PICOT PURCHASE

Wanganui Chronicle, Volume 87, Issue 28, 4 February 1943, Page 3

PICOT PURCHASE

EXPLANATION BY PRIME MINISTER (P.A.) Christchurch, Feb. 3. Remarks made oy Mr. Horace Herring (Democratic Labour candidate) at a political meeting in the Christchurch East by-election were replied to to-day by tne Prime Minister, the Rt. Hon. P. Fraser. "His comments aoout what he called ‘the Picot deal’ were so lar astray trom the truth that it is necessary to put the facts straight,” Mr. Eraser said. "Mr. Herring said that Mr. Picot’s produce business in Wellington was nought for £65,000 and that Picot was appointed director of internal marketing at £2OOO a year. 'What did the £6u,000 pay for?' Mr. Herring asked, and replied: ‘The freehold ol a very awkwardly situated building in Wellington.’ Then he added: ‘That after the money was paid difficulty with the outter patting machine was discovered, and accordingly it was decided to erect a new building in a more suitable position.’ “The purchase of Picot Brothers Ltd. ana Picot's (Palmerston North) was completed six years ago. The total payment made to the two companies was l7s 6d, made up in round figures as follows: Freenold property, including the building in Wellington, £28,00(1, which was the Government valuation (the land is still a valuable asset); stock in trade, £12,600; motor vehicles, £2550; goodwill, £1500; and an allowance for loss on the collection of book debts; total £63,150. The balance of approximately £2BOO was made up by sundry items of equipment, portion of insurance premiums and fees; therefore the assertion that the Government paid £65,000 for an unsuitable building is palpably incorrect. The amount was paid for two businesses as a going concern, with branches in Wellington, Palmerston North and Hastings. The Hastings branch was sold shortly afterwards to Hawke's Bay Co-opera-tive Farm Products, Ltd., and payment of a goodwill of £lOOO was received. Manawatu Co-operative Farm Products recently took over the Palmerston North branch of the business. Tile balance of £19,000 goodwill and book debts have this year been written in the office balance-sheet.

"Since the inception of the Internal Marketing Division, the Thorndon trading branch, which is the actual business sold by Picot Bros. Ltd., together with its Palmerston North □ranch, has made a profit of £58,0d0 for its five years of operation. While the building is now insufficient to meet the heavily increased demands on jts use the whole of the Wellington egg and butter distribution is carried out from the premises. No butter-patting equipment was sold with the building, as Picot did not pat butter prior to the Government taking over the business

“It is true that Picot was appointed Director of Internal Marketing at a salary of £2OOO a year for five years, and his contract expired in February last year. I feel that it was only a sense of national duty which compelled him to take on his new and onerous duties in the supply department without additional remuneration. I do not hesitate to express admiration of Mr. Picot’s services for the State. When he oined the Government service he relinquished his post as director of at least a dozen business concerns, and in many ways he has proved his merit."