Kaitaia Suppliers Discuss Extension Of Trading Operations

Northern Advocate, 9 August 1938, Page 9

Kaitaia Suppliers Discuss Extension Of Trading Operations

IN THAT SECTION OF HIS REPORT DEALING WITH THE TRADING 1 DEPARTMENT, MR E. R. BIRD STATED. AT THE ANNUAL MEETING OF THE SUPPLIERS TO THE KAIIAIA DAIRY FACTORY, THAT THE TOTAL TRADING TURNOVER WAS £37,141, COMPARED WITH £29,121 IN THE PREVIOUS YEAR. The present capital reserve of the trading department now stood at £lllO. to which must be added £l5O to be transferred from the current year’s surplus. The increased business had necessitated additions to the existing storeroom and estimates of cost were now being prepared. The directors recommended that the work be proceeded with.

Continuing, the chairman said the inauguration of the ice cream department has been more than justified by the excellent results obtained during the first two years of its operation. In addition to the profit of £498 2s 2d shown in the accounts, there is an additional profit of £SO in the sale of cream to the department. The nett profit represents a return on capital invested of 29.07 per cent.

Fertiliser Account: A further increase in business was recorded by this department during the year and the reserve account, which now stands at £1989 7s 9d, was increased by £484 5s 9d. Extension Discussed. Mr Marsh said that some suppliers thought the company had not gone far enough, and others thought they were going too far. Their scope was limited by the arrangement made with the business people of Kaitaia on the question of shipping. They had given an undertaking to confine their trading to certain farmers’ linos. They would have noticed how well Kaitaia was provided with shops, but these businesses could not succeed to the same extent if competition from the dairy company had to be met in a wider field. When complaints had been received about the quality of goods, every endeavour had been made to remove the cause. The expenses had gone up very considerably. An additional clerk had been engaged so as to ensure the satisfactory delivery of goods. The turnover had increased by 50 per cent, and the expenses by roughly 30 per cent.

The chairman said the agreement with the business people would expire in 1942.

Mr Lamb said he would like to voice his appreciation of the trading department. He was not concerned about building up businesses in Kaitaia if farmers could deal better through their own trading department.

Mr O. Fisher said he favoured the trading department very much, but its usefulness was limited by the agreement entered into. The touch stone of the company's scheme was: could it supply goods at Auckland prices, plus freight?

Mr Dawson moved: “That' the tiftie has arrived when the scope of the trading department should be considerably extended, thereby enabling the company to engage in general trading and that it be an instruction to the directors to make the necessary arrangements at the earliest possible date.” Value of Co-operation. They had, Mr Dawson said, realised the value of co-operative selling, and surely they could get the same advantages from co-operative buying. They had an organisation, and why not make use of it? It would take some time before all the machinery could be put into operation, but there should be no delay in making a start. He was not suggesting that they should become general storekeepers, but many farmers were finding it hard to make both ends meet. Some said this was due to rates, others to interest, while others complained of their store bills. If the company had a trading department the bills would not disappear, but the farmers would get all the profit from the trading, which would be returned to suppliers. The storekeepers gave very good service. but the dairy farmers were more interested in their own welfare than the storekeepers. With their own trading department there would be no bad debts. What of Gentleman’s Agreement? The chairman: Does your resolution ignore the gentleman’s agreement with the business people? Mr Dawson: I want to leave it to the directors.

Mr Champion seconded. Mr W. Rose said il was hardly fair to ask the directors to break their word of honour. Anyone who did that would be looked upon in future with suspicion. By the gentleman's agreement the district had been saved £20,000 a year. To get the reduction in freights they had to get the support of the business people and to break the agreement would mean open warfare.

Mr A. Wilkinson: How many of the business people who were a party to the agreement are in business today?

Mr Michic: Most of them. He would be very sorry to see the gentleman's agreement varied, though Mr Dawson’s case would make a popular appeal. They had been glad to have the assistance of the business people at the time, and a saving of 15/- per ton in freights had been made. The need for the existing .agreement was as great today as formerly. The company's trading would have to be enormous to counteract the effect of mcreased freight rates. A Retrospective Glance. Mr Stewart; Was not household trading tried years ago'.’ If he remembered rightly, there were bad debts, and some wanted to purchase goods to the value of two or three times their output. The secretary; No question about that.

The chairman; It Mr Dawson means at the end of the present agreement. I am with him, but I don't want the motion in its present form on the books. The motion, was lost. Mr O. Fisher moved, and Mr Prcbicevich seconded, "that when the time comes for reviewing the present agreement in 1942 it be a recommendation to the directors that before any action is taken the matter be brought before the suppliers.” The motion w.as carried.