HIGHER PRICES

New Zealand Herald, Volume LXXVII, Issue 23719, 27 July 1940, Page 8

HIGHER PRICES

GROCERY LINES RISE IN SALES TAX GROWING LIST OF GOODS Higher prices for many classes of groceries aro already noticeable in retail stores, this being the result of the recent increase in sales tax from 5 to 10 per cent. Authority to raise prices on affected lines has been secured from the Price Tribunal, but permission extends only to passing on the higher cost through the tax. Generally speaking, where rises have taken place, the price is up by Jd or Id an article, and as grocers replenish stocks which will then be loaded with the higher tax, the list of goods bearing increased prices will naturally grow.

It is estimated in the trade that 60 per cent of goods purchased for the average family from grocery stores comprises lines not exempted from sales tax. Turnover is rapid in the grocery trade, so that it will not he long before all subject classes bear the higher tax impost. The impossibility of passing on fractions of one.half-penny will mean that grocers will have to bear some percentage of the new taxation. Bars of chocolate and other confectionery are quoted as an example. Further, there are also standard lines with a recognised price of say, 3s, on which it would be impossible to pass on the higher cost without loss of trade. "The grocer now floes not make working expenses on such non-taxable lines as bacon, flour, sugar, eggs and butter, and the higher tax means that this list of profitless goods will be extended." said one grocer.