BREAD PRICES

Manawatu Standard, Volume L, Issue 63, 10 February 1930, Page 9

BREAD PRICES

AN INTERESTING SUMMARY. It 'will be remembered that during the last session of Parliament discussions took place on the question of duty on wheat imported into Now Zealand. The bulk of the wheat production is in the South Island and the growers there affirm they cannot grow wheat without some protection. To avoid wheat growers from going out of the business, the late Reform Government introduced a system of sliding scale duties which wont up or down within defined limits in accordance with the market price of wheat. This was confirmed by the present Parliament, members recognising the necessity for maintaining the cultivation of wheat which provided a considerable amount of employment and, also, provented large sums of money from going out of the Dominion annually for the purchase of wheat. In order to examine the demands for maintenance of the duty on the one hand and for its removal on the other, a special committee of the House was appointed to consider the question. The committee having reported in favour of the existing system, Mr F. Waite, M.P., in submitting the report briefly reviewed the facts in an informative speech in Parliament. The following are his references on the subject : “In the fifteen minutes allotted to me I a® afraid that I cannot deal adequately with this question, and therefore I propose to confine my remarks to the prioe of bread in New Zealand centres and the prico of bread throughout tho world, as disclosed by the evidence before the committee. I have come to the conclusion, based on the evidence submitted, (1) that the prico of bread in New Zealand is not high; and (2) that the sliding scale of wheat and flour duties protects both the producer and the consumer. THE ORDER OF REFERENCE. “Now the fifth point in the order of referenoe to the committee was as to whether the co6t of baking and the distribution of bread to customers is reasonable or otherwise. Such a matter raises the whole question of the price of bread to the consumer. The committee heard a great deal of evidence from bakers to the effect that costs were high and could not be lowered. But it is significant that where wages were low, as, for instance, in Great Britain, bread is the cheapest; and whore wages are highest, namely, in the United States of America, bread is the dearest. It appears that the high cost of labour, plus the high coet of transport, are the chief factors in what is known as the dear loaf. I ask honourable members to approach •this matter without any heat, and to resist being led astray by the fact that some say that bread can be bought at 4d in Britain whereas it is Is 4d in the North of Auckland. It is not fair to quote what may bo tho contract price to a big hospital in England, and contrast that prico with that charged for bread in one of the most out-of-the-way spots in tho North Island. BREAD CHEAPEST IN DUNEDIN. “I have hero a summary compiled from official documents supplied by officers of the Department of Industries and Commerce, showing that bread prices vary in different parts of the Dominion. In Dunedin the price of broad is lowest; in Auckland it is highest. Taking the prices charged by the leading bakers in the four centres in August, 1929, for tho 41b loaf, we find they are as follows: —In Dunedin for cash over the counter lid, booked 1s Did, and delivered Is Ojd; in Christchurch for cash over tho counter Is. booked Is, and delivered Is Id, booked Is, for cash over the counter Is, booked Is, and delivered Is 2d; in Auckland for cash over tho counter Is Id, booked Is 2d, and delivered Is 2d, and booked Is 3d. “Booked prices show an increase in each place, and there is also an increase for delivery, the increaso varying according to the distance tho bread has to be carried. That shows that bread is cheapest in Dunedin and dearest in Auckland, and that •the average price of the 41b loaf in the four chief centres is Is, and that since the sliding scales of duties has operated the price of bread ha 3 not varied to any appreciable extent. As a matter of fact, according to tho Government Statistician, the price of bread during tho last four months has been reduced in New Zealand by a farthing a loaf, whereas in Great Britain it has risen from 8d to IOJd. In August of this year a 41b loaf in London or Edinburgh cost, over tho counter, 10id —the same as is paid over the counter in Dunedin in many instances. Therefore, taking into account the wages paid in New Zealand compared with those paid in the Old Country, we in Now Zealand have a comparatively cheap loaf—at least, no one can say it is a dear loaf. BREAD DEAREST IN CANADA AND UNITED STATES. “I now come to the statistics given by the Department of Industries and Commerce, relating to prices ruling in various parts of the world in August of this year They disclose strikng facts, and I believe that those in this country who realise the significance of the figures will no longer complain that the price of bread over the counter in this country is high. Reducing the prices to the equivalent of English money, and basing them in all cases on 111 b loaf we find that the following were the Belling prices in the 1929 months indicated: London 24d (August), Edinburgh 24d (August), Dunedin 2Jd (August), Australia (average, 2|d (June 15th), Wellington 3d (August), Torotono 4d (May), New York 44d (March), (Chicago 5d (March). “It is an extraordinary fact that in Canada, where huge quantities of wheat are grown, bread is far dearer than it is in London or even in Auckland. So that, compared with the prices ruling throughout the world for a lib loaf, New Zealand has not got a dear loaf. On tho contrary, in comparison with most of the countries of the wheat-pro-ducing countries —we hove a cheap loaf. COSTS OF BAKING. “It is difficult from the mass of figures supplied, with wide variations, to analyse carefully the question of baking costs, but we know that one bakery in Dunedin, which baa been established 15 years, sells bread over the counter at 9jd per 41b loaf. Thero are no delivery charges there; of course it is a small bakery, with a limited output, and the owner is a working manager. We find that between the small country bakehouses and the big ones in the principal cities, which use elaborate machinery, there is a wide variation in costs, but it appears that in the 41b loaf, the value of the wheat is low than 4d, the balance of tho cost being accounted for by milling, baking unci delivery charges.

HIGH COST OF DELIVERY. “In considering delivery charges there are many aspects to bo borne in mind —• there are the delivery charges of bread to hospitals in large quantities, the costs of delivery of singlo loaves ovor the counter, delivery in the suburbs, delivery by motorcar or other means of transport to the backblocks. It was shown that in the cities, wholesale delivery costs range from id to Jd for a 21b loaf, and private rotail delivery costs in Dunedin, Christchurch, Auckland and Wellington vary from Id to 2d. Summarising tho whole of the evidence given before tho committoo, it has been shown that broad, cash over counter, averages Is for the 41b. loaf in tho four chief centres. The extra high prices of broad that we sometiinos hear quoted, will, in nearly every instance, be found to bo accounted for by the delivery charges. If tho public domantl fresh broad every morning, that it must be at the door bofore a oortaln time each day, that tho 21b loaf U to be transported for fivo, six, sovon or eight miles and delivers ed—-if tho public want elaborate, costly service—the public will have to pay for it. NO USE WORRYING THE FARMER.

“As to the investigation into tho prioos that the farmer gets for his wheat, it has been shown that ho h> not making an undue profit, and, turning to the subsequent costs, I do not say that the miller is making an undue profit, or that tho baker is making an unduo prufit, or that the man who delivers the broad is making an undue profit. I say. howovor, that it is along the lines of the costs after the wheat leavos tho farmer that inquiry has to bo directed in the future if people are going to keep on complaining about the high cost of bread in this country, It will bo apparent to honourable members, when tho ovidenee Is printed and they take the trouble to road it, that, when the

price of bread is above Is for tho 41b. loaf in New Zealand, the charges in excess are due largely to tho transport charges —on the wheat, the flour or in the final delivery of the finished product. So, when wheat that is being produced in Canterbury is carried to Auckland —where tho people find it more payable to produce lamb and butter than to produce wheat, although wheat can be grown well in the North Island; and, as a matter of fact, it was in tho North Island that the industry was commenced—it is only natural to expect that bread will be Id or 60 per loaf dearer in Aucklai*! than in Christchurch. That is the position throughout the Dominion; an examination of the question shows that, because of the transport charges, tho prico of bread goes above Is for the 41b. loaf in certain parts. WOULD NOT SAVE SIXPENCE A WEEK. “Then, consider tho trouble experienced by the bakers. Owing to the competition from other attractive foodstuffs there has been a decrease in the sale of bread; there is not as much bread consumed per head in New Zealand now as there was 10 years ago. Other attractive foodstuffs have caused a considerable decrease in the consumption of bread, and the bakers have had to try to improve their product. One firm in Wellington brought evidence to show that last year it spent £2OOO on milk alone for bread baking. I do not 6ay that that is evidence of similar expenditure generally throughout New Zealand. It is not. But generally the baker’s costs are increasing, while his output is at the same timo becoming less. If tho duty were taken off wheat and flour, there might be a decrease of Id in tho price of the 41b. loaf; it would not be more—it might bo less. Such a decrease might mean to tho average family a reduction in the cost of living of 6d per week. If we took tho whole of the duty off wheat and flour that action would not reduce tho cost of living of tho average family by more than 6d per week. However, there is ample evidence that the prico of broad in tho chief centres, cash over the counter, is not unduly high and that the higher prices payable are due to high transport costs is now common knowledge. It might bo that organisation for delivery of broad might reduce costs, but it is for the baking industry, not for tho Government, to ascertain whether a reduction can be made. SLIDING SCALE PROTECTS THE CONSUMER.

“In conclusion, the Government Statistician’s figures have demonstrated clearly that the sliding- scale has not increased the price of bread to the people of New Zealand. I believe it is competition that has decreased the price of bread in the chief contres in the last four months — price-cutting and competition among the bakers themselves —and that the sliding scale has kept prices stable. The prices of broad in Great Britain have in the past two months fluctuated violently, while the evidence taken by the committee Bhows distinctly that the sliding scale here has protected not only the grower, but also tho consumer. It lias been demonstrated beyond doubt that bread in New Zealand is one of the cheapest foodstuffs, and that the prico is not unduly high compared with that ruling in any of the other wheat-producing conutries of the world. The evidence shows that the price of bread throughout the world compared very unfavourably with the price of 2Jd for tho lib loaf in Dunedin, and 3fd in Auckland. In Germany the prices of the loaf to-day is in Guonos Ayres 3*)d, in Canada 44d, as against 5d in tho United States. As a matter of fact, the average in New Zealand is 3 per lb., or Is per 41b loaf. The secretary of the Industries and Commerce Department gave evidence that if his department had to fix the price of bread, they would fix it at Is for tho 41b. loaf.”