MILK SUPPLY SCHEME

New Zealand Herald, Volume LXXI, Issue 21911, 21 September 1934, Page 13

MILK SUPPLY SCHEME

SHARES IN COMPANY

DIVIDEND PAID ON SALES OPPOSITION OF COUNCIL Kfforts to promote an arrangement under which milk vendors and shopkeepers, by taking a share or shares in a company to be nominated, will receive in return by way of dividend a penny a gallon on all milk bought by the owner of the share, have come under the notice of the Auckland Metropolitan Milk Council. The council has forwarded a circular to all vendors and shopkeepers outlining its opposition to the scheme. The circular states that the council is of the opinion that such a proposal wouid be a deliberate evasion of the provisions of the Auckland Metropolitan Milk Act, 1933, and the participation by any vendor in the scheme would result in action being immediately taken by the council.

It was stated yesterday that the council was given wide powers under the Act. Its powers were to fix prices, and this had been done. This authority applied to wholesale as well as retail rates, and, as much as it could be determined at what price milk was to be sold to the public, the council could fix the rates between producers, vendors and shopkeepers. The scheme in question had resulted in the warning circular being issued because the return of Id upon a gallon of milk to the owner of a share, while it was termed a dividend, could be regarded as a rebate. "Its payment would mean that the owner of the share would actually be receiving milk at a penny a gallon less than the rate fixed by the council, and such a system is considered to be in contravention of the Act," stated an official. It was added that the authorities had been aware for some time of the scheme, but until recently details had been lacking. It was not thought that the proposal had advanced to any degree. The whole matter was recently brought before Mr. N. 11. Chapman, secretary to the council, by one of the large vendors in the city. From the information received by the council, the firm was approached some time ago by a man, whose scheme was that he should lie employed on salary and commission to secure vendors and shopkeepers who would purchase a share, so entitling them to th<j dividend of a penny a gallon mentioned. The company in question considered that the scheme was nothing but an evasion of the council's prices, it was stated, although the plan at the time was not definitely rejected. Since then the firm has stated to the council that it definitely considers the proposal to be an attempt at evasion. The concern desired the council's assurance, however, that no other large firm would take up the scheme if it rejected the idea. It was considered by the authorities that immediate action was necessary, and, in consequence, the circular was issued.