DAIRY EXPORTS.

Hawera Star, Volume XLV, 21 April 1925, Page 8

DAIRY EXPORTS.

TH.E BRITISH MARKETS

CO-OPERATIVE SELLING

ADDRESS BY MR. MACFARLANE

Before an interesting meeting of dairy producers who assembled in the A. and P. Association meeting room at Hawera yesterday, Mr. 0. D. MacFa rlane, a member : of the London board of the New Zealand Co-oper-ative Marketing Association, delivered an address concerning the-.operations of tne association in Tooley Street, and, upon general questions concerning the marketing of New Zealand produce. Mr. MacFarlane was formally introduced by Mr. J. K. Corrigan, M.P., who occupied the chair, The chairman explained that Mr. MacFarlane had just returned from Great Britain, where his activities had brought him. closely into touch with matters affecting the selling of New Zealand produce, and he was therefore in a position to make available information of much interest and value to dairy producers of the Dominion-

Mr. MacFarlane opened his address with a brief reference to the history of the association. He explained that some live or six years ago the scheme had been advocated through the National Dairy .Association, and extensive inquiries into the matter had been made, and eventually the Co-operative Wholesale Society of England had appointed two of its'directors to visit New Zealand, Their report had been favourable," and with the financial assistance the C.W.S had made available, the association had commenced activities. It was found necessary to link the New Zealand organsiation with the C.W.S. in the formation of one company termed the New Zealand Producers’ Association, with headquarters in London to represent both interests, and the speaker and Mr. R. Ellison had been appointed as the New Zealand representatives .in England, the C.W.S. being represented by Sir Thomas Allen and Mr. Liddell. SELLING NOT RESTRICTED.

Under the selling arrangements the New Zealand representatives were allowed to lix their own prices, so thai mev were quite umiampered in the matter of disposing of produce sent to tnem. One of the first difficulties was the lack of extension of business throughout the British provinces, the various centres' had been visited and me, chants had been interested to meet producers from New Zealand. The first lias a knowledge with which the New Zealand (representatives, as primary producers, were equipped, being of much assistance in furthering their interests with the merchants. Later they ascertained that the Tooley Street merchants had . been over the same ground, endeavouring to discredit them by circulating rumours to the effect that the association was merely the I C. W.S in disguise, hut eventually the.\ I had been able to explain fully the I position, and, by giving details o: shipments coming to hand, had offered sales direct ex steamer, thus proving conclusively that the association operated independently anil was not merely an agent for the C.WS. | Further opposition had been made by the Tooley Street merchants in the form of under-selling the market qtiotaiion, and buyers who were first offered supplies at such figures had wanted similar terms from the association, the result being a great deal of trouble, as .the association had refused to lower its prices, realising that such action woniu soon put it out of business. To the mercants’ statement that they could buy better elsewhere the association had replied by advising the buyers to secure as heavy supplies as they could at the lower figures, the result being that the object of the under-selling policy had been defeated, and the association had become a recognised, fixture in business. EFFECT OF SPECULATION. At the outset marketing conditions had been somewhat mixed, merchants competing as to the quantity of New Zealand butter they could receive when, as the result of supplies being held bv the Government and marketed in large quantities, the prdouce was coming in at a low price, hut these conditions had subsequently been restored to normal. One good effect of .'lie Government having held these sup-

plies hud been to prove conclusively the preservative qualities of New Zealand* butter, and had shown that after a lengthy period of storage its condition was tar m advance of such makes as Danish, Irish, Canadian and Australian in similar circumstances. Mr. MacFarlane introduced a case in which just prior to leaving England he had been "able to dispqse, at the top price of 2285. a quantity of butter which had been quoted in Scotland. The release of supplies in such large quantities had, however, been the start of extensive speculation, and such had continued right up to the present time. The merchants themselves had been the largest butter speculators, jit common with their dealings ill other commodities, and they acted in concerted fashion such as would lead an observer to believe that a uniform policy had oeen arranged. The result was that they could virtually control prices as they desired. The wholesale trade recognised this, and that when the bigger operators came in the smaller men had to suffer. This was a matter which had been given attention by the association, whose aim was to establish more stable prices and so guard against fluctuations which would be detrimental to producers, it was quite evident that speculation business was of no use to people in New Zealand, and it was time they took action oil the matter. DISTRIBUTION OF PRODUCE.

Considering this question further, the matter o 7 supplies arriving at out- ■ ports had been investigated. New Zealand produce was mostly sent to • London, and the added frieght to outports' feeding big industrial centres made it difficult to show a favourable comparison, in prices with Canadian supplies which had been shipped direct. The association was considering forwarding monthly shipments to such places so that supplies, particularly of ! cheese, could be made available as | cheaply as possible in the large niinI ing centres, where the commodity was | greatly in demand. Supplies, however, : should be distributed evenly, it being jof little use to glut one centre and | leave others in short supply. Reverting to the effect of speculation, Mr. MacFarlane related an experience detailed .by a fellow ship passenger, wno had stated he had just received a cheque for £sUd(j as the result’of a deal in New Zealand butter. Since, his' arrival in Ne w Zealand, the l speaker had also heard of several local speculators whose operations had had a disturbing effect on the market. F. 0.8. sales constituted another disturbing factor. A favourable buy m New Zealand sometimes silenced under-selling on the Home market, which arrested the whole position so • far as other stocks were concerned,j I with a resultant accumulation and | tendency to decline in prices. The j ' speaker gave an instance of a consignment of butter being allowed to go at I 218 s. where the market quote was j 22(15., which figure should have been maintained but for the action of the people concerned in forcing it down, j the loss to ’producers 'being obvious. J it was clearly evident that the whole business should be organised oil diner-1 ent lines if producers were to receiv# the results which should accrue to them. ' ECONOMY EFFECTED. The position with tlje association, continued Mr. MacFarlane, was that after all expenses had been paid the profits were divided among shareholders in the New Zealand company and the company in .England. Last* year the association, as the result of* profits, had been able to remit a half per cent, of the usual 2} per cent, paid as commission on sales. Also, it could claim economy in exchange costs, as no charge was made respecting remittances, and neither was interest charged on drafts .from the time lifted until the clearance arrived. Investigations would show that the association’s activities would compare favourably with similar institutions, the turnover having advanced from £750,OOG in' 1920-21 to £1,225,000 in 192324. its success was probably due to a great extent to the fact that the association handled New Zealand produce only, whereas other sellers dealt in various kinds. New Zealand should have its own selling organisation operated by New Zealanders whom, he thought, would more than hold their own in the matter of business acumen. Properly controlled there would be no flooding of the market at one time and leaving it bare at another: NEW COMPETITORS. Referring to quality, Air. MacFarlane said that New Zealand cheese nad quite eclipsed the Canadian product, despite the higher price recently obtained by the latter. Those prices he explained were given for a specially matured cheese, whereas the usual practice of merchants . requiring matured New Zealand cheese was to purchase a quantity and keep it in store until it reached the degree desired. While, however, it was estimated that the volume of cheese business wouid not advance greatly at present, there appeared a likelihood of further competition on the world’s markets. Argentine dairymen were showing a big interest m cheese manufacture, and considered they had country just as favourable as Canadian or New Zealand for its production, and their operations would probably affect the position in the future. The Siberians were also endeavouring to gain a footing, and while their produce was at present greatly inferior to New Zealand manu. taccores, it could be expected to improve.

BETAIL PACKAGES. A further matter to be considered was tiie influence of new classes of cheese which were appearing on the market. Mr. Maeifarlane showed samples of American makes made up in b lb packages covered with tinfoil, l.he producers of which, he explained, were matting a serious hid to capture j cue demand previously made for (Jliedbar and European cheeses. The packages were arranged so that wastage »as eliminated; there being no rhind, and ,the-blocks being supplied .with a measure to ensure accurate cutting into half pound sections. Consequently the blocks were sought after ny retailers, and, tlie quality being good, tney had little difficulty in selling. and the popular demand was increasing rapidly. Tiie speaker favoured similar action on the part of Mew Zealand cheese producers and thought there would he a likelihood, jf .New Zealanders did not adopt the idea, of American or British merchants buying up New Zealand cheese and having it made up into similar packages. With present prices, such speculators would have a fair margin to work on, for whereas the samples produced were bought by the wholesalers at Is. Igd. per lb and disposed of to the ietailer.s at Is 3d, who in turn sold to the consumer at Is. 6d., New Zealand was at present being bought by retailers at Is. and sold at Is. 2d. tier lb.

As an instance of the recognition accorded the association by the Imperial authorities, Mr. MacFarlane, in concluding his address, stated that as had been reported in the London Daily Te'egraph of March 5, Sir Thomas Allen, a director of tne Co-operative Wholesale Society and chairman of

the New Zealand Produce Association, had been appointed to the Imperial Economic Committee being set up by the Imperial Government, in eo-opera-tion with the Governments of the Overseas Dominions, to devise methods whereby the marketing facilities for Empire produce could be improved. GENERAL DISCUSSION. Answering a question as to the effect of grading on the selling price oi cheese, Mr. MacFarlane intimated that the grade did not always govern the value received, as in different portions of the country different qualities were demanded according to the popular taste, and consequently if the top grade did not meet requirements a lower grade might often be given preference by merchants. Referring *to the payment in accordance with gradd as was proposed under the Dairy Control Board scheme, Mr. Corrigan asked whether Mr. MacFarlane considered such would be beneficial to the industry and fair "to producers. In reply, Mr. MacFarlane said the maintenance of a high quality, standard must, of course, be aimed at by all concerned. The introduction of a superfine butter grade would encourage that aim and would consequently benefit the'industry. So far as cheese was concerned, however,. the matter of individual taste figured to a much greater extent, and the establishment of a superfine grade would not necessarily have the same results. A general discussion ensued, during which other matters were ventilated, and Mr. MacFarlane gave further derails concerning the operation of the association. The discussion conclud.ed with a vote of thanks proposed by the chairman who. on behalf of the meeting, expressed appreciation of the interesting address given, and thanked Mr. MacFarlane for affording the benefit. of his experience in the important matters dealt with.