BRITISH TOBACCO MARKET

Otago Daily Times, Issue 22911, 19 June 1936, Page 24

BRITISH TOBACCO MARKET

NEW ZEALAND’S LATEST BID FAVOURABLE IMPRESSION CREATED (From Our Own correspondent) (By Air .Mail) LONDON. May 13. An invasion of the tobacco market in Great Britain is being made by the Empire almost as a whole, and the percentage of Empire tobacco imported into Britain has risen from 1 per cent, in 1019 to 23 per cent, to-day. The latest Empire country to try the English market is New Zealand, which sent, late last year, a consignment of some 05,0001 b. selected, prepared and packed under the supervision of the Department of Agriculture. This consignment is reported to have “surprised the trade by its excellent quality.” The Tobacco World, commenting upon it. said: "It was all of good colour and quality. Its leaf compares well with the best sent from other of the Empire producing countries, and its smoking qualities, as we tested for ourselves. are excellent, smooth and cool, and with no unpleasant tang. There is little doubt that if the quality is maintained and the price is competitive there should be a good future for such leaf.” Taste and price will undoubtedly be the criterion for New Zealand’s latest export, but she will be faced with tremendous competition to gain a foothold in the English market, the ramifications of which are extremely complicated. It is at present the subject of an inquiry by tile Imperial Economic Committee, which is engaged in hearing evidence before preparing a report. At present the report is hold up to allow additional information to be included, but it is anticipated that it will go before the main committee in June or July, and lie published shortly afterwards. Before its contents are announced to the public copies will be sent to all Empire Governments. New Zealand will thus be afforded ample opportunity of judging whether the English tobacco market is a favourable proposition or not. A LONG WAIT.

The most optimistic thing that can be said about New Zealand’s chances of tapping another source of income is that she will have to be content with a long wait before establishing herself in the tobacco market, taking for granted that the price of her product will suit the manufacturer and the taste will appeal to the public. As almost 80 per cent, of pipe tobacco, it is estimated, is of Empire origin, any further improvement in that direction is unlikelv. It follows, therefore, that the further expansion of Empire leaf depends upon the use of cigarette type and that New Zealand’s chief hope lies in catering for this branch.

Competition among Empire countries to secure a footing in the English market is decidedly strong, and it is thought that, unless New Zealand’s tobacco is exceptional. both ns regards taste and price, she has arrived rather'late. Every effort, however, is being made by the Tobacco Federation of the British Empire to persuade the manufacturers to satisfy their requirements with Empire tobacco instead of American, which supplies practically all their needs. But the manufacturer and the public are conservative, and the fact that American tobacco finds its way into the bulk of the popular brands tends to give the manufacturer a deaf ear when the rood qualities of Empire tobacco are extolled. Moreover, the American supply is regular, nnd_ the manufacturer has, once again, no incentive to look further afield.

INDIA’S EFFORTS

As an instance of the competition which faces New Zealand from other Empire countries, India, which for years has been send in'; large quantities of low-grade tobacco to Great Britain, is concentrating upon a better grade of tobacco which she can produce at a price nearly 50 per cent, below that of New Zealand's. India now probably ranks with Canada as Southern Rhodesia’s great rival. .Southern Rhodesia, incidentally, in addition lo the increasing popularity of her tobacco in Great Britain, is endeavouring to obtain a footing in Australia. But tobacco is being grown by the Australians themselves. and with Government aid considerable progress is being made there. Very large quantities of Nyassuland tobacco are imported into Great Britain, practically all for pipe smokers. Owing to low labour costs, the price of this leaf is very cheap. The fact that the future of Empire tobacco lies chiefly in the production of cigarette types suitable for the United Kingdom market is shown by the efforts of growers to improve quality and by the attempts to produce cigarette tobacco in countries not already doing so. The effect on the Empire tobacco market of the abolition of the A.A.A', in America is decidedly problematical, for no one appears to know what will happen over there. It seems fairly certain, however, that some form of crop control will bo organised by the growers themselves, who have no wish to return to the low prices prevailing before the A.A.A. came into force. .Extremely unfavourable weather in the United State* has considerably reduced the crops, so that in any ease a fairly hi "h price for American leaf is likely in the future.

EMPIRE IMPORTATIONS. An indication of the Empire tobacco

imported into Great Britain is contained in Messrs Frank Watson’s December report. This gives Empire tobacco in pounds, January 1 to October 31, 1935, as delivered for borne consumption and for export, also stocks on hand according to Customs returns: — Leaf. Scripts. Union of South Africa 65,422 87,437 (Aprils 187,191 Northern Rhodesia .. 722,961 118.100 Southern Rhodesia .. 7,442,969 24,636 Nyassaland .. .. 7.558,608 2,834.046 British India .. .. 857,711 7.309,886 British North Borneo 396,593 Canada 7.329,049 1,112,572 Other Empire .. .. 131,663 18.416 Total, 37,105,7601 b. Withdrawals for home consumption and for export, October, 1935, were 3.939,1431 b, compared with 3,862.4131 b for the previous year. The clearances for home consumption of Empire tobacco were 22.58 per cent, of the whole. Stocks in hand. October 31, 1935. in warehouse of all tobaccos were 426.084.0001 b. It is thought that New Zealand's best chance of securing a footing might come from the blending of her tobacco, in the same way as the Indian leal is heavily blended in the manufacture of cigarettes. The Times, in a review of Empire tobacco, declares of New Zealand’s product: " There is little doubt that if sufficient quantities can be grown, the right, prices charged, and quality maintained, tins excellent leaf will form a serious rival in this country to other Empire cigarette tobaccos.”