CONTROL OF MARKETING

Taranaki Daily News, 18 July 1933, Page 7

CONTROL OF MARKETING

PROPOSALS FOR REGULATION FAR-REACHING SUGGESTIONS MADE PROHIBITION OF FORWARD SALES. IMPORTERS TO BE AGENTS ONLY. Far-reaching proposals for the control and regulatiofi of the marketing of New Zealand butter and cheese have been, approved by the Importers’ Association in London and submitted to the New Zealand Dairy Produce -Board through the chairman, Mr. W. A. lorns. The proposals have not yet received the consideration of the board, but copies have been circulated to agents in the trade. The proposals, which are in the form of 10 resolutions stated to have been passed unanimously by the association, include a clause interpreted to mean control of f.o.b. and c.iL selling by the Dairy Board. Two other clauses are designed to prohibit forward selling, against which vigorous protests have been made in Taranaki more than once this season on the grounds that it has had a very harmful effect on prices, especially on a weak market. The proposals are:— “The export of all butter and cheese from New Zealand to be under license granted by the New Zealand Dairy Produce Board to importers approved by the board jointly with the Importers’ Association, such importers to be consigning and selling agents only as far as New Zealand dairy produce is concerned, that is, they may -not buy in New Zealand or afloat on their own account; all sales f.o.b. or C.Lf. to be on factories’ account. PRODUCE ALLOTTED BY BOARD. “Butter and cheese to be allotted by the New Zealand board in co-operation with factories, the -board to have the final decision in the allocation, but importers, in the event of any change, to have the opportunity of discussing this matter with the board before such allocation is completed; no canvassing to be allowed as from a date agreed upon between the board and the association. “Accounts to-be subject to verification as and when required by the board’s accountant; if any importer desires independent verification, the board to be willing to grant it, but it will be at the importer’s expense.- - .x- .. “No importer holding license to sell New Zealand dairy produce ‘short.’ “No sale of butter and cheese on consignment after the date of the bill of lading to be made until official notification of commencement-, of discharge. “Where sales are mad a through brokers, the .buyers’ names to be disclosed and goods to be invoiced direct. A list of accredited brokers to be made by the association in conjunction with the board, t “Existing contracts .not to be interfered with. "Commission on landed sales to be not less than 2J per cent. c.Lf., and f.o.b. sales not less than li. per. cent “The agents are prepared to contribute to an advertising-scheme equitably to the amount spent by the board not exceeding a halfpenny a box of butter and one penny a crate of cheese. "Any dispute between a licensed agent and the board to be settled by arbitration under rules to be formulated and agreed.’’ FATE.OF AGENTS IN DOMINION. The first resolution apparently* proposes a'control of "export by the'board with importers acting solely as agents in the disposal of butter. The stipulation that they may not buy in New Zealand or afloat on their own account appears to indicate the removal of their organisation at this end, but this point is not clear, and agents are at present in communication with their principals. The provision “all sales f.o.b. or c.Lf. to be on factories’ account” apparently requires further explanation. It has been interpreted as a continuance of the right of factories to make individual sales and in another quarter as control of f.o.b. and c.i.f. selling by the Dairy Board with the ultimate; elimination of this business altogether. In; the second resolution is apparently a proposal that the board will average out the produce handled by the importing firms over a period of years and will then allocate the output pro rata. There appears to .be no suggestion that those handling New Zealand produce should necessarily be confined to members of the Importers’ Association, although it is suggested that the association may be seeking this privilege. SELLING POLICY AFFECTED. - The fourth and fifth resolutions have a very important bearing on the selling policy and are apparently designed to obviate causes that are claimed to be responsible' in part for weakening the London market. It is stated that selling “short” by operators who do not possess the produce has enabled them to “bear” the market, and buy in at a lower price. Thus the contract can be fulfilled at a profit. The fifth provision prohibits forward selling. It is stated that sales have been made on-consignment a week or more before the discharge of the cargo at prices below the ruling market rate. This has had a very harmful effect, - especially on a weak market. The provision with regard to brokers differs from the present state of affairs as it will be necessary to disclose the buyer’s name. The seventh resolution apparently refers to contracts made between a merchant and a factory under which the former handles the factory’s output in return for money lent to the company or some other consideration. The rate of commission mentioned in the eighth resolution is about equal to that now ruling. The current'low prices for produce, however, have reduced the amount of commission considerably. Up to the' present agents have contributed little to publicity costs. On the basis of an annual export of 100,000 tons of butter and . 80,000 tons of cheese, an expenditure by agents of about £13,000 is contemplated.