AUSTRALIAN TOBACCO

New Zealand Herald, Volume LXIX, Issue 21379, 31 December 1932, Page 5

AUSTRALIAN TOBACCO

UNUSUAL TRADE FACTORS MANUFACTURERS' PROBLEMS LARGE COMPANY'S EXPERIENCE - Commenting upon the accounts of the British Tobacco Company (Australia), Limited, details of which' were published in the Herald on December 15, .the deputy chairman of the company, Mr. C. H. Reading, who presided at the annual meeting in Sydney that day, said that as, had happened in the previous year the profits of the subsidiary companies had been still further reduced. 'Until the economic situation permanently improved, not only in Australia but also in other countries, and the consequent purchasing . power of the people, was greater than at present, he could not see how any in-' creased earnings could be expected: Early in the year the Federal Government' opened negotiations . with . several tobacco manufacturers in Australia and, ... in order to assist the Government and the growers, undertakings were given, to the Federal Government to purchase a total quantity of not less than 7,200.0001b. at an average price of 2& 3d per lb., provided the leaf was of good marketable quality and suitable for manufacturers' • requirements. Quantity of Interior Leaf Under this arrangement the company's quota was 6,000,00016., which was greatly in excess of its estimated normal requirements but, as a mat'.er of fact, their companies had exceeded their quota and had purchased out of this Season's crop over 8,000,0001b. and they were still continuing ' to purchase. . = " . Unfortunately an unduly large proper- ' tion of the leaf produced was definitely below the standard required by fh» majority of Australian smokers ' and • substantial quantities had been refused, continued All*. Reading. The over-production of inferior 'leaf, „due' either to the inexperience of growers or on account of the leaf beingj. grown in unsuitable districts and conditions, was a very disturbing feature. Some new districts, however, 'seemed to have the necessary conditions as regards soil arid climate and as they comprised very large areas it was more than probable that within the near ' future they would provide mOre than the total leaf ' requirements in Australia. ' Smokers' Taste and Finances Whether the past year's arrangements would be renewed depended entirely upon the taste of the smoking public. To. enter into any binding contract at the moment was out of the question, but the Company had given ths general assurance that ifc would buy next ' season the maximum quantity of leaf suitable for 'its requirements and consistent with its needs and the public demand. Beyond that it could not go or be expected to go. Shareholders would appreciate the manufacturing difficulties which times like these created; the unsettled state of smokers' finances and the consequent; in- / clination to seek cheaper - tobacco, even if of a lower quality, had called for unceasing vigilance in order Successfully to cater for these unuSual factors. SEASON'S APPLE CROP SUGGESTIONS FOR PURCHASE OPPOSITION IN HAWKE'S BAY Hawke's Bay is definitely Opposed, to the suggestion to sell the 'whole of the New Zealand apple crop to a representative of which will be in New Zealand early next year, with the object of negotiating a deal. Information to this effect was contained in a statement made by Mr. A.. L. Baumgart, secretary of t-hb Hawke's Bay Fruitgrowers' Association, in reply to an announcement tha£ negotiations were to take place. An offer Of a fixed minimum price is to be made for the whole crop from the Dominion at. a figure which Will probably ' be above the present guarantee, with prospects of a higher payment if market conditions warrant it.- At the time the matter was published, it was made clear that no decision had been reached, and also that substantial. Opposition Was likely, as well as a fair amount Of Support. Mr. Baumgart stated in Napier that growers should clearly understand that the New Zealand Fruit Export Control Board Waa nOt committed in any Way to the proposal, and that no definite decision either way would be made until January. SHIPPING COMPETITION SUBSIDISED FOREIGN LINES P. AND O. DIFFICULTIES In commenting on the P. and 0. Com- ■ pany's List nnnggil report- the Times, London, pointed ou? that conditions in the import, and export trade of India had been very unfavourable, and in the passenger service between Europe and India the P. and O. has now to meet keen foreign competition of the subsidised kind. The ' circumstances of Far Eastern commerce have been subject to uncertainties. Tha P. and O. is concerned, among its varied interests and through an associated company, in ordinary cargo shipping, atid the deplorable state of the freight markets has been notorious. - ' J'robably one of the most encouraging features of the work of the P. and O. and Orient Companies has been the continued success of tht passenger cruising programmes, but the earnings from this business would have fallen far short of ' those which could have been secured from a satisfactory volume of traffic in the ordinary passenger services. ' The P. and 0. has a fitie modern„fleet capable of large earnings if the traffic exists for it, but while the ships have not been adequately employed even the earning of the full allowances for depreciation, which the. management has been accustomed to-provide, would have been far from easy. ' j The point should not be overlooked that substantial dividends have been paid to the deferred stockholders during the last few years, and had the trade depression lifted earlier, as many business men .. thought it. would, there should have been no occasion for the present complete interruption of the. record. The British India Comparty, as its name is nuiihly concerned with Indian trade, and its ordinary shares are held by the P. and O. As wan announced in the Hebald on November 30, the company was unable in the past- vear to recommend a dividend on the £4.592.518 of deferred stock. This , is the first year sirtca this Stock -was created in 1889 that holders have not received a payment.