DRIFTING TO DISASTER

Southland Times, Issue 21361, 6 April 1931, Page 9

DRIFTING TO DISASTER

STUPENDOUS LOSSES.

THE CHEESE INDUSTRY. THE WAY TO RECOVERY. ’ /

(By

T.C.L.)

The communications that have recently passed between the High Commissioner, Sir Thomas Wilford, and the Dairy Produce Beard are sufficiently serious to disturb the most complacent individual who has any interest in the New Zealand cheese industry. It does not improve matters to say that the High Commissioner’s cables announce exactly the attitude that many friends of the industry expected the British market would take in regard to the export of “standardized” cheese by the Dominion. Put bluntly, British merchants have intimated fairly clearly that they consider-the export of standardized cheese as “cheddar” is not playing the game—or worse. It has been proven beyond doubt that the standardized cheese exported during last and the present season has gone nearer to damning the whole output of the Dominion than it is pleasant to contemplate. Nor is it by any means certain that the mischief it has caused can be overcome and the industry ever recover the position it once held in the British market. The later history of the cheese industry is a tragic record of opportunities missed and foolish errors made. Twenty years ago the New Zealand product was a good one. It is true it was not as good as the best Canadian, but there was then no reason why it should not become so. The attitude of the London merchants was one of sympathy and interest in the development of the industry here, and their assistance and advice were given freely. The result was that in a few years New Zealand became a serious rival to Canada for best quality cheese, and on one occasion actually succeeded in obtaining better prices than the older Dominion. As an aid to New Zealand’s good fortune the Canadian output to Great Britain ceased to expand and this country obtained a leading position among suppliers to the United Kingdom on the score of quality as well as quantity. All the time the trade was growing the Dominion was warned that quality must be watched and various defects were, pointed out. On the whole it may be said that up to the outbreak of the Great War the requests and warnings from London were given full heed here. Relations with the merchants were cordial, and the quality of cheese exported, with few exceptions, was such as the Dominion could take pride in. The post-war unrest had its effect upon the dairy industry. A general influx of settlers meant an increase in supplies of raw material by more or less inexperienced farmers. Arbitration Court awards and other industrial agreements in regard to factory workers made it necessary for the work of manufacture to be speeded up, and for a variety of reasons the quality of New Zealand cheese deteriorated. At first the warnings, friendly in tone were not regarded as seriously here as was intended in. London, and quality did not improve. Then the problems of deflation had their effect. Dairy farmers looked for better returns, and a kind of madness seemed to lay hold of the industry. The way to more prosperity was, its leaders declared, to ignore the British merchant and for New Zealand to do its marketing direct. Everyone knows the dreary sequel—the abuse of the British traders who had done so much to assist the industry, the setting up of a futile Control Board, the attempt to fix prices and all the other blunders, for which the Dominion is still paying very dearly. At least the industry had the sense to turn its back upon that foolishness, and get back to the trading methods it had hitherto found so successful. Meanwhile the quality of the cheese exported steadily declined. Warnings from London were more emphatic, and prices began to sag. To most people it would have seemed an inopportune moment to try a general experiment. Yet the reply of the cheese manufacturers was to send a “standardized” commodity, which emphasized evils in existence and added some of its own. The result was twofold. While New Zealand cheese became definitely a lower grade article, Canada received improved prices for her output. It is not exaggeration to assert that the standardized cheese exported this season will have cost the Dominion at least a million, pounds in the decreased prices obtained. It has done more harm than that: it has roused the British merchant to seek other avenues of supply, an action which constitutes a graver menace to the New Zealand industry than seems to be recognized here. From every point of view the “standardized” experiment has been a ghastly failure. It has reduced New Zcaand cheese from a first class to a second class commodity in the eyes of the British public, and it has reduced its price accordingly. It should have been dropped with the utmost promptitude, and forgotten as soon as possible. Instead it was decided to increase the fat content and call standardized cheese “cheddar.” Some claim the new regulations eliminate nearly all the evils of standardized cheese. If that is so, why in the name of common-sense not drop it altogether and let the market know its wishes have been met? As it is, the industry has missed a golden opportunity of putting itself “on side” with the British public, and one wonders if those responsible are aware of the gravity of their action. Had the industry admitted its experiment a failure, dropped it, and got back to the supply of whole milk cheese, and set itself to improve the quality of that, it would have taken the first steps to regain the supreme position it once held in the London market. Instead, it has angered that market still further. It called standardized cheese “cheddar,” a word which denotes in Great Britain a whole milk cheese of high quality made on approved and definite principles. Naturally the results have been the bitter protest from the trade to which Sir Thomas Wilford has drawn attention and a saleable value far below that of the Canadian product. The harm done is incalculable. The unsatisfactory position of the cheese industry is self-evident. It is demonstrated only too plainly in the price obtainable for the New Zealand commodity in Great Britain, nor is it certain the end of the decrease in saleable value has been reached. Responsibility for this deplorable condition of affairs is divided. The supplier who expects first-class cheese from unsatisfaetdry raw material is an enemy to his own interests and to the Dominion’s reputation. The factory manager who speeds up manufacture unduly and is out for yield rather than quality is another, though possibly more blame .attaches to the directorate whose instructions he must obey. The Dairy Produce Board, elected to represent the industry as a whole, is still more to blame, for it failed to profit by the investigations made in Great Britain by its chairman, Mr lorns. It is quite true Mr Irons came back to New Zealand convinced that the manufacture of standardized cheese should cease forthwith, and that he indicated this in public. It is true, also that the board recommended its prohibition by regulation, but having done that it seemed to have exhausted its vigour and been contended to await results. Just when strong, determined action was most necessary the board showed weakness and vacillation. Had it made plain the facts upon which its conclusions were based no Government could have withstood the recommendation of the industry itself. Finally, the director of the Dairy Division of the Department of Agriculture must accept the responsibility for the advice he gave. Mr Singleton also had investigated conditions in Great Britain, and knew that all was not well. He had ; the best opportunity of any man of getting the industry “on the rails” again. Instead of doing so he chose, or allowed others to choose, a policy of trying to please all sections of the industry here. The ’new regulations attempted to improve standardized cheese instead of prohibiting its export, its name was altered to “cheddar", and once more were the wishes, of the buyers flouted. For, whether recognized here or not, the refusal to abandon standardizing was construed in Great Britain as a deliberate defiance of

the wishes of the consumer. The "control” campaign of six years ago, with its abuse of the British merchant and attempt to ignore his aid in marketing produce, had done much towards breaking down the goodwill that at one time existed towards the Dominion. When that foolishness was turned down a fresh start was possible and a renewal of cordiality might nave been achieved. Instead, British advice has been ignored until it has become recognized in London not only that the old happy relationship no longer exists but that New Zealand produce, that at one time could be accepted for quality on its face value, must now be regarded with caution, if not with actual suspicion. The effect is seen in the price offered for New Zealand cheese. But that is not all. Great Britain is turning to other parts of Europe for supplies. Already British capital is aiding the development of cheese manufacture there. The foreigner is sending his ablest students to learn on the spot what England wants and how it can be supplied. Moreover, Europe has the great advantages of proximity to the British market and of cheap labour, though not those of climate and soil that obtain in this country. Nevertheless the indications are that in a very few years there will be similar rivalry for the British cheese market as exists in regard to butter between Denmark and New Zealand to-day. In other words, the Dominion stands more than a chance of being pushed out of the British market by European competitors, or of holding only the position of a supplier of a lower, grade article, with remuneration based accordingly.

There is another danger. Due to the lack of uniformity and the deterioration in the quality of New Zealand cheese, the blender or grinder is seizing what is to him a wonderful opportunity of increasing his sales and extending his markets. He provides a very palatable cheese, under a variety of registered brands, devoid of rind but very uniform in quality. It is high time the industry awoke to its peril. It is no good accusing those who would warn it of ulterior aims or that they arc simply “crying stinking fish.” The industry is too important to be fooled away, but that ruin lies ahead unless different methods prevail is as certain as the American meat trade discovered a generation ago when it ran counter to British public opinion. Like the Americans, we must get back to beginnings and mend our ways. The supplier must send clean, fresh milk to the factory. There the aim must be high quality and the production of the goods for which the market asks. The Dominion has not hesitated to criticize the British manufac-turer-for failing to study the needs of the markets oversea and to urge him to do so. She should apply her own advice at home and send to London the cheese considered desirable there. Above all, there must be no “wangling” with names or methods of manufacture, and no more abuse of _ the British trader. With all that the Dominion can do the way back to the former esteem and confidence will be long and difficult, and whether the old cordiality will ever again be possible remains to be seen. Still, given a high class article, recognition that it is he who pays the piper calls the tune, and that ordinary commercial integrity, principles and practice are all that are necessary for its welfare, the cheese export trade may in time regain the supreme position it once held in the London market. But reform must begin forthwith, and effort never slacken if disaster is to be prevented.