RISE IN PRICE OF BUTTER.

Horowhenua Chronicle, 2 December 1938, Page 8

RISE IN PRICE OF BUTTER.

ONLY 1/2 IN LONDON. COMMENTS OF RETAILERS The new retail price of butter in Wellington will be Is 6d a pound in some shops and Is GJd in others. "Our price will be advanced from Is 4d to Is Cd a pound as from noon to-day," said the managing directox oi cue group of Wellington stores carrying on both cash and credit business, when interviewed by a Post reporter. '' I will not say that that will be the linal price," he added. "It may bo increased to Is CAd if an agreement is come to by Wellington retailers. As a matter of fact the gross profit of 1-Jd per pound we will be making henceforwards on an increased wholesaio cost is barely sufficient to pay wages without allowing for other items ill our overhead. A profit of a pound on a cost of Is 4£d means a margin oi only 9 per cent., whereas we shou'it be entitled to at least 12$ per cent, which would represent an increase of 2d.

"Another appreciable difference lias been made by the fact that butter now conies to us packed in cartons instead of in wooden boxes,'' he added. '' Jt is impossible to dispose of the cartons, but previously we could obtain 9d each for butter boxes. On a weekly turnover of, say, 100 boxes, that meant an additional weekly profit of £3 15s. Ail these factors should properly be taker, into account when the final retail price id fixed."

Higher Than It Should Be One of the directors of another Wellington grocery company said that Government control of the internaV butter market had caused the price of butter to be considerably higher than it should be.

"We must set our new price at Is Gid a pound," he said, "but if we could continue as we formerly did and buy butter in bulk at the guaranteed price and wrap it ourselves wo couJd retail it at -Is 5d a pound, and make a slightly greater profit than we can make from to-day. In other words, the price of butter is now lsd a pouud higher than it should be. "It is obvious that the guaranteed price is too high, and that the Marketing Department has increased the wholesale price in New Zealand in order to recoup some of the losses that it anticipates making in the guaranteed price account," he continue i. '' One also wonders why the new wholesale price was not put into force when the new guaranteed price was announced some time ago. That and other questions require an answer." Selling at Is 2d in London

New Zealand butter has been selhug retail in, London for some weeks pasi at Is 2d per pound, and even at Is p? lb. in order to increase its consumption. The wholesale price during October was from 114 sto IKis. During November this price has been reduced to 100 s pur cwt., and the latest price "is 104 s to 105 s, with Australian down to 102 s. is 7d Too High and Unfair

A published report that some grocers were intending to charge Is 7d a pound for butter over the counter wa.brought under the notice of the Minister' of Marketing, who described tint price as altogether too high and unfair, when compared with the rise in the' wholesale rates.

Mr. Nash pointed out that the Government had power to fix the price to the consumer as well as the wholesuu: price, but added that up to the moment it had not contemplated any action.

CHRISTCHURCH UNDECIDED STABILISATION SHORTLY. CHRISTCHURCH, Last Night. The new retail price for butter has not yet been fixed by tho grocers in Christchurcii, but it is likely that there will be stabilisation within a lew day si. In the meantime there are different prices. The rise in the wholesale prices, which was announced by th<j Minister of Marketing, Hon. W. Nash, will mean some rise in the retail price. Retailers do not fear that the increut-e will mean much curtailment in business, but every penny on the pricmeans that there is a certain amount of economising by housewives. Retailers recall, however, that butter >;<.'lu with little change in volume when ii was as high as 2s 3d. The retail profit made on butter recently has been very modest, most retailers claiming that it has not paid expenses, but as butter is a line whuh every grocer must carry, there is no escaping the position. In most parts of New Zealand butter has been at ontime or another the subject of pri-e cutting, and at times when price cut' ting has become fierce, grocers have had to sell below eost. With the fixing of the wholesale price, retail prices, mi most centres have been stabilised, !-ui competition among grocers has kept tin.* margin of profit very low.