LICENSING OF DAIRIES.

Hawera Star, Volume LII, 18 November 1932, Page 4

LICENSING OF DAIRIES.

An Order-in-Council gazetted last night makes some important amendments of the regulations under the Dairy Industry Act in the direction, apparently, of exercising a greater measure of control over inter-factory competition. The new regulations provide that from today no dairy produce may be manufactured “in any manufacturing dairy” without a license from the Director of the Dairy Division. The requirement of registration for dairy factories previously existed, but it would appear that the main object of the new regulations is to increase the scope of the Director s powers of refusal of applications with a view to suppressing uneconomic competition. Any Government order which interferes with private enterprise naturally calls for close scrutiny, foi the principle is a dangerous one, but in 1 this instance it should not be difficult to justify it. It is a strange anomaly of our dairy industry that, though it is a co-operative enterprise, it also wages fierce competitive wars within its own ranks. The results of this form of competition are not entirely beneficial to the industry ns a whole; for one thing it increases overhead costs—particularly in the home-separation areas —and, for another, it has certain ill-cffeets on (he quality of the product. This latter result is not peculiar to the buttermaking areas, but to some extent it has been counteracted in most eheesemaking districts, including South Taranaki, by the “gentlemen’s agreement” which prevents suppliers changing irom one factory to another during the currency of the supply-season. This evil of over-lapping has long existed, but hitherto the Government has refused to recognise it as one of its responsibilities. However ,the mills of the Government grind slowly and strangely and at

last they have produced a regulation which will compel those desiring to start a new dairy factory to show (1) that there is an economic necessity for its establishment; ( 2 ) thatrthe new venture has a reasonable prospect of success, and (3) that its competition with existing concerns is not likely to result in a lowering of quality of the product.