PRICE FIXATION

Timaru Herald, Volume CXL, Issue 20217, 19 September 1935, Page 8

PRICE FIXATION

COMMERCIAL TRUSTS AMENDMENT

MATTER DISCUSSED At the August meeting of the South Canterbury Chamber of Commerce, a discussion took place in committee in regard to the Commercial Trusts Amendment Bill, but no decision was reached, further discussion being held over until last night's meeting. When the matter came forward, the president (Mr G. H. Andrews) said that he did not think they could do anything, as the Bill was before Parliament. In any case, the Associated Chambers had the matter in hand. Mr J. Norrie asked if the Bill had actually come before Parliament. The Associated Chambers had taken evidence, but they had taken it from one side only. He was particularly interested in the matter, because if the Bill went through, he would be affected in his business. Mr Norrie mentioned that in 1927 what was known as the P.A.T.A. (Proprietary Article Traders’ Association) came into being, their idea being to control the price of proprietary lines and foodstuffs. Evidence was taken, and the outcome was that the P.A.T.A., was not allowed to operate. Manufacturers had not been allowed to fix the price of foodstuffs, but the proposed amendment would enable them to do so. The price of price fixation would be detrimental to cash and carry businesses, because their sales would drop considerably. The cash and carry firms had been called price-cutters, but he could prove that the other firms were the cutters.’ He mentioned one particular line which was one of the best sellers in New Zealand. The manufacturers had a method of sending goods on consignment, and even if he was prepared to pay cash, he could not go and demand the goods, because they belonged to the manufacturer. These goods cost 13/- a dozen tins, plus tax, and with the discount it worked out at 13/4 a dozen. The retail price was 1/4 a tin, which left the storekeeper a profit of 16 2-3 per cent, on turnover. The average overhead in the service store work ■M out at 15 per cent, so they were no. left with very much of a margin. The average overhead of the cash and carry store ranged between 6 and 7i per cent. They had to sell the particular line at 1/4, so they could make a good margin of profit. Therefore the cash and carry man was not the cutter but the other man. Mr Norrie said he was against selling at cost price. He was of the opinion that it would be better for the Government to bring down a system which would prohibit a man selling below a certain margin of proflti The Associated Chambers had issued literature on the subject, but he thought he was justified in making some form of protest. The manufacturers themselves were to blame to a large extent for the price-cutting that went on today. Mr G. D, Virtue said that he had to correct Mr Norrie when he said that the Associated Chambers had rushed into the matter. The matter had been under review for the last three years. Various meetings had been held, and reports had come before the Chamber, and they had passively agreed to them. He appreciated Mr Nome’s position, but in view of the fact that the Associated Chambers had been dealing with the matter for three years, he did not think they could be charged with having rushed into it. Mr Norrie: What I say is that they have only taken evidence from interested parties. The president: Have you evidence of that? Mr Norrie: I am only going on the pronouncements they have made. It was eventually agreed that Mr Norrie and the secretary should draw up a report to be .orwarded to the Associated Chambers.