Importing Of Tea Being Handed Back To The Merchants

Otago Daily Times, Issue 27389, 15 May 1950, Page 4

Importing Of Tea Being Handed Back To The Merchants

The importing of tea for New Zealand will be handed back to private enterprise as soon as possible. Since 1942, tea has been bought in bulk by the Government. When present stocks (including tea purchased and due to arrive) are exhausted in about four or five months, the Government will hand the tea importing business back to the private traders. This information was given the Daily Times last night by Mr L. M. Wright, of Dunedin, who has been adviser to the Government on the purchase of tea since 1942. He recently returned from a buying mission to Ceylon and India on behalf of the Government. Mr Wright was commenting on the article “ Tea Importations ” published in the Daily Times on Saturday.

Replying to the inquiry if the recent advance of Is 9d a lb represented the subsidy previously paid by the State, Mr Wright said that this was the average subsidy that would have been paid on the tea purchased and due to arrive. When the devaluation of sterling occurred last year, tea prices in Ceylon advanced quickly by more than 2s a lb, and for several months the subsidy required in New Zealand was approximately 2s lOd a lb. “With tea prices varying as much as 9d to Is a lb in a week, both up and down, over the past nine months, it is at this stage impossible to say what the price of tea will be to the public when private enterprise operates again in several months’ time,” Mr Wright said. “It is entirely incorrect to say the whole country was in ignorance of the quantity of tea purchased. The New Zealand Tea Packers’ Federation, which handles more than 90 per cent, of all tea consumed in New Zealand, was fully acquainted with the quality purchased and it agrees that under present conditions, such as shipping delays, etc., it is necessary to secure four to five months’ stock to meet the public demand. “ It is correct, as reported, that prices have dropped considerably over the past two months, and this is due entirely to Britain (which purchases more than half the total world tea crop) refusing to buy at the prices asked by Ceylon and India, thus leaving for sale at weekly auctions more tea than the rest of the world could absorb. Britain has concluded a contract this week after months of negotiations. New Zealand has been buying at each weekly auction until two weeks ago, and certainly did not buy all her requirements at peak prices, as stated. “ The merchant who was interviewed in his comments on the quality of tea imported was certainly astray in his facts. It has been the policy of both the present and also the previous Government to purchase qualities of teas for private traders similar to the teas they imported before the war. This quality is normally about Is a lb above the grade and brand referred to. “ In assessing the price at which tea could be sold to the public, the merchant who was interviewed nominated 4d a lb as the combined margin for wholesaler and grocer. This can best be substantiated by merchants and grocers who will know if this is equitable.” In conclusion, Mr Wright said that he fully agreed that private enterprise should be allowed to function but he mentioned that both Britain and Australia were still “ government-buying.” As a result of fortunate bulk buying in 1949, he added, more than £500,000 was saved the New Zealand taxpayer.