NELSON TOBACCO COMPANY

Nelson Evening Mail, Volume LXXII, 22 December 1938, Page 3

NELSON TOBACCO COMPANY

j EFFECT OF EXCISE DUTIES II IjIiI'KKENCE TO OKCI.INK IN industry s annual meeting of ll SHAREHOLDERS If The annual meeting of the Nelson Tobacco Company, Ltd.-, was held at •♦ the Nelson Institute on Saturday last U and was presided over by the chairman I; of the company, Dr S. A. Gibbs. The annual report was as follows: *X "In common with the other tobacco \j ! companies operating in New Zealand •* the Nelson Tobacco Company has ex- •; perienced an extremely trying and *♦ anxious year. Costs have soared in i; all directions, .but the competition of i the imported article .manufactured unit dor much less harassing conditions, has \i prevented us from increasing our p\ces It jso as to meet the increased costs. f| Under these circumstances it has simply »; been impossible to carry on our busies ness profitably. To a large extent we it have merely marked time and conseril! ved our stocks while anxiously hoping [1 1 that the Government would fulfil its |* I avowed intention to assist the local in»i! dustry. [I. "It is now six years since the Labour j Party through its leader, the present |f| Prime Minister, declared in Parliament [f! that its policy was to make the tobacco || | industry in New Zealand free from ►♦ excise duty. All other British Domin- |* 1 ions which produce tobacco have found ►♦ j it necessary to promote the industry by ;| j a remission of excise duties and a || readjustment of tariffs. The decline |$ of the industry in New Zealand is || shown by the fact that there were it fewer growers of tobacco and fewer || acres used for the crop this year than ►J in the previous year. Despite the Gov’f ernment's assistance in providing a re- •| search station and conditioning sheds. H it .would appear that the industry in [i tliis country is doomed to extinction ;♦ unless the Government will translate || its words into actions before it is too If late a | "Should the Government, within the £ next few months give the industry the encouragement it is entitled to expect, f| we may yet retrieve our position. ;; Otherwise not only our company, but tt the whole tobacco industry. both It growers and manufacturers, will probt| ably soon be extinguished—a strange commentary on the Government's dell dared desire to see a great expansion of all local industries. >| "We are glad to say that our brand •♦ of cigarettes, Ben Hur. has met with |f great favour and is now meeting with >| increased sales. We can siill claim that \t our company is the only one that is ;| putting out tobaccos and cigarettes || which are of first class quality and 5 which are made entirely from New Zealand grown leaf. "During the year Messrs Macdonald. McKenzie and van Staveren retired from the directorate and Dr S. A. Gibbs 1 and Mr B. Trathen, both former direci tors, were co-opted to the Board in place of the two latter. Dr Gibbs and Mr Rogers retire by rotation, but are eligible and offer themselves for reelection. ! "Owing to the retirement of our : former auditor, Mr P. S. Boyes, it will be necessary to make some other appointment for the coming year. Messrs Vercoe and Gilbert have been, nominated to fill the vacancy,” CHAIRMAN’S COMMENT In moving the adoption of the report I and balance sheet, the chairman said that the position of the industry and the prospects of the company were very much the same as when he headed a deputation to the Hon. D. Sullivan j nine months ago. He had then been l authorised to tell the Minister, not only on behalf of the smaller companies but also of the bigger companies manufacturing in New Zea- . land, that unless the Government soon carried out its promise to give j effective assistance to the industry, the ; manufacture of tobacco from New Zealand grown leaf would undoubtedly { cease altogether. He had pointed out ! that the Governments of all the other ! tobacco growing countries in the Bri--1 tish Empire had found it imperative to foster the industry by various systems , of tariffs which the speaker explained in detail. In New Zealand alone, however, in strange contrast with the other Dominions, a heavy excise duty i of 4s 6d per lb had ben imposed sev- | eral years ago and had been a serious I handicap and discouragement to the inj dustry. All the Ministers approached i during the past year, the Hon. R. ■ Semple, the Hon. D. Sullivan and the | Hon. W. Nash, had in words expressed j great sympathy with those engaged in i the industry, but so far as actions went. I they had merely established a research | station and built conditioning sheds. The vital question of tariffs had not ! been touched. Although the Government had now been in office more than ! three years, the policy so ably advocated by the present Prime Minister in November 1932 of freeing the locally grown leaf from all excise duly seemed to have been forgotten. Meanwhile | tobacco growing was in process of decline and the numbers’ of growers

and of acres in crop were diminishing. An industry of great importance to New Zealand and especially to Nelson was thus seriously threatened. In view of the steadily rising costs and the reduction of profits to a vanishing point, the directors* had decided that it was useless to push on vigorously with the m anu fact re and sale of their products, until the Government’s policy with respect to the industry was announced, as the only result would be still greater loss and the depletion of the valualbe slocks of. matured leaf. But preparations had been made to take immediate advantage of the hopedfor action on the part of the Government. Every possible avenue had been explored and contacts had been established that might, be of great value later on. Above all, an excellent brand of cigarettes, the Ben Hur, had been put on the market and had met with a mos^ favourable reception from the public. The Nelson Tobacco Company was the only company that was manufacturing first class tobaccos and cigarettes solely and entirely from New Zealand grown leaf without the admixture of any imported leaf vvhatAfter a very interesting discussion by the shareholders present, the report c r'd balance sheet were adopted. Dr Gibbs. Messrs W. Rogers and A. Lcggatt were elected directors and Messrs Vercoe and Gilbert were ap-

pointed auditors. In replying to a vote of thanks to the stair, the secretary, Mr Hodgson, said he had never known a body of directors give so much time and attention to the business of a company as did J the directors of the Nelson Tobacco j Company.