DOMESTIC MARKET

New Zealand Herald, Volume LXXI, Issue 21935, 19 October 1934, Page 13

DOMESTIC MARKET

RATIONALISING SCHEME ESTIMATE OF SAVINGS YIELD OF Id PER LB. EXPECTED [BY. TELEGRAPH —SPECIAL REPORTER] WELLINGTON, Thursday The Dairy Commission considers that there is an unanswerable ease for the control of. the local marketing of butter and cheese, which it is recommended" should be vested in the new Dairy Produce Control Board. The report summarises the evidence of witnesses showing uneconomic and unfair marketing, under the present system and states that, of 16 witnesses directly connected with the local butter trade, all but one were in favour of a controlled sj'stem of local marketing with a fixation of the wholesale price. The commission does not favour exploitation of the local market in order to provide a subsidy on export sales." It states that most witnesses felt that the provision of a subsidy to producers' would be regarded by the British Government as a hostile or retaliatory measure, and that would be objectionable to local consumers. It was pointed, out that the volume of local consumption of butter and cheese in New Zealand was so small in comparison with the volume of exports that local prices would require to be very heavilyloaded in order to provide a subsidy of any value to producers. The commission favoured a rationalised system of local marketing to overcome disabilities and provide the finance necessary for a policy of quality improvement without material alteration of the local price level in relation to London parity. Sale Only By Licence It is recommended that the board should be given the following powers in particular:— "To prohibit the sale on the local market of butter andJcheese by owners of dairy factories and wholesale distributors except under licence granted by the board. "To require the owner of any dairy factory from time to time to supply for the local market such quantities of butter and cheese of such grades as the board maj' consider necessary. "To limit from time to time the area within which the butter or cheese manufactured in any dairy factory may be marketed. "To require that all patted creamery butter be correctly wrapped and labelled according to grade, that all creamery butter sold in bulk be correctly described by impressed brand on both box and butter, and that whey butter be distinguished from all other butter. "To fix from time to time the minimum wholesale prices to be charged for butter and cheese by licensees and to fix discounts, commissions, and other concessions, and in the interests of the industry to prohibit any marketing practices that it may consider to be unfair or undesirable. "To levy on owners of dairy factories in respect of butter and cheese marketed within New Zealand at such rates as the board, with the approval of tho Governor-General in Council, may from time to time determine. "To any contract for the sale of dairy produce intended for consumption in New Zealand. "To arrange for the grading of butter and cheese for sale on the # local market, by the licensing of managers or other officers of factories." Utilisation of Savings The report adds: —"It has been proposed that the finance for a comprehensive policy of qualify improvement should be obtained b3 T the board from the savings that would accrue to it under the suggested scheme of local marketing control. It is estimated that the elimination of wasteful marketing methods, and the retention by tho board of the 'hidden savings' now distributed among the factories supplying the local market, would yield to the board approximately Id per lb. on butter locally sold. This would represent a total of about £240,000 per annum at the present level of local consumption. We have Bhown that approximately- £288,/00 per annum will be required to finance a quality improvement and tuberculosis eradication policy, and to provide additional funds for advertising; but that during the initial three years of the tuberculosis eradication campaign £150,000 of the £288,700 will not be required. The annual yield from savings effected by the proposed local marketing control policy will, therefore, not only meet all expenses of the board's operations for some time to come, but enable a reserve to be built up." The commission recommends that action with regard to the local marketing of cheese be deferred until the butter rationalisation scheme has been established. It is believed unwise to attempt to control the retail trade in butter and cheese, but the commission recommends that retailers be required, in advertising or displaying butter, to state the class (creamery or wjiey) and grade (finest, first or second) of the produce.