Department’s Reply to N.A. Dairy Conference Fertiliser Report

Northern Advocate, 13 December 1937, Page 3

Department’s Reply to N.A. Dairy Conference Fertiliser Report

A REPLY TO ALLEGATIONS MADE IN A REPORT TO THE NORTH AUCKLAND DAIRY CONFERENCE LAST MONTH BY DELEGATES WHO ATTENDED A MEETING VVJfH TWO OFFICERS OF THE DEPARTMENT OF INDUSTRIES AND COMMERCE TO DISCUSS THE COSTS OF THE PRODUCTION OF SUPERPHOSPATES HAS BEEN PREPARED BY THE SECRETARY OF THE DEPARTMENT.

It Is stated that the report was not a fair comment on the interview which took place, and gave a wrong impression of the attitude and the spirit in which the meeting was convened and conducted.

The departmental report goes on:

“At a meeting of the North Auckland Dairy Conference, held in Whangarei in October, at which the Fertiliser Committee of the Bureau of Industry was present, an invitation was given for representatives of the conference to meet officers of the department and examine the estimated costs of production of superphosphate at Whangaroi.

“It was thought that this would bo a better moans of reaching an intelligent understanding of the position, rather than by reading schedules to a large conference.

“There was never any suggestion that the department was inviting an investigation of costs and accounts of existing companies, which may have beer used as a basis for calculating the price incorporated in the proposed plan.

“Wrong Impression

“The North Auckland Dairy Conference representatives were apparently under the impression that they were both empowered and invited to investigate the cost calculations of the department’s officers and to examine the confidential information collected by the department from the manufacturers. This was obviously impossible and was never intended, as the department's information was obtained under the Board of Trade Act, and such information is absolutely confidential unless published in the public interest by order of the Minister. “The department’s officers stated at the conference their estimates of the costs of production of superphosphate at Whangarei and. following the meeting, these figures were confirmed in writing. “The officers went to Auckland to compare the department’s estimate of the cost of production at the Whangarei works with the estimates of the dairy conference, but il was noticed that the representatives of the conference had no detailed estimates of the cost of production at the proposed works, and they placed the department’s officers in a most awkward position, by asking them to confirm or refute the costs of an existing company, with winch the directors of the Whangarei company were closely connected.

Confidential Information

“The Bureau of Industry had obtained detailed estimates of costs from the proposed operating company and had compared them with the costs of other works. The bureau did not agree in some details with the operating company’s estimated costs for the Whangarei works and had drawn up their own estimates, based on actual costs of other works, after making due allowance for geographical and other advantages which may be reasonably expected to effect a reduction in the costs of the proposed works at Whangarei.

“It will be seen, therefore, that the representatives of the conference were not In a position to discuss details of their own costs and, having refused to accept the department’s estimates based on average costs of existing works, they requested details of the actual costs of certain companies operating in the Dominion. Obviously, such confidential information could not be revealed. “Such remarks as ‘our demands for specific figures.’ ‘endeavou'r to extract even at pressure,’ ‘admitted under pressure,’ ‘our demands for information 4 ' and ‘intensified cross-examin-ation’ indicate the attitude of the conference representatives in accepting a friendly gesture by the department and also emphasise the steadfastness with which the department’s ■ officers refused to divulge confidential information secured under the Board of Trade Act. Distributors’ List Question

“We would also like to refer to the comments made regarding the question of the dairy companies being placed on the distributors’ list and given the same commission as merchants. The department had no knowledge that its officers were 10 be crossexamined on this question. When the matter was*raised at the meeting, we informally outlined the case for and against the proposal, as put before the bureau on November 9 by representatives of both parties. “As the representatives of the dairy conference were well aware of their own side of the case, naturally the matter most discussed was the case put up by the merchants, but this was dene most informally after the real business of the meeting was disposed of.

“The only explanation which wo can give of the paragraph in the newspaper report, reading ‘it was clearly indicated that dairy companies would not be placed on the distributors’ list and no increase as to selling commission could be expected,’ is that, apparently. representatives of the conference have taken the outline of the case put forward by the merchants as being the considered opinion of the Government.

“The statement quoted above is definitely incorrect, as the matter of the amount of the commission to be allowed to the dairy companies on Ihe sale of superphosphate is still under investigation, and no decision has yet been made.

Australian Prices

“It is also necessary to correct a statement regarding the manufacture of superphosphate in Australia. The article stales ‘the bureau advised , . .

that Hie cooperative . works f in Australia! had failed In make adequate provision for drprecial ion and replacements,’ and, inter, ’it was, thereIV.re, contended by the bureau that the Australian selling price was not based on sound business practice.’ ‘’The department had voluntarily offered to n representative of the conference all the information it could make available regarding costs of production in Australia in connection with depreciation “The actual statement made was: ’The policy of the company has been criticised by competitors in (he trade who assert that insufficient allowance has been made for depreciation and obsolescence, but I have no evidence to confirm or disprove this criticism,’

J “It is evident that the bureau did 1 not endorse this criticism and there is no justification tor the statements in I this matter published in the report of the roprosenialives. of the dairy con-

ference. “It should also be pointed out that the representatives of the dairy cornpanics have consistently throughout tlie report referred to the ‘bureau’ as having certain opinions or having made certain statements. The representatives of the conference did net discuss these matters with the bureau but with two officers of the Department of Industries and Commerce.”