the dramatii elements provided last year by Mr. Lysnar and Mr N'osworthy.

j It has been pointed out that acquij sitibn of the works of the Wellington j Meat Export Company (at Ngahauj ranga and Knkariki) would give Borthwicks a Wellington apex to their triangle, the baseline of which may be drawn between their Taranaki and Hawke’s Bay works. Vesteys’ holdings are in Hawke’s Bay, Poverty Bay and in the neighborhood of Auckland The -whole question of the alleged ex' cessive decentralisation of New Zealand meat-freezing industry, and of putting it on a sounder basis of capi- | tal and credit, lies back of the special 1 measures of legal protection that the • Government has endeavored to create as armour against trusts.—“. Dominion.”