A WARNING.

Manawatu Times, Volume XLIII, Issue 1586, 11 June 1920, Page 5

A WARNING.

THE OR.JECTS OF THE C.W.S. ' ' _______ ' IS IT A COMBINE? Sirj it is understood that there is a meeting in Wangamii to-day to discuss the proposals of the Co-operative Wholesale Society of England regarding the marketing of New Zealand dairy produce in London, a few salient points av<3 set out below in order that questions may be asked which will throw mo?'« light upon the wliole scheme tha-si has hitherto been possible. In the first place, it is- staled that the C.W.S. are to get the first refusal of all the New Zealand produce. Can those interested in the daJ-ry industry believe that mes who have handled the produce in tß»e past will- be content to stand aside and take only what the C.W.S. do not Tvant? It is true that the C.W.Sv is a cooperative society, but the object of its co-operation is diametrically opposed to that of the prod veers' co>-opera-fcion. The C.W.S. co-opera-ies to sell for the Jowest price. The producer co-operates to seli. for the highest price. Between two such divergent aims ihere can be no more co-opera.ioo than there is between oil and water. Summarising the position, NO MANCAIST SERVE TWO MASTERS. WHAT HAS COMPETITION MEAN'.T IN THE PAST?

The president of the Farmers' Unirmt asserted in congress last week- that "competition is the soul of trade," Competition in the past has built-up a method of trading and handling of New Zealand butter and cheese which stands to-day as a scientific organisation throughout the whole of Great Britain, distributing New Zealand produce, stortng same, financing it,... extending credit to retail buyers, and fostering the market. It has created and maintained a persistent demand for New Zealand produce throughout the United Kingdom, especially in the Midlands and the South of England, the east and west of England—so much so that it has practically driven Danish butter out of the market. In a depressed or flooded market every effort is made to nurse the market. What would the C.W.S. do under the same circumstances? If they are consistent to their own aims and objects it would be their bounden duty to allow the market to take its natural downward course in hopes of obtaining cheaper supplies. ESTABLISHED MARKETS.

This vast organisation of the many great firms in the butter and cheese trade that hitherto have handled New Zealand dairy produce possesses in the aggregate far greater financial resources and strength than the C.W.S. They have perfected their system of distribution and finance by experience and through competition. Competition amongst such houses is such that the New Zealand producing factories get the benefit of same in economies and savings in handling their produce. FINANCE.

It is known and admitted by the dairymen that they want all thenfinance for the work of their farms; that they want the highest amount per pound on butter fat paid to them every month that is possible. They have had this in the past, but under a scheme where they are to find oO per cent, of the money to finance thenproduce, they must be short of money throughout the season for their dairy work. How different this would be from the system in the past, where from their exporting agent they have been able to get anything from 80 per cent, to 90 per cent, of the value of the produce when it was shipped, and whenever they wanted it they were able to get reasonable advances against produce in store. The same financial facilities will undoubtedly be available in the future. The dairy farmers may think that as the ultimate finding of the money is by the bank, they can work the business direct with the bank, but the point to remember is that in the past the London and New Zealand merchants have put up credits and the banks have had far more security behind the advances than the actual dairy produce. Can you imagine our bankers making full advances on New Zealand dairy produce amounting to something like a million pounds per month to a company with a nominal capital of £IOO,000 (only a small amount of which will be called up) when a fall in the market price of ten per cent, would wipe out the whole capital in one month's shipment? "HOME" TRUTHS.

The C.W.S. is established in Ireland. It is interested in some butter and cheese factories, which it is understood they own and run themselves. There are a large number of cooperative butter and cheese factories in Ireland worked on the same lines as those in New Zealand. There is a large central institution like the National Dairy Association in connection with these co-operative factories. The question naturally arises, why do not these co-operative dairies in Ireland join hands with the C.W.S. and entrust them with the sale of their butter and cheese instead of sending - it to the existing old-established organised distributors? These co-operative factories in Ireland know the exact state of affairs. Thev know all about the C.W.S. Why do they not use them if it is such a good organisation? Why not let the New Zealand producers write and ascertain more about this organisation before they tie themselves up to a practically unknown body, especially as the objects and interests are entirely opposed to theirs? It is also well known that in England the C.W.S. have endeavoured to work with the English farmers, but, just the same as in Ireland, they have not been accepted. In fact, they have had to buy and run their own farms in competition with the English farmer in order to secure supplies for their own shops. They now come to New Zealand and offer to take under their wing the New Zealand farmers and do so excellently for them. What is the reason? They cannot secure Knglish and Irish produce at their own price. They have also been unable to make any arrangements in Denmark <such as is suggested for the New Zealand produce. They have had to buy their supplies of Danish butter in the ordinary way, and this in spite of the fact that their chief influence is in territories where the Danish butter is in groat demand and specially preferred. At the present time it does not suit them to continue purchasing Yew Zealand butter in the same way, but they wish to practically buy it direct, so as to eliminate competition nnd secure supplies at better rates for their consumers.

This is confirmed by an incident same years ago when a well-known New Zealand dairy produce representative approached the C.W.S. with a view of disposing of New Zealand butter and cheese on commission, thinking (hat the C.W.S. would be an excellent avenue for obtaining good returns for the New Zealand producer. His enquiries were met with the reply: "Your proposal is no use to us. You desire to secure the highest price you cati for your produce, while we

must buy in the very cheapest markets."

It is also known that the C.W.S, did business ■with* firms in Xew Zealand some years ago, and it is significant that they were not able to retain the business in subsequent years against competing firms. Producers are asked : the following question:—"Whether they would entertain for five minutes- such a proposal: coming from one of the old-estaM-fshed distributing; houses in Lonrtow?"

It vrouM be far more reasonable to give it (Ui> such a house tha,h : to give it' tp the C.W.S., because they, the distributing house, would not have a chance of securing the produce a second year W they did not show the highest possible returns, whereas the C.W.S. is ptod'ged to sell at lowest price possible.-

WHAT IS'THE ULTIMATE? 3 OBJECT? jj Does not th.r whole scheme savour Jkwt a combine? It is significant? that the committee stt'up by the prodtacexs jfcas consistently striven with the Government for s> free market vrith competition, and yet' at the same tlm<» the National Dairy Association is asking producers not to make any arrangements pending the proposals of the C.W.S. In other words, tie- Glamour is Oarfree miarkets, and it is now proposed to enter into a close combine with this society whose avowed object, according to its constitution, is to sell at lowest prices. Wha£ will be the ultimate result? The creation of a trust and monopoly which i& known to be tlie object of , other societies that are associated -with the ir.W.S. In shoit; in seeking -decontrol' on the one harid, the pro■duce would pass into a completely controlled' market.*