PURCHASE OF COMPANY

Otago Daily Times, Issue 27568, 9 December 1950, Page 8

PURCHASE OF COMPANY

Protection Against Vested Interests

MEAT BOARD’S PROPOSAL

Special Correspondent WELLINGTON, Dec. 8. The New Zealand Meat Producers’ Board in a statement published today set out the economic background to its proposal for the purchase of a wholesale meat outlet in Britain. At the same time, the board has stated that until the proposal assumes a more definite form and has been thoroughly discussed the board will reply to no criticisms or statements. The board’s .statement read: “The dominant reason for the Meat Board’s decision to enter into an agreement to purchase a wholesale meat distributing agency in the United Kingdom is the justifiable fear that when a free market for meat is restored in the United Kingdom it will more than ever before be under the control of large vested interests.

“In pre-war days there were 60 firms importing meat into the United Kingdom from various exporting countries. In addition there were more than 1000 firms engaged in the business of wholesale distribution of both home-killed and imported meat. However only a small number of these firms handled New Zealand meat. “ Since the outbreak of the war all imported meat has been handled on behalf of the Ministry of Food by Mindal, an organisation set up at the request of the Ministry by the 60 importing firms. Briefly, the services carried out by Mindal consist of unloading meat at docks, clearing it by road or rail to cold storage or other depots, and storing it until it is handed over for distribution. Wholesalers, again at the request of the Ministry, formed themselves into eight regional wholesale meat supply associations. The duties of the associations are to distribute both home-killed and imported meat to retailers. Firms Not Active

“As a result of this amalgamation and control, meat importers and wholesale meat distributors have ceased to function as individual firms so far as meat distribution is concerned. They do, however, receive a share of the handsome profit earned by Mindal and WMSA,- which enables them to keep the business alive if not functioning. For 11 years they have taken no active part as firms in meat, distribution, and as a result their executive officers are geting old, tneir rank and file staff are working for the Government or have found positions outside the trade, and no new staff is being trained to carry on this highly specialised business if it should ever be restored to its pre-war basis. “ This position particularly affects smaller concerns, as, unlike larger companies, they have no other activities to keep their staff usefully employed. The large overseas interests are in a better position to resume normal trading, and there is little doubt that they will eventually be m a more dominating position than they were before the war. This would detrimentally affect those New Zealand companies and co-operatives which have to find an outlet for their meat, would prejudice the open door policy and generally lead to a reduction of competition in New Zealand. Overseas Interests Predominate

“ Overseas interests at present control 69 per cent, of our exportable surplus of meat, leaving 31 per 'cent, under control of New Zealand-owned companies. In the North Island, the situation presents a serious picture. Overseas interests control 78.6 per cent, of export meat of the North Island, leaving only 21.4 per cent, under the jurisdiction of New Zealand-owned concerns. In the . South Island, the position is much better, the. figures being 49.6 per cent, overseas interest, and 50.4 per cent. New-Zealand-owned. From these figures producers will understand why the board s partners in the proposed undertaking are predominantly South Island, It is, of course, understood that the whole project relates to meat, and meat alone. “Having studied the position in the United Kingdom, the board fears that it may not be practicable to carry out its policy unless steps are taken to strengthen the position of New Zea-land-owned companies, selling in the United Kingdom. Producers may recollect what happened in the Argentine when the meat trade there came under the control of large companies. They had to build works and eventually to set up an agency in London to sell its output. The result is. that today the Argentine has an independent selling agency in the United Kingdom while we have none. % Advantages of Scheme

“The foregoing is, generally speaking, the background of the board’s decision to take this vitally important step in the interests of the producer. It is a necessary corollary to the board’s powers under the Meat Export Control Act, 1921-22. It will (a) ensure an open door for meat consigned on its own account; (b) enable us to ensure that prices realised overseas are a fair criterion of the market; (c) place us in a' stronger position than before the war by having our free meat sold through one agency (d) ensure the board having first-hand information of the day-to-day prices of meat on the United Kingdom market, thus enabling more effective check to be kept on local competition and meat schedules; (e) give first-hand information on which to base our policy if we have to use our accumulated funds to support a falling market and greatly strengthen the board’s position with regard to its policy of checking further overseas control of our meat-, trade.”