SUPPLY OF FLOUR.

Hawera Star, Volume XLVIII, 3 November 1924, Page 5

SUPPLY OF FLOUR.

ALLEGED MONOPOLY. THE defence outlined v (BY TELEGRAPH PBESS ASSOCIATION.) T , ~ DUNEDIN, Nov. 1. Ihe defence in the flourmillino-' case was opened to-day by Mr. M. Myers. The ease is one in . which the Crown dairns a penalty of £SOO from the Grown Milling Co.,V Dunedin; Fleming a «d_ Co., , Invercargill; the Atlas Roller Flour and Oatmeal Mill Timaru;, Wood Bros., Christchurch; and Distributors, Ltd., Christchurch. An injunction i.s also being asked against the first 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 further injunction is being asked for against Distributors, Ltd., prohibiting them from continuing to act as sole selling agent. - Mr. Myers stated that while there was a very strong argument for asking the court, for a motion for a nonsuit it was preferable .that evidence should be heard. _ It was plain that the fixation of prices by a commercial trust was no. offence unless the prices were unreasonably high. It was also .submitted that a combination was not illegal, unless contrary to the pubic interests. Nor was an agreement contrary to the public interests merely because it was in restraint of trade. The fact that the scheme might cause a certain amount of inconvenience to a certain number of traders did not bring it within the provisions of the statute. A scheme which was reasonably necessary for the protection of industry and which was intended to keep'up the price did not constitute an offence unless the price was unreasonably high. This case became one of fact a.s to whether the scheme-was contrary to the public interests and the onus of proving that was on the Crown. Counsel was unable to see now the case : came under sections 1 three and four of the Act. The contention that it came under section three was an attempt to bring it in the same position as the sugar case. It was clear that the sections mentioned dealt only with transactions in buying and selling and they were not applicable. Everybody knew , that these sections were _ intended to meet the case, of a certain organisation that had a partial monopoly, and whose svstein was to sell its goods upon such terms, that after a certain period, if a customer had not bought the same class of goods from anyone else, he was given a rebate. Section four, was :to cover a converse case, that of refusing consideration where a company fixed its charges with the object of preventing someone getting a rebate. Mr. Myers said that the company, at the outset,, disclosed the nature of its operations to the Board of Trade and the Department of Industries and Commerce, which fully understood the terms, of the agency agreements. This was shown by the answers given by Ministers in the House. It was in the following October, November and December period of 1923 that protests were made by Southland bakers, .and some months later action was commenced. There were no disaffected bakers outside Otago and Southland. Counsel contended that the action against Distributors. Ltd., was entirely unnecessary. The formation of Distributors. Ltd., brought, about a reduction of fourshillingsa ton in the price of bran and pollard without any corresponding increases in the price of flour. The formation of Distributors, Ltd., had made it possible to stabilise* various allied industries. Had it r.ot been for the establishment of Distributors. Ltd., the wheat agreement of 1923-21 would not and could not have been made, and chaotic conditions would have resulted. But for the stabilisation of the industry Nev Zealand would have had to import most of its wheat, bran and pollard from Australia. At the time Distributors, Ltd., was formed it was presumed that the embargo on Australian Wheat would be removed at the end of February, 1923. Counsel said the agreement contained clauses, providing against a general output of poor quality flour. It was not denied that serious inconvenience. was caused iii Southland, but the position would have been as*had under free competition. Mr.- Myers .said, in reply to the judge, that no substantial profit was made by Distributors, Ltd. •Evidence for the defence will be heard on Monday.