MARKETING OF BUTTER

Otago Daily Times, Issue 22023, 4 August 1933, Page 9

MARKETING OF BUTTER

TOO MANY DIRECT IMPORTERS GREATER CO-OPERATION URGED (Special to Daily Times.) AUCKLAND, August 3. “ Tlie present system is entirely against the producer inasmuch as there are too many first-hand importers who are competing with each other for sales," said Mr Elliot K. Davis, in discussing, on his return this morning from a two years’ trip abroad, the marketing of butter in the United Kingdom.

Mr Davis said there was no doubt this position had been created in the Dominion itself because there were so many factory units without any federation. Every factory had its own method and its own idea as to whom should market its product, and this distributed the butter among too many hands. The inevitable result was that when the market in Tooley street was quiet the Tooley street agent could not get rid of his stocks quickly enough, and unless he did so he incurred losses.

“ The majority of the importers in Tooloy street have very little organisation beyond an office and salesmen,” Mr Davis commented. The salesmen sell the butter to other importers, who eventually distribute it to the retailer. The worst feature of this system is that all the invoicing is done by the broker, and the vendor does not know who actually purchases, nor does the buyer know who is the seller. They are, in fact, taking in each other's washing and passing it backwards and forwards. It is obvious that a consignment under these conditions may have passed through 20 hands before finally reaching the retailer. By this time the poor New Zealand producer has been forgotten and left in the background, the Tooley street people being interested only in their own commission and the profits on their speculations.” Mr Davis offered as a solution the licensing of a selected, number of substantial importers in London, a suggestion which, incidentally, was the subject of a communication from the Importers’ Association in London to the New Zealand Dairy Board while Mr Davis was homeward bound.

Referring to the lack of co-operation among New Zealand factories, Mr Davis said that they were nearly all competing with each other so as to get the best average return. They did no eeera so much interested in the price so long as it equalled that of adjacent factories and enabled them to retain their supplies. That was only human and natural, but they should be saved against themselves by co-operation. Mr Davis suggested that there should be district committees for the purppse of disposing of the outputs from all factories in the district. A central committee could do away with all forward selling which, in his opinion, was' a mistake, and the factories would then get the pooled return according to grade, steamer by steamer, instead of competing with one another before the butter was actually shipped. Discussing the marketing of Danish buttter in England, Mr Davis said it was produced and cleared every week. “ Whatever the market is they meet it,” he said, “ and the opening price is decided in Copenhagen every Tuesday. They try out this price, and if the supply for the week is not cleared they can tell exactly what the price should fall to in order "to clear it. In my opinion the • higher price obtained for Danish butter is not due to quality but to their organised marketing conditions. To meet the imposition of the tariff of 15s per cwt on butter Denmark immediately depreciated her currency 25 per cent. The kroner was brought from 18.6 to the £ down to 22.5, which nullified the effect of the tariff. The same thing applies to her enormous export of eggs to England, in which a tariff was placed of Id to Ijd per dozen, according to weight.”