SELLING DAIRY PRODUCE

New Zealand Herald, Volume LXVI, Issue 20306, 13 July 1929, Page 14

SELLING DAIRY PRODUCE

'AMALGAMATION SCHEME.

BASIS OF AGREEMENT.

DOMINION AND AUSTRALIA

THE PROVISIONS EXPLAINED.

j"ttY TELEGRAPH —SPECIAL ri.EPOR.TEtI I WHANG ARE I. Friday Tho bas's ot the scheme for co ©vdinatcci marketing of dairy produce re oently completed by Amalgamated Dairies. Limited m conjunction wilh Australian interests wa« explained in detail by Mr XV. Grounds .■hairman of tho North Auckland Dairy Association, and Mr. VV. Good fellow managing director of the New Zealand Cooperative Dany Com pany, Limited, at a meeting at \\ hanga rei this afternoon.

Mr. Grounds, who convened the meet j ing as chairman of the North Auckland j Dairy Association, said:—"Since my in , timation at 'tie Nor. h Auckland confer j cnco of the prospect of a basis being ; found foi co-ordinated effort in market- J ing, the an appears to have been full (if rumours, speculation and wotidei at tho prospect of this unexpected develop ment." There had lieen deep disappoint ment ai the breakdown ot the control j policy of which marketing had been the , essence, continued Mr Grounds. I elementary efforts m the way of ship j ping, insurance and storage had been helpful, but tho central idea remained and there was no justification for con- i fusing it with the supplementary. Basis For Renewed Efforts. FaiLiug compulsory control ii had be como obvious that a scheme of voluntary marketing was the only immediate y practical way, but nothing effectual could Lo accomplished without including the large Waikato interests, representing a closely organised 25 per cent, of the in dtis.ry. Negotiations with Mr. Good fellow had been on that plane expected of leaders of the dairy industry, and a few days ago an agreement was reached which he felt justified in accepting as a basis, for renewed eft'oit. Tho main points in the agreement were that Amalgamated Dairies bo re organised to allow fuller participation in tho business bv all companies linking up, while unacceptable conditions in the present articles of association of _ Amalgamated Dairies were to bo eliminated. A council was to be established consisting of the chairman of directors of all contributing companies, and it wotud annually nominate. three, of its members to tho board, associated factories thus electing three ot the seven directors. Sharp In The Profits. Associated factories would share in profits according to tho volume ot their supplies. Profits due to associated companies might bo devoted at the discretion of the 'directors to an issue of preference shares, fixed deposits with the company, or cash relate. Sh;.re dividend to be limited to 8 per cent, ordinary and 6 per cent, preference. Existing ordinary share capital was to remain as at present allotted to the New Zealand Dairy Company, Mr. Hood fellow and Mr. J. B Wright. The provision for dairy companies ~o gradually grow into the business, Mr. Grounds regarded as most satisfactory and acceptable. If any new issue of ordinary shares were made contributing C0I P" panics could take; up their quota on the basis of their volume of business. Ino arrangement was for seven years, subject then to revie v and mu'ual agreement, or renewal, or alternatively, the industry might then buy out the interest of Messrs. Goodfellow and Wright and dis tribute their sharo among the lirflustry on a supply basis. Provision had been made that existing salaries, commissions, and dividends remain up to a definite figure, after which a larger share of profits be paid to contributing companies, thus saleguarding .their. interests. As business increased all allied companies would participate in te suits of the established carton and packago trade. Joint Marketing PI in. • In marketing arrangements had been made for Amalgamated Dailies to link up' with Australian dairy interests by the formation of a company for the joint marketing of Australian and New Zealand dairy pioduc.iun. Amalgamated Dairies held tho largest interests in the new company, to be called Empire Dairies, the management of which in London would be in the hands of Messrs. J. B. Wright and A. E. Gough. "I advocate acceptance of this scheme ns the soundest and most practicable available," said Mr. Grounds. "There is no intention to take advantage of anyone. Wo simply desiro to protect producers and provide opportunity for the fullest development of the industry. Mr. Goodfellow, addressing the meeting, said that on a recent visit to Canada ho° sfiw the urgent need for price fixation and co-ordinated marketing, especially in Vancouver, where merchants themselves asked whether prices could not bo fixed at a flat rate in Now Zealand to prevent undercutting competition amon<* themselves. They declared they coulcf sell at , Is 6d as easily as at Is 4d and as much in quantity if prices were only stabilised at the New Zealand end. This season '■ Amalgamated Dairies would sell ex stock and not c.i.f. Vancouver. A vast market was waiting in Eastern Canada and Amalgamated Dairies this year was going to carry constant stocks at Halifax, selling ex stock at London parity as well as c.i.f., but the results would probably encourage ex stock purchasing by merchants in future. Selling Floor in London. Mr. Goodfellow elaborated on the conBtitution of Empire Dairies, saying that a dairy produce selling floor in London would be used for the joint sale of New Zoaland and Australian dairy produce at fixed prices to tho mutual advantage of both countries, while New Zealand produce would continue to command the usual premium over Australian. It was hoped Canada and South Africa would later co-operate in Empire Dairies. Amal gamated Dairies would hold 50 per cent, interest, the Australian Federation 36 per cent, and the balance would be reserved for other Empire dairy producing countries. . ... TouUy Street ' merchants would be id x.-ii allocations of produce from A nu't-'matod Dairies at fixed prices as hitherto..'.while. Enmirc Dairies at the time would **li at the same prices (in ;ts own soiling floors in Londor and other centres in England, ooening up now markets particularly in the west of j Erisianci

Tho speakers wore asked a number of questions, answering some of which Mr. Grounds said the industry's representatives on tho board of Amalgamated Dairies would bo two from the North and "no from the South fsland. The voting power on the council would bo one factory ono vote as in Denmark

Success Depends on Support. The initial representation of tho indns try thoy doomed just and indeed in its favour, although it was certainly honed trrit towr.rd the end of the period tho pro port innate production of associated fac torics would exceed that immediately provided for.

Mr F McDonald- Some day it is to he hoped we will again have something approaching absolute control This may bo a step toward that It appeals to ma but depends upon the support accorded it bv individual companies. Company representatives present could not, of course, pledge themselves to any definito action! Mr. J. Havward: Wo cannot expect results all at once.

Mr. Grounds said ho had received a sheaf of telegrams to-dav from different parts of the North Island to address meetings on tho marketing scheme arid both lio and Mr. Goodfellow would oxplam it at, manv con free