FIXATION OF PRICES.

New Zealand Herald, Volume LXI, Issue 18657, 13 March 1924, Page 9

FIXATION OF PRICES.

ATTITUDE OF GOVERNMENT. RELUCTANT TO INTERFERE. COMPETITION CIRCUMSCRIBED. The desirability of fixing prices of goods by manufacturers, wholesalers, and retailers to end the practice of " cutting " has beeiii considered from several aspects by delegates to the New Zealand Master Grocers' Federation. The official view, particularly with regard to fixing manufacturers' prices, was yesterday placed before the conference by the secretary of the Department of Industries and Commerce, Mr. J. W. Collins. Mr. J. W. Winfield, of Taranaki, presided. Local manufacturers, said Mr. Collins, claimed that they were at a disadvantage as compared, with oversea competitors in the matter of price control, as manufacturers 'beyond the jurisdiction of New Zealand could cut off the supply of goods to any local distributor who failed to observe a scheduled price. The result was that many dealers prefered -to handle imported lines that were not subjected to price cutting. The Commercial Trusts Act of 1910 now applied to . _ any article of food for human consumption and ingredients used in" the manufacture of any such article, and in addition it covered agricultural implements, coal, petroleum or other mineral oil and tobacco, including cigars and cigarettes. If the manufacturers entered into' an arrangement with other persons, whether wholesalers or retailers, for ; the fixation of the price of such goods, either by arrangement to supply subject to the observance of certain conditions in regard to prices, or by refusing to deal in consequence of the non-qbservance of those conditions, the Act made such arrangement an offence.

" So far as assistance from the department is concerned," said Mr. Collins, " while it has in certain cases fixed maximum prices, the department has invariably lnft the adjustment of minimum prices to free competition. The public are definitely opposed to any interference with free competition, and it is the desire of the department to interfere as little as possible with trade. On the other hand, it is abundantly evident that the tendency toward price maintenance and the restriction of competition by various firms and trade associations is a grave factor in our commercial life.

"The operation of the so-called law of supply and demand is to an increasing extent conditioned, and set aside, by the co-ordinated action of manufacturers and

traders, and while the benefits arising from the formation and operation of combines and trade associations are of great economic importance, thq necessity for official supervision and safeguards against the abuse of monopolistic powers increases as free competition loses its force. 1 admit at once that if business conditions necessitate or make economically advisable the fixation of prices by any organised body, then it is necessary that such fixation should be subject to' Government supervision 'to safeguard the interests of consumers.". ■ . *.. • . . ■ "

How "Cutting" affected a line of goods was explained by. Mr. Collins. Such goods were usually ' "proprietary lines," the quality and price of which were widely known. Any lowering of price was quickly appreciated by the public, hut the effect on the line was to make retailers handle it half-heartedly,- offer substitutes, or cease to stock it, so that the loss in hnndline it mitrht be as small as possible. The effect on the manufacturer was obvious.

A keen discussion followed, which was joined by several manufacturers and Messrs. J. A. C. .A Hum and J. Findlay, ofethe Industrial Corporation. , s it was agreed to urge upon the Government the absolute necessity, in the interests of fair trading, of allowing manufacturers to fix prices, with the right to refuse to supply dealers , unless such ' prices were observed; the public interest to be safeguarded by such prices being subject to the approval , of the Department. of Industries and Commerce. The conference decided to instruct its executive to arrange for a conference with" ■ the Industrial Corporation and wholesale distribu tors with a view to joint action in gaining the end indicated in the resolution.