BUTTER MARKETING

Grey River Argus, 12 October 1936, Page 3

BUTTER MARKETING

IN NEW ZEALAND No Regulation at Present (Per Press Association). WELLINGTON, October IL In furtherance of a promise made by Mr Nash. Minister of Marketing, that he would,, before leaving the Dominion on his mission to the United Kingdom, make an announcement of the Government’s intentions regarding the regulation of the local marketing of butter, the Minister has issued the following statement: — At the presieirt time the prices at which butter Is sold by dairy factory companies for local eoimumption bear a niioi’et or '’ess definite relation to <he prices paid by the Government for butter intended for export. Retail prices vary somewhat from town to town, but in each town, competition among the l retailers keeps prices on a reasonably uniform level. Lower retail prices in a particular city or town are. in the majority of cases, due to the fact that a dairy factory company or companies have factories ~u or near that c,'lv on town, and tire able Li maiiitai'ii their x>wn distribution serviced to retailers at low costs. In the cities' and towns in which the distribution is handled 'by mercantile firms;. the cost of th,) necessary services is somewhat greater. At the commencement of the present dairying season (August Ist), which coincided with the inception of the system of Government purchase id' Iwitter intended for export, there was a. considerabi'e quantity of last season’s butter in store. This butter was not subject to 'the provisions of the Primary Products' Marketing Act. and it; was thought that it would be desirable to avo : d possible eoniplieat.iions, and, for that reason, to refrain from regulating the prices on the local market until 'this butter had been disposed of. Butter remaining from last season has now been disposed of. but no unanimity exists in the industry asi to the leve;l at winch the locijJ prices of butter could, or should, bo fixed, or indeed, ns to whether any fixation is desirable. If the Government were to regulate the local prices of butter, if would be bound, by 'the provisions of the Act, to fix thejm at siidi levels as to assure to the producers a net return equivalent Io the return derivable from the sale Io the Government of simVar butter intended for export. Owing, Io some extent at least, to varying circumstances in d-llerenf localities. there, is, insofar as distributors and retailer,® are concerned, no general agreement a* to what constitutes a fair, reasonable re in tine rat on for their services in handling butter after it hast been acquired from dairy factory companies. The Government accordingly, has decided Io take no aetfion nt present in the direction of regulating the prices of butter on the local market, except insofar as it may be in'cessai J, in th'ei interests) of producers, to provide, by. regulations, that no dairy factory company shall sell butter at a •price ’ that, after till due allowance has been made for savings in storage and other costs, will produce; a n'et return lower than that obtainab'e for sale to the Government of similai butter for export. If,, at a later date, experience suggests that more complete control of the organisation of sales on the local market, is necessary to ensure the export parity for the, producer and a rea-onalr'e price to the consumer, 'the necessary steps will hi. taken. Tn the meantime, the Government desires all those engaged in distribution to eliminate some of the competitive practices which haie, in the past, resulted in sales under costand elements of uneconomic and chaotic conditions which result in advantage neither to the produce,i noi the consumer.