SALE OF TOBACCO

Otago Daily Times, Issue 22136, 14 December 1933, Page 6

SALE OF TOBACCO

FAIR TRADING CONDITIONS PETITIONS BEFORE THE HOUSE (Per United Press Association.) WELLINGTON, December 13. There was a discussion in the House of Representatives to-day on conditions in-the tobacco trade, with special reference to the interests of the retailer. The hope was expressed that the interested parties would formulate a satisfactory agreement. Reporting on 67 petitions asking that action should be taken Under the Board of Trade Act to establish fair trading conditions in the retail tobacco trade the Industries and Commerce Committee reported that while it was unable to recommend the prayer of the petition for favourable consideration, it recommended the Government to give favourable consideration to the removal of tobacco from the schedule of the Commercial Trusts Act provided the manufacturers, wholesalers, and retailers entered into an agreement safeguarding the consumers. The Leader of the Opposition (Mr M. J, Savage) said it was difficult to understand the attitude of the committee, N of which he was a member. The recommendation had not been unanimous. Last year the tobacco trade had asked for the removal of its' commodities from the Commercial Trusts Act, but the committee had unanimously decided against this. Now that action was sought under the Board of Trade Act the committee recommended what it had refused last year. Mr Savage said that if the committee’s recommendation were carried out it would simply create a monopoly in the hands of the manufacturers and would have the very effect that the Commercial Trusts Act had been passed to prevent. The retailers were being asked to hand themselves over body and soul to the manufacturers. In justice to the manufacturers it must be stated that they had not asked for such action and had been behind the retailers in the attempt to secure fair trading conditions. In the event of the recommendation being adopted the manufacturers' would fix the prices conditionally on certain retail prices being charged. They would be able to tell the retailer the price at which he ‘ must sell and the grower the price at which he must hand over his product. They would have everyone in their bag from grower to consumer, and he again desired to point out that the manufacturers had not sought this.

Mr A. Harris (Waitemata) said the conditions in the tobacco trade bad been the outcome of evolution. He pointed out that a monopoly was not necessarily evil, and when an organisation was able to deal in large quantities it could frequently buy better and sell better with advantage to the public.. Unless something was done the small retailers would very largely have to go out of business. Whether it would he wise to allow that to occur was a matter for the Government to decide. The public was undoubtedly able to-day to buy tobacco and cigarettes more cheaply .as a result of the operations of those firms which had a large turnover and a small overhead cost. It had teen felt by the committee that a reasonable oppprtunity might be provided to enable the parties to fix prices that would protect the public and at the same time enable the small retailers to continue to exist. The effort would be well worth while.

i Mr A. D. M'Leod (chairman of the Industries and Commerce Committee) said that while tobacco Avas on the schedule of . the Commercial Trusts Act It Avas impossible to fix the price higher than that at which any trader Avas prepared to sell. The committee’s recommendation Avould give an opportunity and would also provide the Minister vvith a lever to bring about negotiations for an agreement by the parties. There Avould he a threat over their heads that unless they came to an agreement their commodities would be removed from the schedule of the Commercial Trusts Act.

The report was referred to the Government.