PRICE FIXATION

Manawatu Standard, Volume LV, Issue 258, 28 September 1935, Page 16

PRICE FIXATION

COMMERCIAL TRUSTS AMENDMENT. At the August meeting of the South Canterbury chamber of Commerce, a discussion took place in committee in regard to the Commercial Trusts Amendment Rill, but no decision was reached, further discussion being held over until the September meeting. When tlie matter came forward, the president (Mr G. H. Andrews) said that he did not think they could do anything; as the Rill was before Parliament. In any case, the Associated Chambers had the matter in hand. Mr J. Norrie asked if the Rill had actually come before Parliament. The Associated Chambers had taken evidence, but they had taken it from one side only. He was particularly interested in the matter, because if the Rill went through he would be affected in his business. Mr Norrie mentioned that in 1927 what was known as the P.A.T.A. (Proprietary Article Traders’ Association) came into being, their idea being to control the price of proprietary lines and foodstuifs. Evidence was taken, and the outcome was that the P.A.T.A., was not allowed to operate. Manufacturers had not been allowed to fix the price of foodstuffs, bub the proposed amendment would enable them to do so. The price of price fixation would be detrimental to cash and carry businesses, because their sales would drop considerably. The cash and carry firms had been called price-cutters, but he could prove that the other firms were the cutters. He mentioned one particular line which was one of the best sellers in New Zealand. The manufacturers had a method of sending goods on consignment, and even if he was prepared to pay cash, he could not go and demand the goods, because, they . belonged to tile manufacturer. These goods cost 3s ia dozen tins, plus tax, and with the 'discount it worked out ab 13s 4d a dozen. The retail price was Is 4d a tin, which left the storekeeper a profit of 16 2-3 per cent, on turnover. The average overhead in the service store worked out at 15 per cent, so they were not left with very much of a margin. The average overhead or the cash and carry store ranged between 6 and 7} per cent. , They had to sell the particular line at i Is 4d so they could make a good margin 1 of profit. Therefore blie cash and carry man ivas not the cutter but the othei j man. Mr Norrie said he was against : selling at cost price. He was of the: opinion that it would be better for the, Government to bring down a system j which would prohibit a man sellnng below a certain margin of jirofit. The As-j sociated Chambers had issued literatuie j on the subject, but he- thought lie was justified in making some form of protest. The manufacturers themselves were to blame to a large extent lor the price-cutting that went on to-day. I Mr G. D. Virtue said that lie had to correct Mr Norrie when he said that The Associated Chambers had rushed into the matter. The matter had been | under review for the last three years. \ aliens m.eetings had been held, and 'reports had come before the chamber, and they had passively agreed to them. He appreciated Mr Norrie s position, but in view of the fact that the Associated Chambers had been dealing with the matter for three years, he did not think they could be charged with having rushed into it. , . Mr Nome: What I say is that they have only taken evidence from interested parties. . . The president: Have you evidence ol that? . Mr Norrie: I am only going on the pronouncements they have made. It was eventually agreed that Mi Norrie and the secretary should draw up a report to be ionvarded to the As 'sociated Chambers.