PRICE ARRANGEMENT

Taranaki Daily News, 17 October 1935, Page 11

PRICE ARRANGEMENT

PURCHASE OF DAIRY COAIPANIES.

DETAILS OF THE APPORTIONMENT. (By Telegraph—Special Reporter.) Wellington, Last Night. Arrangements have been completed for the sale of interests in the two proprietary butter companies at Wanganui to the six co-operative butter companies operating throughout the Wanganui district. The purchase price is to be apportioned among the co-operative, companies on the basis of the additional quantity of cream diverted to their factories from the proprietary concerns. In the negotiations leading to the sale the parties concerned have had the advantage of the help and advice of the Executive Commission of Agriculture and a sub-committee of the Dairy Board. Between the co-operative companies boundary agreements have been completed with the object of prevention of overlapping of cream collecting services. With the object of discussion on overlapping cream collections and a general . investigation of methods for improving quality and reducing costs of production, in the Wanganui district the Executive Commission of Agriculture, accompanied by a sub-committee of the Dairy Board, some weeks ago visited the district at the invitation of a number of dariy factory companies operating there. The co-operative butter companies in the district are Okoia (nea- - Wanganui), Wangaehu (at Wangaehu), Rangitikei (at Bulls), Rata (at Rata), Raetihi (at Raetihi) and Taihape (at Utiku). In addition there are two proprietary butter companies in the city of Wanganui, the Wanganui Freshfood Company Ltd. and the Aramoho Dairy Company. 1 At the first meeting it was generally recognised that the number of butter manufacturing companies operating in the district was excessive and that the operations of the two proprietary factories caused a considerable amount of overlapping of cream collection, not only between the proprietary factories and the co-operative factories but among the cooperative companies themselves. It was decided that the commission in association with the Dairy 'oard, should enter into preliminary negotiations with the owners of the proprietary factories for the sale of their interests to the cooperative companies, a proportion of the purchasing price to be paid in each case by each co-operative company on the basis of the quantity of the cream accruing to that company by reason of the diversion of cream from the proprietary factories. It was pointed out to the representatives of the co-operative companies that the acquisition of the interests of the proprietary factories would enable the co-operative companies themselves to make boundary agreements, and. re-ar-range their cream collection services in such a way as to effect a reduction in collection costs and ensure the earliest possible arrival of cream at the' respective factories. The accretion of additional supplies of cream would be reflected in lower manufacturing costs per pound of butter-fat, for no additional plant would be required in the majority of cases to handle the increased output. The negotiations were carried on by the Executive Commission of Agriculture, and a further meeting of the cooperative companies was held at Wanganui last Friday, when a preliminary agreement was signed by the representatives of the co-operative companies and of the proprietary companies, by which the interests of the two proprietary companies were acquired. It was agreed that the final apportionment of the purchase money among the purchasing companies would be made next year, when it would be definitely ascertained what part of the cream at present going to ffie proprietary companies had been diverted to the respective co-operative companies. Mr. A. Howarth, Wanganui, and Mr. R. Dalziel, Rata, were appointed trustees to arrange the details. The agreement provides that the purchase is to be completed within 14 days from a date to be fixed by the trustees, such date being not later than November 1. Subsequent meetings of different groups of the co-operative companies interested were held at which representatives of the commission and the board were present, and boundary agreements were entered into by the companies and arrangements made for the revision of their cream collecting services. Member? of the commission and the board expressed their satisfaction at the genuinely co-operative spirit that had actuated the companies and which had enabled agreements to be made that were regarded as mutually satisfactory and beneficial to the suppliers of the district. In order to obviate any hardship being imposed on the suppliers of the cooperative companies whose cream would under the boundary agreement be diverted to another company it was agreed that share capital would be repaid to them in full by th? companies from which they were transferring.