HIGHER COSTS

New Zealand Herald, Volume LXXV, Issue 22935, 13 January 1938, Page 10

HIGHER COSTS

FAEMERS TO PAY % FREEZING WORKERS' AWARD I INCREASED CHARGES LIKELY THREAT TO BY-PRODUCTS % With wages increased under the newaward for freezing works employees by between 10 and 12J cent, new schedules setting out higher charges for killing, freezing and handling are expected to be issued by the companies. It was stated yesterday by one authority that the costs of freezing had risen by 3 per cent and those of killing by -62 per cent, these advances representing about 4 per cent of-the charges that were at present levied. During the hearing of the award claims by the Arbitration Court,-it was suggested by the employers' repra. sentatives that, if the workers' contentions were upheld, the industry would have to find an additional £500,000 annually. In its judgment, th£ Court effected a compromise, but l!Re concessions gained by the workers are expected to prove costly. It was stated that the companies were operating only on working profits, although several had built up reserves, and it was considered inevitable that the added expense would be passed on to the pro-" ducer. Attitude of Companies " There is no question about the advances having to be met, as always before, by the farmers," the principal of one firm said. " The freezing indnstrv cannot absorb the additional 3d an hour which it is now required to pay its labour and, no doubt, new scales of charges will be issued very shortly. To a certain extent the companies will collaborate in this work."

On account of the falling market; for freezing by-products it was agreed that the burden of higher wages had been imposed at an unfortunate time. When the wage advances estimated at £450.000 vTere made in 1936, the upward movement of overseas prices had reduced the shock of the new conditions. but on the present occasion a weakening demand for such commodities as tallow, fat and pelts was likely to accentuate difficulties. Future of Semi-waste Products Less interest in those side-lines whioK carry only marginal profit was also predicted. At present a good deal of activity is centred in the of semi-waste products and certain types of meat which are of little -Value in their original alfe processed, packed and despatched overseas. Owing to the higher costs, it is considered doubtful whether it will be an economic proposition to continue this work and, in general, the tendency will be to avoid manufacture within the Dominion itself so far as possible by freezing the" meat and sending it away in bulk. The decision of the Court in declining to introduce a 40-hour week in the industry was applauded. Highly seasonal fluctuations, the promptitude with which the programme has to be carried out, and the very nature of the activities at the works, it was stated,fully justified this attitude. Moreover, the economic burden would have pcoved extremely difficult.