BREWING INDUSTRY

New Zealand Herald, Volume LXXI, Issue 21845, 6 July 1934, Page 9

BREWING INDUSTRY

LARGE TAXATION PAYMENT DOMINION COMPANY'S YEAR CONFIDENCE IN THE OUTLOOK'" "The company and the brewing industry in general are in their principal activities tax-gatherers for the .State," said Mr. L. J. Stevdus, chairman of Dominion Breweries, Limited, in liis address to shareholders at the annual meeting of the company yesterday. "In beer duty, customs duty on imported wines and spirits and_ in sales tax the company paid to the State, on goods sold by it during the last financial year, £41,431," ho said. That sum, Mr. Stevens pointed out, exceeded by £13,577 the total gross profit earned by the company from trading and other sources. No allowance of duty was made by the Government to cover bad debts and other losses which occurred in every business. The Government, as "the sleeping partner in the company's business," demanded and received in full its share of the revenue, and left the company to bear, out of slender margins, the whole of the cost of management and other charges, and to carry the responsibility for collection of all sums, including the duty. Increased Beer Duty When the company was formed, all estimates were made on the basis of known eosts, duties and charges. Within a very short period duty charges on beer were increased by 50 per cent, and the company was left directly or indirectly to carry the increased duty. The day that the increase of duty took effect meant the destruction of any immediate prospect of a dividend payment to shareholders. In round figures, increased beer duty had in the last three years absorbed £20.000 of the company's revenue, which rightly belonged to shareholders as dividends on their investments. Notwithstanding those imposts Mr. Stevens said he felt sure the future held a prospect for a reasonable return on capital and he would be disappointed if the policy of the directors did not bring that result very speedily onceeconomic conditions improved and the spending power of the public was increased. The improvement shown in the past, year's accounts, Mr. Stevens said, could not be attributed to improved trading conditions for he considered last year was one of the most trying vet experienced in the brewing and hotel industry.' The unemployment figures showed that last winter was the worst so far experienced l while the prices received for butter and cheese were disastrously low. Capital Reduction Proposal An important part of the result, if not the -whole, was due, in his opinion, to the energetic sales policy of the company, which had increased turnover for the year by over 10 per cent. Added to the sales policy, the directors had exercised every reasonable economy in the management of the company. In the course of his review of details of the balance-sheet, Mr. Stevens said that assets of an intangible nature still shown in the way of goodwill, and a debit" balance in profit and loss account made up principally of the company's original flotation and preliminary expenses. He hoped at a suitable time to secure approval of a scheme for . capital reduction so that those in- j tangible assets might be removed. The directors had had the matter under consideration. No harm would come o£ leaving it meantime. He impressed on shareholders, however, that the com- . pany's shares were worth far move than their market quotation, and he advised them not to part with holdings unless at a price in conformity with their real value. Mr. Stevens concluded with appreciative reference to the the company's executive officers and the staff. Upon his motion the report and bal-ance-sheet were adopted. Details or these were published in the Hebald on June 22. The retiring directors, Messrs. Stevens, W. B. Brittain and W. J. P. Hodgkins, were re-tlected.