SUPPLIES OF TEA

Timaru Herald, Volume CXLVII, Issue 21504, 17 November 1939, Page 6

SUPPLIES OF TEA

Minister Explains Price Increase Fresh Stocks Arriving By Tplepraph—Press Association WELLINGTON. November 16 “There are ample supplies of tea for immediate needs in New Zealand,” said the Minister of Industries and Commerce (Hon. D. G. Sullivan) in a statement this evening. He added that the shortage experienced by retailers had not been caused by any holding up of sterling supplies for the importation of tea. The Government had at all times made provision for the release of sterling for the purchase of tea, but it had no control over the output of Ceylon. 80 per cent, of which had been commandeered by the British Govem T ment.

Mr Sullivan added that an artificially stimulated demand, in plain language a panic demand, for the purpose of hoarding arose when hostilities broke out. Due to this demand stocks of tea were admittedly depleted a.t a much quicker rate than was normally the case. This doubtless contributed to the shortage of supplies released for retail sale.

Another factor operating, said the Minister, was the commandeer by the Briitsh Government of 80 per cent, of the output of India and Ceylon. This necessitated cancellation of tea sales, and it also had the effect of materially increasing prices. An adjustment as between Ceylon and the British Government had not been made, and tea sales had been resumed.

To proetet consumers, Mr Sullivan said, the price stabilisation regulations gazetted on September 1 fixed the price of tea, together with all prices at the level existing on August 31. Since that time and until the replenishment of stocks became necessary the price remained the same. The Minister then went on to deal with the saving which had been effected to consumers by this action. If the Government permitted tea to rise in price by 6d a lb, as had been done in Australia in the first week of the war, the public would have had ti pay an additional sum of £14,960 for the period between September 8 and October 5, and from September 8 to November 2 a total of £25,931/13/- had been saved. Tea in store on September 8, added Mr Sullivan, was 2.485,7051 b. Due to the panic demand it fell to 1,887,2821 b. in a week. Subsequent weeks had shown a reduction to approximately 130,0001 b. Now stocks had to be replenished from overseas, and increased oversea prices had to oe met, he continued,“ together with the added cost of freight and insurance. After a careful investigation of all the factors, the Price Investigation Tribunal had agreed to increases covering the actual increase in cost and nothing else, said the Minister. He concluded by referring to the amicable relations between the Price Tribunal and the trade, and said that now that an increased price had been permitted and the position clarified, stocks of tea should be available for retailers. Old stocks were depleted, but fresh stocks had arrived or should arrive in the near future.