BUTTER DEARER

Otago Daily Times, Issue 23672, 2 December 1938, Page 10

BUTTER DEARER

RISE OF TWOPENCE CASH PRICE NOW 1/6 PARITY WITH EXPORT RATES The retail price of first grade patted creamery butter was advanced yesterday from Is 4d to Is 6d per lb, the increase being due to the raising of the guaranteed price of butterfat to the farmer for the current season. The price delivered or booked is now Is Whey butter has also advanced in price in the same proportion, the cost to the customer now being Is 5d Butter has always fluctuated in price, depending, before the Government took control, on the price gained overseas, but this increase is the largest single one for some years and brings the price higher than it had been for at least eight years The new prices were announced on Wednesday evening by the Minister of Marketing (Mr W Nash) The price has been fixed by the Government to the wholesaler at Is and Is 4id, He cannot sell for more or less, and the retailer’s usual trading margin of twopence a pound to cover his costs and his profit brings the rate up to the figures stated. The extra cost will pass into the Government’s Dairy Industry Account from which it will be paid to the farmers. The Government has been carrying a loss on the local market since August. It may be some consolation to the housewife to recall that she has escaped paying for some time the higher prices that have accrued from butter sold for export. The new season’s guaranteed price became operative from August 1. the rise being 1.23 d a pound. This higher price has not been passed on in New Zealand until now.

Grocers and dealers throughout the Dominion have been pressing the Minister to announce the new local rates, but he stated last week that he was awaiting the completion of the task of gathering information concerning the amount of butter held in cool stores.

REMINDER TO RETAILERS THE GOVERNMENT’S POWERS SUGGESTION OF UNFAIR PRICES (Per United Press Association' - WELLINGTON, Dec. 1. A published report that some grocers were intending to charge Is 7d per lb for Gutter over the counter was brought under the notice of the Minister of Marketing (Mr W. Nash), who described this price as altogether too high and unfair when compared with the rise in wholesale rates. Mr Nash pointed out that the Government had power to fix the price to the consumer as well as the wholesale price, but he added that up to the moment it had not contemplated any action. WELLINGTON PRICES LACK OF UNIFORMITY CRITICISM OF GOVERNMENT’S POLICY (Special ro Dailv Times) WELLINGTON, Dec. 1. The new retail price of butter in Wellington from to-day will be Is 6d per lb in some shops and Is 6£d in others. “ Our price will be advanced from Is 4d to Is 6d per lb as from noon to-day.” said he managing-director of one group of Wellington stores carrying on both cash and credit business. “I will not say that that will be the final price,” he added. “It may be increased to Is 6Jd if an agreement is come to by Wellington retailers. As a matter of fact the gross profit of lid per lb we will be making henceforwards on the increased wholesale cost is barely sufficient to pay wages without allowing for other items in our overhead. The profit of T|d per lb on the cost of Is 4Jd means a margin of only 9 per cent., whereas we should be entitled to at least 12£ per cent., which would represent an increase of 2d

“Another appreciable difference has been made by the fact that the butter now comes to us packed in cartons instead of in wooden boxes,” he added. “It is impossible to dispose of the cartons, but previously we could obtain 9d each for butter boxes. On a weeklv turnover of, say. 100 boxes, that meant an additional weekly profit of £3 15s All these factors should properly be taken into account when die final retail price is fixed.”

One of the directors of another Wellington grocery company said that Government control of the internal butter market had caused the price of butter to be considerably higher than it should be. “We must set our new price at Is 6Jd per lb.” he said, “but if we could continue as we formerly did and buy butter in bulk at the guaranteed price and wrap it ourselves we could retail it at Is 5d per lb and make a slightly greater profit than we can make from it to-day In other words, the price of buttei is now lid per, lb higher than it should be. “It is obvious that the guaranteed price is too high and that the Marketing Department has increased the wholesale price in New Zealand in order to recoup some of the losses that it anticipates making in the guaranteed price account.” he continued “One also wonders why the new wholesale price was not put into force when the new guaranteed price was announced some time ago That and other questions require an answer.” RESTAURANT PRICES NO INCREASE CONTEMPLATED (Special to Daily Times) WELLINGTON, Dec 1 Wellington restaurant proprietors stated that the increase in the price of butter would not be handed on to the public in the form of higher prices for meals. “As far as I am concerned there will be no increase in charges for meals on this occasion,” said one proprietor, “ but if the price of other foodstuffs rises, then higher charges will be forced on us. We recently added a surcharge of one penny to the meals to cover the increases in the costs of foodstuffs, and for that reason it. will not be necessary to alter the meal prices yet. There is not doubt, however, that Wellington caterers are sailing very close to the wind under the present conditions."

CHRISTCHURCH PRICES NO UNIFORMITY AT PRESENT EARLY STABILISATION EXPECTED <Per United Press Association) CHRISTCHURCH. Dec 1 The new r retail price for butter has not yet been fixed by the grocers in Christchurch, but it is likely that there will be stabilisation within a few days. In the meantime there are different prices The rise in wholesale prices, which was announced by the Minister of Marketing (Mr W Nash), will mean some rise in the retail price.

Retailers do not fear that the increase will mean much curtailment in business, but every penny on the price means that there is a certain amount of economising by housewives. Retailers recall, however, that butter sold with little change in volume when it was as high as 2s 3d.

The retail profit made on butlei recently has been very modest, most retailers claiming that it has not paid expenses, but as butter is a line which every grocer must carry there is no escaping the position. In most parts of New Zealand butter has been at one time or another the subject of price cutting, and at times when price cutting has become fierce grocers have had o sell below cost. With the fixing of the wholesale price, retail prices in most centres have been stabilised, but competition among the grocers has kept the margin of profit very low.