CONTROL BOARD DISPUTE

New Zealand Herald, Volume LXV, Issue 19960, 31 May 1928, Page 14

CONTROL BOARD DISPUTE

Sffiß, GOODFELLOW'S ACTION SUPPORT FROM COMPANY. CO-OPERATIVE MARKETING. SCOPE FOR ITS EXPANSION. " Af - 'JfSY TELEGRAPH. —OWN CORRESPONDENT. J HAMILTON. Wednesday. The controversy regarding the affairs of' the Dairy Control Board, which has developed since the resignation from the "board last week of Mr. W. Goodfellow, managing director of the New Zealand Co-operative Dairy Company, was considered at a meeting of the board of directors of the company yesterday. As a result a resolution was passed endorsing the statement already supplied to the press by Mr. Goodfellow concerning his difference with .Mr. W. Grounds, chairman of the Control Board, and appointing Mr. H H. Sterling and Mr. Dynes Fulton as ft committee to draw lip a statement for publication, setting out the position from the point of view of the directors of the New Zealand Co-operative Dairy Company. Mr. Fulton, in a stalemen'. made to-day, said that Mr. Goodfellow had always been very careful to keq> the company's 'directors very fully informed regarding Control Board matters, and more recently lie himself had also been a member of the board. s The directors of the New Zealand Co-operative Dairy Company would like the dairy farmers of New Zealand to know that in their opinion Mr. Goodfellow's statement was a fair and accurate one. There was no use disguising the fact that the directors and the company's suppliers generally, were now very dissatisfied with the Control Board, which they considered was not only very costly, but also of little value to the industry, as at present functioning- " Distortion o 1 Facts." Mr. Fulton said Mr. Grounds' st?'cements in the Exporter had been seriously questioned in the past by several of the Control Board members, and for that Reason., some months ago, a small committee was appointed to review the official monthly report. However, owing to Mr. : {Grounds' emphatic objection, this supervision did not include the chairman s published statements. In. the, last issue of the Exporter, Mr. Grounds had quoted an extract from the •Articles of Amalgamated Dairies, Limited, and in doing so he had omitted the latter part of the clause, which contained an all-important proviso, as follows: —"Provided that, in the case of (contracts or arrangements other than the ■ contract referred to in Clause 3 (!) (New Zealand Co-operative Dairy Company's contract) of the memorandum of associaor J.ny modification or alteration thereof, tire precise nature of the interest of the director in such contract or arrangement be declared to the board at the time the same is entered into." Ihis !d stortion of facts by Mr. Grounds was jto be regretted. Partnership Arrangement. It was only after the Control Board had failed in Us major objective that the New Zealand"Co-operative Dairy Company formed Amalgamated Dairies, Limited. Prior to that- date, the company had given 100 per cent, support to the board and its policy of absolute control. By means of a very satisfactory agreement, the New Zealand Co-operative Dairy Company had now permanently secured the services of the two most experienced men available in the dairy industry, who otherwise would have drifted off info other occupations; as a result of the control fiasco. Both these gentlemen had left no stone unturned in their efforts to make the national scheme of marketing an unqualified success, and were still convinced of the soundness of the original proposals. Amalgamated Dairies was a partnership arrangement between the dairy company and "Messrs. Goodfellow and iWright, and could not be dominated by either side, but couH be terminated by either side, if unsatisfactory. The scheme .was strictly co-operative in principle, and the various agreements with the New Zealand Co-operative Dairy Company and associated companies afforded an absolute guarantee of service on a commission jbasis and the fullest possible protection. It further definitely excluded the right to private trade in New Zealand dairy produce, either in this country or elsewhere. Both service agreements contained the clause: —"Shall not during his * jßngagcment hereunder buy or sell on his jown behalf New Zealand dairy produce Or any other goods in which the company is trading." Details of Other Clauses. The New Zealand Dairy Company's (agreement with Amalgamated Dairies contained the following clause: —"The now company (Amalgamated Dairies, Limited)-, agrees during the original or any extended period covered by this agreement that it will not, except in accordance with the powers conferred upon it by this agreement, acquire, buy, sell, deal in, or otherwise dispose of, whether directly or indirectly, any of the products or by-products from time to time manufactured by the dairy company or by its subsidiary companies." The printed agreement made by Amalgamated Dairies with other co-opera-tive companies contained a clause as follows: —"Your company (i.e., Amalgamated Dairies) agrees that during the period of this agreement referred to in clause one, it will not, except in accordance with the terms of this agreement, acquire, buy, sell, deal in, or otherwise dispose of, whether directly or indirectly, any of the products or by-pro-ducts from time to time manufactured by the Dairy Company (i.e., the associated company). The Articles of Association of Amalgamated Dairies were drawn up with ample scope for expansion, and for the expr.ess purpose of enabling a similar contact to ba made with producers of other countries in which the New Zealand Co-operative Dairy Company may pr may not be interested. Sound Marketing Scheme. Mr, Fulton said that, in his opinion, Ihe statements made by Mr. Grounds ,were calculated to arouse suspicion and distrust where none existed, and it would appear that the only purpose of i;uch remarks was to deliberately prevent the success of the Amalgamated Dairies' marketing organisation, notwithstanding the fact that their scheme was identical in principle, but without compulsion, to that previously advocated by the Control Board. He did not intend to deal further with the various matters referred to by Mr. Grounds as affectinp; the New Zealand Cooperative Dairy Company. These, he thought, might well be passed over, as no good purpose would bo served by causing further disruption in the industry, but in conclusion ho would like to say emphatically that the directors of the New Zealand Dairy Company, to a man, were .convinced that the Amalgamated Dairies jhad put forward a sound constructive '.tearketinjj scheme, and that thero was better in sight. They considered lengthy statement liafr accurately sot out 'the position