FROZEN MEAT TRADE

Otago Daily Times, Issue 17082, 14 August 1917, Page 2

FROZEN MEAT TRADE

AMERICAN TRUST MENACE. A GIGANTIC CONCERN COMBINATION OF FREEZING COMPANIES PROPOSED. At tho annual meeting' of the Dunedio Chamber of Commerce yesterday, the retiring president (Mr George Fen wick) dealt > at considerable length with the frozen meat trade, especially the threatened grip of the gigantio combination known as the Meat irust. Mr Fen wick said that" an international commercial domination such as the world had never seen was looming on the horizon, and the frozen meat production of the British overseas dominions was a threatened interest which, if captured, would givo the American Meat Trust something approaching a stranglehold on the world's meat business, in which pastoralist and consumer alike would bo victims. This grave warning appeared in tho foreword of a pamphlet, copies of which had recently reached this dominion. The pamphlet itself consisted partly of un article copied from an linglisn publication issued in February and devoted to an exposure of the tactics of tho Chicago Beef Trust, a huge combination of which tho Swift, Morris, and Armour firms were the directing spirits. It oontained information of a kind that . oould not fail to arrest attention in New " Zealand, for it referred specifically to the i danger which menaced the dominion's 1 frozen meat trade unless prompt measures i were taken by the Government to deal with i the insadious work of this giant octopus ' of the meat industry, which it was believed ! had prepared for extensive operations in this dominion, and had already got a steady ' gra6p on the trade. It was feared that 1 eventually its powerful. tentacles would, if ' unchecked, crush the life out of any op- • position interests with which it came in conflict, for it had been very truly said • that no private firm could now fight. Swifts or Armours—that it was the State alone ' which could do anything to help in the pre- 1 servation of existing interests. The capital 1 of these concerns was so vast that they oould ' play with the market and with live stock producers practically as they pleased, as they had already done in the Argentine. The balance sheet of the Swift Company for 1916 showed a turnover which reached tho mammoth figure of £115,000,000 for the year, and net profits stated at over £1,000,000, while its accumulated surplus was over £12,000,000. This was a gigantic fighting fund, and it was easily to be seen what small chance any ordinary opposition had of success in the struggle for supremacy. To show how the British meat market had been cornered by the Beef Trust, it was only necessary to state that in July, 1914, in the public markets in London, South American flanks of beef sold at 3d per lb, while in February of this year lOd to lid per lb was the price paid. It was not difficult to see what this meant for the poor of England. It was illustrated by the state ment that a labourer's wife who in 1914 purchased 61b of flank for a hungry family for Is 6d, must now pay 5s 6d. Time, how ever, did not permit him to go further into the question as it affects Great Britain. "What more immediately concerned us was the steps that could be taken to prevent the operations of these giant firms obtaining control of the trade in New Zealand. The advent of Armour and Co. of Australasia to this dominion was quite an undisguised attack by an American concern upon a trade hitherto carried on for the most part by New Zealand farmers, New Zealand meat (alive and dead) dealers and speculators, New Zealand freezing companies, New Zealand commission merchants, arid the various New Zealand representatives of London buyers. He meant an attack in the ordinary commercial sense that the new concern was competing for a footing (the best it could get) in the trade, and would offer strong competition. In including freezing companies he referred to those of tlicm who bought stock, for every new and important buyer in the territory was a competer with the others who had formerly held .the business. There was no apparent present menaco to the producer in Armour and Co.'s coming in, but rather an additional buyer to his advantage. Armours had bought out the business of a considerable buyer of fat stock, and all authorities agreed that they_ had " increased the pace " and helped to_ bring about the higher prices during this, their first, year's operations; it being admitted that they had not done this in any extreme degree. Tho producers , had a new buyer and tho middleman a new competitor. Naturally, the 'latter complained, and were the chief demonstrators. But what about the producer? Were his interests, although immediately stimulated, menaced eventually? Obviously it was not in their earlier operations, as described, that the American meat interests could hurt the producer. But what about the future? The air was thick with talk about the Americans having first of all taken control of the meat 'business in their own country, extinguished all. opposition by fair means or foul, turned upon the producer with the lowest prices for his products that would keep production alive, and upon the public with prices that were oppressively high. It was contended also that tho Beef Trust's operations had laid an arrest upon the growth of the stock-rearing industry in their own country, and that the flocks were stationary and the herds diminishing solely because the trust pressed so hardly upon the farmer's profit. The difference between tho low price paid to the grazier and the largo price collected from the public was the measure of the Beef Trust's profits. This alleged position had been frequently described in the press, and was familiar to those who had kept themselves informed regarding the meat trade. In this short review of the meat position tho principal point to be touched upon was the question of prevention of the advance of the American Beef Trust to the frill control of our trade after the manner of its operations elsewhere. He (tho speaker) had observed the -various lines of action proposed in the pamphlets he had referred to and elsewhere without finding any suggestion that appeared to him to be of outstanding value. The longer he looked at the problem the less easy did its solution appear, but there were a few pceliminary movements that might be suggested in the way of preparatory action. And first he suggested that a real federation, or defensive alliance, of the freezing companies was required. It was surprising how slow they had been to move in that direction. Some of them had been very ably managed and soundly developed into highly prosperous and important concerns, which hold on their prosperous way steadily, while most of them earned satisfactory dividends for their shareholders and served tbo districts where their works were situated with excellent facilities for freezing and export of stock. These I no doubt were the first functions of freezing ! companies, and they had been fulfilled in good and steadily increasing measure. But such a course of develoj,-*ment, while a mat- ' ter of congratulation in itself, did not afford tho protection that was now required by tho industry as a whole against the American menace. What is lacking? ' Obviously the first thing was suoh a conjunction of the units which constituted the industry as would enable it to act as a whole 1 in defensive measures; also tho evolution of the larger mind" which would view tho L industry as a whole and vise its united force in resistance of American capture. Before this could be accomplished the narrow sfcand- ; points must bo abandoned. It was not ? enough that a freezing oompany shareholders and nupagement should limit its ambition s to earning present dividends and holding its j trade well, wthout regard to the larger question of -whether the industry was going to last as one of the-main buttresses of tho prosperity of NW Zealand, or was going to surrender to peaceful penetration. lie ' was aware that in the past united action by freezing companies had been at a dis--1 ooont. But let those who were largei minded enough to lay aside this spirit unite . now against the common foe. There -would bo much to accomplish, including legislation. The Government and 1 legislature would bo only too glad to hear the united voieo of the trade if it > could bo orgaiisod to speak in sueh a voieo, J But before pressing for legislative or Government assistance, the companies should ' first of all ask themselves what they could do to unite the trado in its own interests ~ by organisation. The most conspicuous weak- * ness of the New Zealand meat trade had, it , was acknowledged, always been in tho marketing of products. Tho American method was to takio care of the live stock from the ® grazier's ranch in the Middle West, and ' never loso oontrol of any item of the produce until it was soli in the most remunera--1 tivo of the world's markets. Not 10Q sellers did thoy maintain as in tho British 5 market working independently and in disunion with, if not in opposition to, each 1 other, and then completely losing sight of ® their interests in tho maelstrom of the 5 wholesale and retail meat trades of the | United Kingdom; but four sellers only, representing the Chicago "big four," selling B American meat, taking care of it not as far s as Smithfield market only, but on down to the retailing of it to the piublic. and even e in a. measure retailing it through shops of. their own. A greater contrast of methods —tho New Zealand method and the American method—could not bo, and the inference ho drew from it all was that the New Zealand freezing companies ha>d mastered

the New Zealand end of the business but had hardly touched the London end at aIL Ilence the American attack found t-.ha New Zealand companies in control of one end only of the business they were conducting. They bought meat from our farmers and prepared it for shipment on the fanners' account. A score or two of London buyers competed for it through as many buying agencies on the spot, and either tho.freezing company or the individual farmer sold' it for cash to the highest bidder, and then lost sight of it entirely at a point whew the American meatman continued in full charge of his produce. ' The marketing passed into other hands beyond the control and knowledge of the New Zealander. Was that not one reason why tho opportunity was so open and inviting for tho American to come in? He saw that New Zealanders controlled only one end of their trade while he controlled both ends. The New Zealander sold the supplies here and left the oversea marketing in other hands. Was it any wonder that the American foresaw an easy capture of a trade that was but partially organised compared with his, once he brought his methods to bear upon it, So ho could afford to pay, as lie had been doing ever since his first arrival in thia dominion, as good prices as others to tho farmer, or better, because he got a distributing and retail profit at the other end, which the New Zealander passed over to others; and so when the real fight he would be possessed of more complete and effective methods, unless in the meantime wo altered ours. It would not bo easy for anyone to say jijst what steps the Americans might take to develop their control of New Zealand meat. But tho account given of their proceedings in the Argentine in one of the pamphlets ho had referred to deserved the careful consideration of all farmers and freezing companies in New Zealand. Such a united association of freezing companies as was here suggested would require to bo kept absolutely iree of tho suspicion of foreign association, and only companies that could guarantee that freedom would be eligible. In this connection it might be suggested that whilo legislation might be a feeble instrument to constrain foreign operators it could be made much, more effective against domestic companies, who might bo required to purge themselves of partnerships or secret agreements with non-British subjects or companies. But this was difficult ground, and was only indicated as one on which must partly lie the future working out. of this meat problem. _ Members of the chamber would have noticed that a commission, consisting of 16 members of Parliament, had been appointed by the Government to inquire into tho Meat Trust menace, and that the Prim© Minister addressed the commission .at ita opening meeting on the result of his investigations in England. The inquiry, which was very properly being held 'n camera, was' certain to olicit interesting evidence as to tho alleged: operations in New Zealand of a member of the "Big Four" other than Armour's. It had for somo time past been believed among those who were interested in the meat trade tliat the firm in question had been secretly operating in the dominion, and any doubt as_ to this might be set at Test by tho evidence the commission might succeed in obtaining. Tho report of the eommisaoa. would be awaited with considerable interest, and when it was presented to Parliament it might bo confidently hoped that somo effective steps would be taken to counteract the evil with which the meat trado and tho producers of the dominion wero threatened.