DOMINION BREWERIES

New Zealand Herald, Volume LXIX, Issue 21247, 29 July 1932, Page 5

DOMINION BREWERIES

SECOND YEAR OF TRADING "RESULTS VERY GRATIFYING" INCREASE IN THE OUTPUT "Jii view of the continued depression mid keen competition, the results of the company's second year of trading must bo considered very satisfactory," said Mr. H. Reimers, chairman of directors of Dominion Breweries, Limited, who presided at the unnual meeting of shareholders yesterday. When reviewing the affairs of any commercial or industrial concern one had to keep in mind the almost unprecedented conditions which prevailed throughout the world, said Mr. Reimers. "The tremendous fall in the purchasing power of the average consumer," ho said, "has brought about a decline in tlio demand of most commodities, whether luxuries or the baro necessaries of life, which, in many instances, dealt a severe blow to long established local industries. Tlio hotol business with its associated trades has proved no exception arid for the first time in the history of the New Zealand brewing industry the consumption of beer for the Dominion showed a decrease of nearly 3,000,000 gallons when compared with the previous year. Standard ol Products "The progress made by Dominion Breweries, Limited, is particularly gratifying," continued Mr. Reimers. "We have not only maintained our previous output, but the production of tho brewery for the year actually shows an increase of 40 per cent over that of the previous year. This does not mean that our business was not affected by tho highly adverse conditions which prevailed throughout this period, but had it not been for the general decline in consumption the Waitemata Brewery probably would have been called upon to double its previous year's production. "Tliose satisfactory results are undoubtedly duo to tho high standard of quality your directors have set themselves in the manufacture of Waitemata products. Waitemata ale and stout have now become firmly established, and enjoy a popularity which is increasing from day to day. The additions and improvements made in the brewery enable us to place on the market a product of uniformly high quality, guaranteed absolutely pure and entirely free from any trace of chemicals or preservatives. This in itself is a great achievement and fully justifies the expenditure incurred. We may justly claim that the Waitemata Brewery at Otalmhu is one of the most up-to-date arid most scion- | tifically equipped breweries in New Zealand to-day and the full benefits of the policy pursued by your directors in this direction will be reaped by the in tho future. Increase in Taxation "Although tho company's turnover was so highly satisfactory, the heavy increase in taxation, necessitated by the falling of revenue experienced by the Government, deprived tho company to a great extent of tho benefits which otherwise could have been expected from the increased business. An increase of 50 per cent in beer duties, etc., can bo considered only an unjust and inequitable *piece of class taxation and would hardly be tolerated by any other industry or commercial enterprise. As already pointed out in the report during the year under review your company was called upon to find over £38.000 for duties alone, the bulk of which could not bo passed on, but had to be met out of tho earnings of the company "it is almost entirely owing to this fact," said Mr. Reimers, "that the net earnings of the company for tho past year aro not as satisfactory as they otherwise would have been, and that the directors cannot recommend the payment of a dividend to shareholders. After making full provision for land, income and other taxation, depreciation, bad debts, etc., it is recommended that of tho amount available for distribution, £2436 2s 2d, the sum of £IOOO be transferred to reserve, increasing that amount to £4OOO, and that the balance of £1436 2s 2d be carried forward. Company's Strong Position. ''Considering the heavy expenditure inevitably associated with tho launching of a now company, the difficulties to bo met in finding a market and creating a demand for a new product, tho heavy increase in taxation to bo found by the company in its initial stages, and the critical economic and financial conditions of the country generally, the directors feel that tho company has every reason to bo proud of its past achievements and of the strong position it holds to-day. Moreover, the directors have every confidence in tho future and feel that the most difficult period of the company has been passed and that normal conditions will bring tho shareholders tho full benefits of a sound foundation. "The directors and management fully realise that tho success of the company is entirely dependent on the quality of its products and the popularity of Waitemata beer, wherever it has been introduced, and tho daily increaso in demand is convincing proof that wo havo fully succeeded in this direction. Support of Shareholders. "I would liko to omphasiso tlio great service that shareholders, totalling nearly 500, could lender the company by their consistent and loyal co-operation," said tho chairman. "I need hardly stress the many difficulties encountered in establishing an entirely new brew and new brands of spirits on an already overcrowded market. But theso difficulties would bo considerably lessened if every shareholder made it a point to ask for and insist on getting tho company's own lines and products instead of accepting something which is probably not as good. "There is nothing unusual or unreasonable in such a request and no sacrifices aro involved. To support your own company on every possible occasion should be the strict rule of every shareholder, and I fool sure I need only mention this matter in order to securo your fullest suppprt." Mr. Reimers concluded his remarks by saying that shareholders could look forward with confidence to the results of tho current year, as there had been a considerable increase in output during the past three months as compared with the same period last year. Directors Re-elected. An amendment providing for payment of a dividend of 5 per cent on paid-up capital was moved, but this was not accepted by the chairman, who quoted from the Companies Act, 1908. "The directors aro totally opposed to tho declaration of a dividend," said Mr. Reimers. "We do not think that it is in tho interests of tho company at the present time." A motion to apply for listing on the Stock Exchange was opposed by several shareholders on the ground that this would not be to the advantage of shareholders at the present time. The motion was defeated on the voices. Tho report and balance-sheet was adopted. Mr. W. B. Brittain and Mr. W. J. P. Hodgkins were re-elected directors, and a resolution not to fill tho two vacant positions allowed for on the directorate was carried.