DECISION RESERVED

Otago Daily Times, Issue 27221, 26 October 1949, Page 8

DECISION RESERVED

APPLICATION FOR INCREASE PRICE OF LOAVES UP TO 2LB PA WELLINGTON, Oct. 24. The Price Tribunal to-day concluded the hearing of the application by the New Zealand Federation of Bakers and Pastrycooks for an increase of id in the prices of loaves up to 21b in weight, decision being reserved. To-day’s sitting was occupied with a reply by the federation’s representative, Mr H. M. Rogerson, of Auckland, to the case presented by the Director of Price Control, Mr H. L. Wise, on behalf of the Price Control Division. Mr Rogerson submitted that the division had failed to make an industrywide survey. Its eiiorts, he said, were of very little value compared with the survey presented by the federation. Mr Rogerson contended that the federation’s evidence completely refuted Mr Wise’s statement that “ a number of the proprietary bakeries in the larger centres are operating at a fairly satisfactory profit and, in some instances, at a substantial profit.” The average tax-free profit for the seven large, companies considered was 2.3 per cent., calculated on book values, with no loan capital included, said Mr Rogerson. From this the, companies had set aside the necessary appropriations for substantial shortages in replacement funds and for emergencies and contingencies. If these allowances were made from the miserable return of 2.3 per cent., said Mr Rogerson, it was obvious that there would be a minus quantity left for the shareholder. Mr Rogerson, referring again to the division’s statement regarding satisfactory profits, said: “It is statements such as this which are undermining the confidence, of the industry in New Zealand in the administration of price control by the division. That statement is contrary to fact and should not have been made. Experience has shown that, in addition to giving an incorrect picture of the trade at the period under investigation, the division is also far too optimistic with regard to the future, and the industry is suffering now as a result of the division’s Incurable optimism." « Quoting differences between the division’s estimate and the actual percentage profit of Walter Buchanan. Ltd., an Auckland bakery, for the financial year ended March 31. 1949, Mr Rogerson said: “ I need hardly •say that it is recognised that the figures and estimates submitted by the division are put forward in all good faith. That makes them all the more dangerous. They arise from insufficient knowledge of the trade and from complete unjustified optimism. It is vital to the industry that the tribunal should not be innocently misled.” ■