SUPPLY OF FLOUR.

Hawera Star, Volume XLVIII, 29 October 1924, Page 10

SUPPLY OF FLOUR.

A MONOPOLY ALLEGED. COMPANIES PROSECUTED. (BY TEI.EGUAJ’H —PfivKS ASSOCIATION. DUNEDIN, Oct. 28. The case in which the Crown claims a penalty of £SOO from the Crown Milling Co. (Dunedin), Fleming and Co. (Invercargill), The Atlas Rollei Elour and Oatmeal Mill (Tiinaru), Wood Bros. (Christchurch), and Distributors, Ltd. (Christchurch) was commenced in the Supreme Court this morning. An injunction was also asked against the finst four companies prohibiting the continuation of the employment of Distributors, Ltd., as the sole selling agent for flour, bran and pollard, and from entering into a similar agreement in future. A fur-*-bev injunction was asked for against Distributors, Ltd., prohibiting them from continuing to act a.s 'Sole selling agent. Mr. F. B. Adams (Crown Solicitor), with Mr. c J. B. Gallan, appeared for the prosecution. Mr. S. Roloman. K.C., with Mr. W. D. Campbell i'Tinr’ru), renresented the Crown Milling Co.', and the Atlas Co., Air. Al. Myers, K.C. (Wellington), with Mr. A. N. Haggitt. represented Distributors, Ltd., and Mr. C. P. Skerrett. K.C.. with Air. Sim. rep'esented Fleming and Co. and Wood Bros. c ’ REPLY TO ALLEGATIONS. The statement set forth that about October, 1922, the defendants unlawfully conspired to monopolise the supply of flour, bran and polard contrary to the public interest. In defence, the statement of the creation of a monopoly is denied, or it* a monopoly and control existed it was not contrary to public interest but was reasonably necessary to stabilise and maintain an important Dominion industry and secure economical distribution. It was further claimed that the operations were consistent with the Government’s action through the Board of Trade and the wheat controller ; also that the operations of Distributors, Ltd., had the approval throughout of the Government authorities Air. Adams, in opening, stated tli<?‘ the flour milling trade of New Zealand consisted approximately of fifty flout mills,'the annual output of. which was 132,000 tons. The capacity of these mills was three times the output and three times the Dominion’s requirements: yet, instead of keen competition between the mills, there Was found a great body, combined and working together under an •‘agreement referred to in the statement. There were great differences in the size and the adoouney of machinery in the mills, and the circumstances were such that on a free market it might be expected that the smaller mills would go bv the board, the larger ones taking them over. No mills in Auckland were associated with Distributors. Ltd . but outside that district it controlled the output of the whole of the Dominion, for in the South Island there -Arere only four small nulls not under. Distributors, Ltd. GOVERNMENT CONTROL ENDS. The amount of Hour produced by the free mills was 14,050 tons, or iust 1J per cent; of the total production apart from the Auckland mills. It was alleged that the monopoly was practically complete. Counsel stated that Distributors, Ltd., came into existence in 1922, and it was in the conditions existing then that the defendants sought justification for the combine. The Government then wished to relinquish control, of the wheat industry, and announced no guarantee for the next season’s wheat. The defendants contended that this announcement showed that the 'Government was competent to deal, with the position. In 1922 flour'was fixed at £lB a ton. In the year, after the defendant company was formed over 10,000,000 bushels oi wheat were grown, so that there v.as no danger of a shortage and mo reason for millers to pdy undue prices. The price to the grower was fixed >•' the beginning of the following year, and in May the bulk of the crop for the next year was already in tlie ground, ily February the whole crop ww in the ground; yet in September, 1922. the defendant company commenced operations, though so far as the supply Avas concerned there was no fear till 1924. Therefore, if those who formed the company two years before there avus a possibility of the industry becoming unstable did so in the public interest, they were far-signted. Counsel submitted that it must he recognised that the flo imii.ers K-eieo free competition, and that, while none of the three important industries was menaced, they were determined to secure the position for a:l time. The existence of keen competition between the millers after five years of Cover.imnt control was a clear indication of the difference between Government control, and that of defendants. Air Adams stated that the agreement between Distributors Ltd., and Die oilier defendants gave the company power to deal witli the Auckland mills. They would, not do this, the Auckland mills being too strong, but they out the \\aiwera South mill out of existence. BAKERS GIVE EVIDENCE.. At the conciusioii of Air Adams’ address, Air Lallan proceeded to call evilence. William Josiah Love, flourmiller, of Christchurch, said mat prior to Distributors Ltd., coming into existence he ’.vas doing 2500 tons y-.aily. but was offered a quota by Distributors, Ltd., of 1200. He declined, and was given 1500 tons, which he considered unfair. He was not enthusiastic about Distributors. Ltd., although lie had joined up with it. Brigham Cameron Hancock, baker, of Riverton, said that before Distributors, Ltd., started he used four coherent brands of flour, but subse-iueutly lie got flour from Distributors, Ltd ; s agent at Invercargill. Ee could not get the same proportion of northern (lour as previously, avid the qua iiy of some of the floor was patchy. Ho hr.cl to take a good deal more Fknmiir’f ilour than lie cidered. Robert John Cochrane, baker, cf Dinton, said that since Distributors, Ltd., bad been operating he had used nothing but Fleming’s {‘our. lie used i mixture before that. The case was admurnod till 10 o’clock to-morrow.