CO-OPERATION IN MARKETING FRUIT.

New Zealand Mail, Issue 1264, 21 May 1896, Page 5

CO-OPERATION IN MARKETING FRUIT.

One of the most interesting papers read at the Fruit growers’ Conference was that on “Co-operation in Marketing Fruit,” contributed by Mr A. Lorie, general manager of the Teviot and Alexandra Fruit-growers’ Company. In the course of the paper it was pointed out that, although cooperation amongst fruit growers in New •. Zealand was no new thing, it had remained for the Teviot settlers to prove that it could be made an unqualified success. l*i ior to the year 1890 the Teviot growers were probably as divided a body as could he found anywhere, their system of handling fruit being more primitive than existed in any other part of New Zealand. A few of the largest growers followed the old-fashioned method c,f bringing their fruit into Dunedin, renting premises, and acting as their own retailers; others entrusted their fruit to these, whilst the remainder consigned their crop to retail fruiterers, taking whatever price they could get. When there was not sufficient fruit grown to meet the demand, this latter system answered veiy well, hut as soon as the supply increased there was serious dissatisfaction. None of those systems was satisfactory, as it was patent to all that with the constantly increasing output these arrangements would be inadequate to meet tho requirements of the business. In 1890 a deputation of the growers waited upon Mr Lorie and asked him to suggest some system by which a reliable market could be found. Mr Lorie saw that the task would be one of much difficulty, since the supply already exceeded the local demand, although the jam factories took a fourth of the entire output; and it was ascertained that it was not certain that the demand by the factories would continue, as they had already lowered their prices, which were then nearly as low as it was possible for growers to supply them

with any margin of profit. Other objections had also to be overcome, especially the vested interests. Those who had been in the habit of consigning their fruit to retailers feared that the trade would be lost to them if they withdrew their consignments, whilst those who sold their own fruit hesitated about throwing up a connection which had taken years to establish. So it happened that the first attempt to consolidate the Teviot fruit-growers ended in partial ftilure, but it was decided that the proposal of Mr Lorie, that they should send him the whole of their fruit, should have a trial. In fact four systems of dealing with the fruit were practised during tiie following season. Nextseason Mr Lorie was again approached with a view of forming a co-operative association. Many difficulties were again met with, as sone of the settlers refused to sign an agree ment. Despairing of uniting the growers by any other means, Mr Boric made a cash oiler for the whole output of the district, tho price offered being that received by them during the previous season, less commission. This offer was almost unanimously accepted. Mr Lorie was to deposit £IOOO as a guarantee, and whilst having tho

option of taking the fruit for 10 years, was allowed the privilege of cancelling the agreement at the end of a year. Theie was ono dissentient to this, and as a result the contract fell through. Negotiations were again renewed for forming an association, which eventually resulted in the formation of the Teviot and Alexandra Fruit-growing Association. An agreement was signed by all the growers, under a penalty of £IOO each, to send all their fruit to Mr Lorie for sale, reserving to themselves,

however, the right !o sell in any part of the colony south of Milton. The Association commenced operations in the season 1891-2. New troubles now cropped up, as the factories refused to buy the fruit except direct from the growers. The retailers took up the same stand However, a firm front and square dealing soon satisfied the factories and retailers that the Association only sought fair-play, and at the end of the season they were able to congratulate themselves on the success of this arrangement. Matters went on smoothly until the season 1893-4, when ono or two growers refused to sign the agreement, which required to be renewed annually, although they promised verbally to stand by the Association. This promise was not carried out, as one of the growers consigned his fruit to an outside firm, with the result that, as buyers had a choice of two markets, prices collapsed, and the Association became a thing of the past. Again the task of forming an association was essayed, and after considerable negotiation it was decided to form a company. None but fruitgrowers were eligible as shareholders, and even they were only allowed to take up shares to the extent of 10 per cent, of their largest one year’s crop. By this it was ensured that every grower contributed to the Company an amount [ equivalent to his interest in the fruit industry. No fruit grower is permitted i to hold shares unless he signs an agree- i meat to sell to the Company the whole of his fruit, at such prices as shall from | week to week he fixed by the general manager. Such growers as do not I agree to become shareholders can still J sell their fruit to the Company. j

The Company's agreement with the growers provides that each shareholder n ust keep his orchard free from pests to the satisfaction of the Company. I Power is given to the directors to have this work done at the expense of tiie owner should he refuse or negb et to c.ury out the.se rc quin mcnis It, i.s also further provided that tho ! Cumpany shall annually apppoint a lit and proper person to inspect the orchards of the growers. When the Association was formed it was stipulated by Mr Lorie that the growers should have a representative in his store with access to all the books and papers relating to tiie business. 'This step was taken in order that tie growers might be acquainted with everything that affected their interests, and have no reason for suspicion. 'The presence of such representative makes matters run more smoothly, as he is in a position to reassure growers who might be appre hensive on any point. The system followed for the sale of fruit is as follows : Every night during the season Mr Lorie,the general manager of the Company, confers with the growers’ representative as to the prices to be paid for the fruit next day, the prices realised to date having been carefully analysed and all outside agents

communicated with by telegram. After coming to a decision the prices are wired early next morning to the growers, and these hold good for all fruit received into store that day, no matter what is realised. It is of no moment to the grower whether a profit or loss is made, since he is absolutely guaranteed the prices quoted. The prices vary, however, according to the grade of the fruit. At the first meeting of the Company various standards for grading were resolved upon, and each member was supplied with a printed grading card.

All fruit is first graded by the grower, and this is checked by the general manager, the growers’ representative being umpire. On the fruit i being brought into the store in Dunedin j the cases are placed on a table in front of tho general manager, who is unable to see to whom tho fruit belongs. It is then graded, the decision of the general manager being final unless the growers’ representative differs from him, in which case the matter is discussed and always amicably settled. 'The fruit is then weighed in presence of the umpire, and the weight credited to the grower’s account at tho price ruling for that grade. The grower’s interest in the consignment is then at an end, as it is now the property of the Company. In disposing of the fruit, the Company’s general manager is guided by the demand from the various outlets. A sale of fruit is held daily at three o’clock in the afternoon, this being for the trade solely, a public sale taking place two hours baler. The result of practically all the fruit going to one storo is at once seen, as the buyer must go to the seller, instead of tho latter running after the former, whilst keener competition must result j from having all the purchasers at one j sale. Another benefit which has been reaped by the grower since the inception of this system is that the cases are paid for by the purchaser, instead of j being ghe i free as formerly. This item I alone amounted to a considerable sum annually. Freights have been considerably reduced since the formation of the Company, and satisfactory arrangements have been made with outside markets, which would not be possible without co-operation. The Company is no longer dependent on the

whims of factory proprietors for the disposal of inferior fruit, since the profits that have been made will enable them to manufacture on their own account next season and thus come more directly into contact with the consumer. The prompt and satisfactory returns received from outside agents are attributed to the excellent manner in which the fruit is graded and packed. The season just closed has been a most successful one, and, notwithstanding thattho fruit had not been up to the standard of previous years, on account of the unseasonable weather, the prices realised have been belter than those of the previous year. So far there is every reason to be proud of the success of the Company, which has placed growers in a thoroughly independent position, not, as has been previously shown, without many difficulties. An important feature in the constitution of the Company is that the general manager cannot be dismissed unless by a vote of 75 per cent, of the total subscribed shares. 'This gives the manager practically a free hand, which is essential Co success, since interference with business arrangements by growers, who know little of such affairs, would »• cessarily result in disinter. S.-vero penalty clauses, too, on growers ate essen-

tial, as otherwise sec- ssions would be continually oeeurrirg I'nder the new onh-r of things the glowers kn >w that tiny ate bound to the Cumpsnv, so they have made up their minds to pull together, with the result that the Teviot and Alexandra Fruit-growing Company hold the proud position of being the most independent body of fruit-growers in the Colony. With combination growers in other localities can obtain the same position.