Serious Drop In Fruit, Produce Profits

Northern Advocate, 6 May 1949, Page 3

Serious Drop In Fruit, Produce Profits

WELLINGTON, Fri. (P.A.) The main issue between the Price Control Division and the fruit and produce merchants was the question of the correct method of calculating the percentage of net profit earned by the merchants. Mr H. M. Rogerson, counsel for ihe New Zealand Fruit and Produce Merchants and Auctioneers’ Federation, said this yesterday at a sitting of the Price Tribunal. The tribunal was considering an application by the Price Control Division for a reduction in the commission charges made by fruit and produce auctioneers on fruit handled for the Marketing Division. Mr Rogerson said that the Director of Price Control (Mr H. L. Wise) had submitted that the industry should accept a reduced profit on a tax-free return of 7 per cent. Tffg industry and expert witnesses considered that the correct figure was 4.88 per cent. INDUSTRY UNECONOMIC There had been a serious and steady fall in profits in the industry from 1939 to 1948, and the position would be made worse by the increase in wages under the Arbitration Court’s pronouncement unless some relief were obtained. The overall position of the industry was now uneconomic, and any further deterioration in the financial returns would necessitate a reduction in the service to the public “Most of the firms engaged in the wholesale fruit and vegetable business over the last 50 years have made a failure,” said Mr Harvey Turner, of Auckland, giving evidence. “Not less than 40 have been in and out of business in Auckland during my time. “Perhaps that is why the Price Control Division call us brokers.” DECISION RESERVED If the Price Tribunal made any reduction, Mr Turner said, his firm would have to close down, or sell out to the Government. He was confident that the Government could not run it under 12k to 15 per cent commission, or reduce the service to producers by selling in bulk supplies. If the last-mentioned course were taken it would eliminate sales to small retailers, hotels, boardinghouses and the public. Another middleman, a jobber, would be established who would buy in bulk and resell. Without this middleman the New Zealand wholesale system was regarded today by overseas experts as the most economic in the English-speaking world. The tribunal reserved its decision.