MARKETING OF PRODUCE

New Zealand Herald, Volume LXX, Issue 21596, 14 September 1933, Page 12

MARKETING OF PRODUCE

DAIRY TRADE PROPOSALS "CONTROL IN NEW GUISE" CLAIM BY FREE SELLING GROUP The claim that New Zealand dairy producers are again being asked to accept a policy of absolute control is made by the Now Zealand Dairy Produce Free Marketing Association, in a statement , criticising tho proposed changes in the system of marketing recently put forward by tho London Importers' Association, and now awaiting the consideration of the Dairy Produce Board. Tho Free Marketing Association is a new organisation comprising factories wishing maintain present marketing arrangements. "Tho disastrous policy of absolute control ! of dairy produce, pursued by tho dairy board in 1926-27, has reappeared in a new guise with the exception that there is no mention of price fixation as yet," it is stated. "Serious consequences await the producers if they adopt tho substance and essence of the scheme put forward in tho name of the Importers' Associa-" tion." Fundamental Principles The statement continues: —"With regard to marketing methods, three fundamental principles must be kept in mind. (1) The concern of the producer is to get an outlet for the whole of his production at the best possible price. (2) To attain his objective, he needs to encourage every substantial and reputable trader possible, in the United Kingdom, New Zealand and elsewhere, to be interested in the sale of New Zealand dairy produce. (3) In order that every possible channel to the consumer shall bo used to the utmost, dairy factories need to preserve complete freedom to select the time when, the place where, and the concern to whom (or through whom) they shall dispose of their produce. These principles are of 'particular importance today in view of the tremendous increase in production in the Dominion." Dealing with tho importers' proposals, the statement continues: "Tho first clause proposes that tho board shall take control of the export of butter and cheese in co-operation with a restricted number of licensed importers, the produce to be allocated among these importers. This means that the number of those taking part in the marketing is to be limited. Those importers who do,take part are to have their activities confined to beirtg commission agents for factories through the board. Thus, a few concerns are to be given a monopoly by arrangement between the Importers' Association and the board. Avenues Whittled Down "There is to be a whittling down of tho avenues by which New Zealand dairy produce, may be marketed. This is further shown by the fact that the scheme completely disregards the New Zealand companies, firms or individuals, however substantial, who are at present serving the producers. The facilities provided by theso concerns are to be arbitrarily eliminated. This will be the end of the healthy competition from which the producers benefit. "The second clause gives the board tho right* to select for any factory the United Kingdom agent through whom its produce shall be disposed of. While factories are to co-operate with the board in making the allocations to agents, tho final decision rests with the board. Factories will thus lose the close contact hitherto maintained between factories and United Kingdom houses. "Clause six proposes to restrict the number of brokers. whom importers may utilise. Even if a broker has a buyer for, say, 100,000 boxes of butter, or 500 tons of cheese, that broker must try to fill his order with butter and cheese from a country other than New Zealand, unless he is 'accredited' by the Importers' Association and the board. "A Close Corporation" "The whole scheme is one of restriction and reduction. of the channels of , trade by the creation of a close cor-» porationj elimination of competition, and the destruction of the freedom of dairy factories to dispose of their produce in the manner they consider advisable and best. The more the number of consignment agents in the United Kingdom is limited, the less incentive there is for those agents to compete with each other, so that the trend is all toward a levelling-down of returns to consigning factories in New Zealand, instead of a levelling up. "By restricting the channels of trade the total, outlet is restricted. With the problem of marketing the enormously increasing production of New Zealand dairy produce, buyers are to be welcomed with open arms, and not subjected to restrictions and impediments. Now Zealand has more dairy produce for sale than tho United Kingdom can conveniently > absorb, or wishes to absorb, and in these circumstances it is sheer folly to put any kind of restriction on any persou, firm or company as to the method or channel by which they may acquire supplies." ■