The Wanganui Chronicle. MONDAY, JUNE 28, 1943 THE SELLING END OF THE MEAT BUSINESS

Wanganui Chronicle, Volume 87, Issue 150, 28 June 1943, Page 4

The Wanganui Chronicle. MONDAY, JUNE 28, 1943 THE SELLING END OF THE MEAT BUSINESS

"pHERE is no profit to be had in any transaction until the product has been sold. The man who neglects the selling end of his business is marching straight to bankruptcy. This is a self-evident fact in respect to a trading concern, but it is not as patent in manufacturing or farming. The demand is there' and must -be satisfied, and demand creates the level of prices at which the product will be bought. That is a common argument. It is correct insofar as it goes, but it doesn’t necessarily go all the way.

Demand only fixes the level of prices when there is a condition of free competition in the market between producer and consumer. A. farmer, who is a manufacturer of food and raw materials, can, not sell to his consumer in the United Kingdom. The farmer must rely upon agencies other than those under his own control. Those agencies must operate outside, his own country so they cannot be controlled effectively by the Government of this country. It is, for instance, an easy matter for a subsidiary company in New Zealand to sell to the parent company in London at a nominal rise above purchase price, leaving the parent company to make a fuller margin of profit on resale to the retailer. It would be difficult for the New Zealand Government to discover the percentage of total profit which is collected by the subsidiary company in New Zealand and that which the parent company takes in London.

The policy which prompted the establishing of the New Zea land Meat Produel’s’ Board was to maintain freedom for the product of the New Zealand meat producers. The intention was to see that New Zealand meat went direct to the consuming market, without control by external interests. The first step in controlling the product was to secure the free access to the freezing works for those producers who desired to send their own produce to England on their own account. So concerned were the producers of New Zealand at the time the Meat Board was set up that it was declared that foreign interests would not be allowed to secure a hold refrigerating industry, and to that end no foreign interests should be allowed to purchase meat works in New Zealand. The post-war conditions revealed that there were too many meat works within the Dominion for them all. to operate successfully. The post-war period was, consequently, favourable for the infiltration of foreign interests into the refrigerating industry and it was not long before the policy of the Government and the Meat Board was reversed and the meat works at Wairoa, Hawke’s Bay. were transferred to other than New Zealand interests. Mr. IT. Atmore, speaking in the House, of Representatives, asked why this change of policy had been made, but he failed to elicit from the then Minister of Lands anything more than the insinuation that it was the Meat Trust, interests which were prompting the opposition to the transfer which was about to be sanctioned. Since that time, despite the Meat Board’s continued existence, further transfers to outsider interests have been sanctioned, with the result today that a member of the Electoral College, who by reason of his office should be able to speak with some authority on the point, is able io declare that 70 per cent, of the Dominion’s meat is now handled by overseas interests. On the assumption that Mr. Lloyd Hammond’s statement is correct, it can be said that the Meat Board has not only failed in its primary object, but that it has opened the flood-gate to let in foreign control of the meat, industry. The problem of marketing meat is no simple one. 'The processing of meat—that is the slaughtering, freezing, shipping and hand-

ling at. the consumption end—present no highly technical difficulties. But it is also true that the processing from the commencement of operations to the delivery to the retail shops involves a heavy expenditure of capital and the marketing of the product must also be undertaken within a limited period, for meat cannot be held indefinitely in the refrigerating chambers. A heavy capita] expenditure in the first instance makes it imperative that there shall be an adequate through-put at the works, and further large scale financing is required to ship and sell this product which has but a limited “life.” Obviously, if a very wealthy company secures a freezing works within New Zealand it can immediately outbid its competitors under the cover of an excuse that it is securing its economic through-put at the works. But it can at the same time outbid its financially weaker competitors and so for the time being confer a benefit upon the farmers from whom they purchase, The farmers are induced by this process to assist in the constriction of the marketing of their own produce. Once the flood-gate was let down it was a simple mailer for other large-scale operators to ask for similar treatment with the interest that had already secured control of a freezing works in New Zealand, and consequently Mr. Lloyd Hammond’s statement will occasion no surprise to-day. The meat producers of this Dominion must conjecture what their position would be were they to become solely dependent upon a market exclusively in the hands of interests whose controls are outside of New Zealand. The probability is that the fat stock buyers would be buying on a schedule of prices which had been drawn up in London or Chicago, which schedule prices the producers would have to accept because there would be no alternative market to which he could turn. The farmer who now thinks that he will succeed in making quick money in a few years and getting out of the industry before such set of conditions rule in New Zealand is gambling on short odds if the present condition of the industry becomes intensified. Those who are taking the longer view of the industry, who are farmers in the real sense and not gamblers, can contemplate with whatever satisfaction they can extract from the situation the lack of enthusiasm which marks the conduct of those primary producers who have been asked by a Dominion Government to accept the benefits of orderly marketing—as Governmental control is termed—for their products. The producers can go further and ask themselves what their condition will be if the meat market of the Dominion is brought to a state of complete orderliness to the orders of Big Business in distant parts of the world.