LOCAL BUTTER PRICES.

New Zealand Herald, Volume LXII, Issue 18948, 20 February 1925, Page 10

LOCAL BUTTER PRICES.

—.—_. ■ . i PROPOSED COMMITTEE. MR. GOODFELLOW'S ATTITUDE "LONDON PARITY" FICTITIOUS. NO ASSOCIATION WITH SCHEME. [BY TELEGIUI'II. —OWN CORRESPONDENT.] HAMILTON. Thursday. The proposal, announced by Mr. 11. R. Hogg, chairman of the Opotiki Dairy Association, to establish a committee of cooperative arid proprietary interests to regulate the local price of butter, was discussed to-day by Mr. W. Good fellow, managing director of the New Zealand Cooperative Company. He declared that " his company had no intention of allowing itself to be drawn into any association to obtain fictitious values for dairy produce." " The New Zealand Co-operative Dairy Company had sufficient experience of butter committees in the past to last for a long time," said Mr. Goodfellow. "We found before that prices were at times fixed above London parity, and while we loyally observed those prices competitors gave concessions, with the result that they secured temporarily a considerable proportion of our business, We then had no alternative but to hold prices down to recover lost ground. Self-preservation is the first lav/ of nature, and my directors will not repeat the experience. Relative Values of City Trade. " Our city business is larger than that of all our competitors put together, but our Auckland local sales represent less than 10 per cent, of our manufacture of approximately 23,000 tons of butter a year. The city turnover of our Opotiki friends is probably less than a quarter of our local sales, yet they have said that two-thirds of their total make _ is sold locally; this larger proportion being due, of, course, to their relatively small output. Obviously it would be greatly to their advantage if they could hold the local market well above the equivalent export value, and thereby obtain _ a better return than exporting factories. Their scheme of regulating local prices by the High Commissioner's weekly cable, instead of by the actual value of the produce, sounds excellent in theory, but it will bo found quite unworkable in. practice, and certainly will riot be in the interests of co-operative dairy companies. Jt will tend to increase speculation to the disadvantage of both the consumer and the producer. /Sale Price the Test. "There is only one way of arriving at the Value of any commodity, and tha*. is to take the price at which it can be sold," said Mr. Goodfellow. "Obviously the f.o.b. value must fix the local price, unless all producing interests are in agreement. Although tho New Zealand Co-operative Dairy Company consigns the major portion of its produce to the United Kingdom, it does quite extensive business with at least 15 other distinct markets on a cash f.o.b. basis in the Pacific, Australia and throughout the Orient. We are therefore in almost daily touch with all the important markets of the world, and we have no difficulty in fixing the actual value of any butter sold locally. The idea of abandoning this basis and working on the High Commissioner's cable from sve«k to week is a ridiculous proposal and is contrary to all business principles. Itignores the factors of time and transport which are vital in all merchandising, and endeavours to impose the value of butter to-day in London as the value to-day in Auckland, two very different things. The policy of the New Zealand Co-operative Dairy Company is to maintain a regular supply to th'e local market the year round at a figure at least equal to the export value,' and that policy carmot be varied. The Auckland Conference. * < "Mr. Hogg makes complaint ihajfc no constructive policy was put before the conference of directors held recently between the Opotiki and the New Zealand Dairy Companies. It was not our intention to bring forward any policy, constructive or otherwise; our sole object in meeting their directors was to show them that their statement that we were endeavouring to 'squeeze' Opotiki butter off the market was without foundation. As a matter of fact we have, in the past, repeatedly helped to keep it on the market by wrapping and packing Anchor butter in Opotiki labels in winter months, and at a nominal cost to help them out. As a result of the frank talk which took place at that conference, we believe the Opotiki directors are now more conversant with the true position. Mr. Hogg's further complaint about discounts is unjustified. We have had no arrangements with them regarding the fixing of prices or discounts. We arc absolutely free, and quite within our rights in taking the action we did. We have never made it a practice to discuss the details of our business with them; but as a matter of courtesy we have always informed them prior to any change in our prices, so as to give them an equal and early opportunity of advising their customers. " The relations between the two companies until the recent departure by the Opotiki Company have been of a cordial nature. They have always been treated by us with every consideration and considerable generosity. Mr. Hogg's recent statement in the press came as an unpleasant surprise. At the conclusion of the recent conference, at which several directors of both companies were present, it was unanimously decided not to publish a report of the meeting in the press. Mr. Hogg's one-sided statement of the position is therefore nothing short of a breach of confidence. " Finally," said Mr. Goodfellow, " I would like to say that we have already indicated to the co-operative companies in the province that at any time we are quite prepared to entertain any fair and equitable scheme for the regulation of supplies and prices in connection with the Auckland butter market, provided such committee is controlled by co-opera-tive factories. From past, experience ws know that any combination as suggested can only result to the disadvantage of the. producer."