MANAIA DAIRY FACTORY.

Hawera & Normanby Star, Volume X, Issue 1956, 15 June 1888, Page 2

MANAIA DAIRY FACTORY.

A meeting wil\ be held on Saturday to consider the advisableness of winding up the Manaia Dairy Company. We believe tbat the prospect before Dairy Companies was never brighter than at present, and we venture to warn milk suppliers that the tables may shortly be turned upon them if they consent to any departure from true co-operative principles. The art of factory dairying has in this district been taught at the expense of shareholders in the past. At Mauaia, for instance, the position at present stands roughly as follows : — The directors are personally responsible for an overdraft of .£350, the bank holding the building and plant as collateral security against that advance. The Company has; cheese and butter in hand or under

advance, together with a small amount of book debts, which jointly make up available current assets valued roughly at £460. Against these available assets there are, besides the overdraft, liabilities of <£310 in the form of promissory notes, and .£l9O on the books owing for milk. If all milk suppliers were paid in full, and all assets realised good prices, there would still be another .£4O to add to the overdraft. In order to clear the directors, the building and plant would have to sell for ,£4OO. But, in the event of any cheese being damaged in transit to London, or of a few book debts or arrears of calls due to the Company, and now held to bo good, not realisiug the estimate, the directors might have a considerable personal liability to meet. They would certainly avoid "this if they could, and, if a resolution to wind up the Company were carried at the meeting called for Saturday, would doubtless refuse to meet any promissory notes or any debts due for milk, except out of nett proceeds of sales actually received. In equity milk suppliers are entitled to the amount realised for the dairy produce sold, less working expenses, and less, say, 5 per cent, on the outside capital invested in factory shares. It matters not whether the nett proceeds of the factory, less those deductions, represent Id per gallon or scl per gallon ; the vmllt suppliers could receive no move than the proceeds, less working expenses and interest on capital, if the cheese and butter, all the building, and all the milk belonged to all or to any one of them. The mistake made in the past has been to promise, and to pay, a full, and often far more than a full, value for the milk before it was known whether the cLeese would fetch, or had fetched, 3d or 5d per lb, and the butter had sold for, or would sell for, 6d or lOd nett per lb. As a matter of fact, the milk suppliers in all the local factories have received not only full value for their milk, but also most the capital of the concern, and in some cases some oi the diretors' private money besides. Whether this has been, clue to bad milk, bad management, want of cool storage at the port of departure, want of cool chambers on board the steamers, excessive freights, or anyone or all of these causes combined, the real value oi: the milk was reduced, by such causes, below the price paid. The capitalists ought not to have their capital forfeited, nor the directors their private pursea emptied, because of bad management, due to ignorance and not to any neglect of duty They got no pay, and they stood to lose such money of their own as they had invested in in shares in the concern, \i the working of the factory was not at first a financial success. That is past and gone, and it is manifestly no use crying over the spilt milk. What we fear will happen, if the Manaia Company goes into liquidation, is this : Two or three shrewd men will buy up the factory and plant, which has cost £1200 or more, for a couple of hundred pounds ; they will say to their neighbors we can only give you so much for your milk, and if dairy prospects hold out as well as they promise to do, these factory owners will be able to make their own terms and handsome profits — profits which would be largely due to the capital and energy of the neighboring milksupplying farmers, whose factory, worth perhaps £1000, the syndicate might have bought from the Company for a fourth of its value. True co-operative dairying is a great boon to the small farmer. Under good management he gets the profit and advantage of a wholesale manufacturer, while his own capital and occupation would, but for that, only entitle him to the position and profits of a small retail man. But ii! the factory fall into the hands of one or two men, the small farmer at once M\s back into his position as a small retail man, and will readily accept any terms offered to him by the factory, if tbey are only a fraction better than he can make by home manufacture and retail trade. There is no fear of much competition ; for any dairy factory commands a practical monopoly of the supply of milk within a radius of three or four miles or more. No outsider can come in and erect another rival factory within that area, without having to risk a desperate game of cut-throat competition and ultimate survival of the fittest.