Alleged Flour Monopoly

Hawke's Bay Tribune, Volume XIV, Issue 277, 3 November 1924, Page 7

Alleged Flour Monopoly

PROSECUTION OF DISTRIBUTORS. CASE FOR THE DEFENCE. (Per Press Association.) Dunedin, Nov. 1. ! ♦ In the flourmilling caso tho evidence was opened by Mr M. Myers, K.C., who stated that while there was a very strong argument for asking the Court for a motion for a non-suit, it was preferable that tho evidence 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 contrry to the public interest, nor was an agreement contrary to public interest merely because it was in restraint of trade. Tim fact that a scheme might cause a certain amount of inconvenience to a certtdn number of traders did not bring it within the provisions of tho statute., A' scheme which was reasonably necessary for the protection of industry and intended to keep up prices did not constitute an offence unless the price fixed was unreasonably high. This case became one of fact as to whether iiw» scheme was contrary to tho public interest. The onus of proving that was bn the Crown. Counsel was unable to see how the caso came under sections 3 and 4 of the Act. The conten<tioj» that it came under section 3 was an attempt to briiig it into the sumo position as tho sugar case. It was clear that the section mentioned dealt only with ’jransactions of buying and selling and was not applicable. Everybody knew that these sections were injhmded to meet the case of a certain that had a partial monopoly, whose system was to sell goods upon such terms that after a certain period if a customer had not bought the same class of goods from anyone else ho was given a rebate. Section 4 was to cover a converse case, that of refusing consideration where a company fixed its charges with the object of preventing someone from getting a rebate. Mr Mynra said the company at th* outset disclosed the nature of its operation to the Board of Trade and the Department of Industries ,and Commerce which fully understood terms of th* agency agreement. This was shown by the answers given by Ministers in the House. It was in the November-D» cember period of 1923 that protests wore made by tho Southland bakers. Some months later the action was commenced. There wore no disaffected bakers outside Otago and Southland. Counsel contended that tho action against Distributors was entirely unnecessary. The formation of Distributors brought about a reduction of 4s per ton in the price of bran and pollard without any corresponding increase in the price of flour. Th© formation of Distributors had made it possible to stabilise various allied industries. He it not been for the establishment of Distributors tho wheat agreement of 1923-24 would net and could not have been made and chaotic conditions would have resulted. But for the stabilisation of the industry New Zealand would have had to import most of its wheat, bran and pollard from Australia. At the time Distributors wa a formed it was presumed that the embargo on Australian wheat would be removed at the end of February, 1923. The agreement contained clauses providing against a general output of poor quality flour. It was not denied that serious inconvenience was caused to Southland .and tho position would have been as bad unclcr free competition.