DAIRY BOARD DISPUTE.

Waikato Times, Volume 103, Issue 17411, 25 May 1928, Page 11

DAIRY BOARD DISPUTE.

MR GROUND’S ATTACK. ON THE BIG OOMPANY. WHY MR GOODFELLOW RESIGNED The dispute in the Dairy Produce Board which led to the resignation of Mr William Goodfellow arose largly from criticisms made by Mr W. Grounds, chairman of the board, in the last issue of the Exporter. Mr Grounds vigorously attacked the New Zealand Co-operative Dairy Company, Ltd, for its tardiness in sending the information required for the new export licenses and thus weakening the whole system. He also denounced the company for forming a new selling organisation, saying that this could not be accepted as an alternative to consolidation under the hoard and that it created further divisions. Mr Grounds’ statement is (in part) as follows: — “When the board was preparing its working plan for absolute control, the Australian system of surveillance under license was constantly urged by board opponents as, an alternative. This procedure has been adopted in the existing license conditions, with an additional relaxation in the matter of time in which returns have to be submitted. Emboldened possibly by the breakdown of the board’s original policy, some of these former advocates of the Australian scheme now want none of it. They would smash any form of producers’ organisation. Big Company’s Position. ■->

“While efforts have been made in some quarters to misrepresent the actions and objectives of the board, there have been but few objectors among factories to the course taken. In common with most other companies,, acceptance of the conditions had come forward promptly from the New Zealand Dairy Company, signed by the chairman and secretary, without indication of any objection, and circumstances encouraged the hope that when individual oppositions had time to cool, the new method of surveillance of returns would get a chance of being reasonably tried out. We believe this would have been the case but for the fact that information slowly circulated among exporters that the New Zealand Dairy Company did not intend to supply the stipulated information. No direct intimation was given to the board to this effect, but the fact remained that the information was not supplied and knowledge of this naturally stimulated a spirit of revolt elsewhere. Knowing the disruptive influences of incessant controversy, and making allowance for reaction arising from extreme disappointment among the advocates of full control, the board has exercised extreme forbearance in an endeavour td secure unified effort on the basis of the limited control provided for. But forbearance, which will not escape being regarded by some as weakness, must have its limits, and any regulation to safeguard the general interest must be applied equally to the large and powerful as to the diminutive and weak, otherwise control becomes a farce. Others Influenced. "Of the 500 registered companies only five have failed to supply any information. We are informed that some of these have adopted thi3 attitude because it is understood that the big company is withholding. Four other companies have supplied only partial information. Among these latter are some large proprietary interests, who have supplied their consignment particulars, but indicate that details of f.o.b. sales are withheld until it is known that they are being secured from all. An intimation has been received from the London manager that merchants are now responding freely in supplying the desired information, but they also indicate their expectation that this will he insisted upon from all. A board that has not the courage to insist upon compliance with its regulations among its members is clearly impotent. Continuance on such a basis would be unthinkable. It is, however, of desperate importance that the board’s power of surveillance and contral should be maintained “lest worse ills befall you.” Consolidation is more urgently needed than ever before. An Alternative Claimed. “In the interests of consolidation ,wc have hitherto refrained from speaking of a matter which we know is the first question upon which the lead of the board is sought by the industry. We refer to the establishment of a new marketing organisation for which it is claimed that it provides an alternative to consolidation under the board. We entirely dissent from this view. Whatever imperfections may be observed in the constitution of the board, the ideal behind it is the management of the industry, by the industry lor the industry. We think it was a grave misfortune to the wider interests of the industry that in company with some of its officials the New Zealand Dairy Company decided to establish a marketing organisation on a basis that substantially diverges front the ideal and point of view that had been adopted l'or tho national effort. We believe that ideal offers Ihe only acceptable basis for national consolidation, consequently we think Ihc basis of ownership and control of the new company, as outlined in its articles of association, definitely exclude consideration of it as an acceptable alternative. A private company has a perfect right to decide its own constitution and method of management, hut when it aspires to national representation, its foundations, as well as its declarations, must be prepared for scrutiny, for the inner consciousness ol' the public mind, however gullible on occasions, realises that ‘figs are not gathered from thistles.’ “As a substantial “portion of the country’s output of butter, the volume of production of the New Zealand | Dairy Company may give a lead towards improved marketing of immeasurable advantage if well directed. Conversely, if it takes a wrong path, the momentum of this big organisation may effectually impede progress and seriously affect future development. To become part of a new organisation, which is not acceptable as a national movement, only creates further divisions. Their previous, course; that of establishing a selling organisation of their own, was an entirely different and highly commendable procedure, but the new course introduces a duality of personality, which duality leaves room for doubt as to whether the voice is lhat of the producers’ organisation, or the sellingragency, which are by no means one and the same thing.” MOIRE TO COME Mr Grounds quotes English papers to show how buyers’, organisations are working to slrcnglhen their bargaining power and concludes his review with the sentence, “And we. uesitant and divided, are moving whither I”

Discussion By Board. The failure of certain companies to supply the. information required uprter tlie export license scheme was discussed at a mooimg of ihe Board. The five companies which had given no information were Joll, A-mhurys, Overland. Tc Aroha and New Zealand Co-operative Dairy Co., Ltd. The chairman reported that after the last meeting of the board he had interviewed the Minister of Agriculture and reported the situation to him, and given an indication of what he conceived the probable course of future events, viz., that the board would possibly . recommend the withdrawal of the license from the factories concerned.

A reply from the Minister to the representations advanced was received, stating that the matter had been given very careful consideration, and ii seemed doubtful whether the failure of licensees to render accounts after export had taken place constituted an offence, and whether that requirement could he legally enforced; secondly it was pointed out that the license was issued by the M.nistcr and could be revoked only by the Minister. If the board desired to recommend that that course be taken, the Minister asked that full details be officially supplied. Mr Grounds said he considered the board had no alternative but to ask tho Minister to revoke the license of the companies concerned, and moved: “That the board supply to the Minister details of the default of the five companies named, and request that, owing to that default, their export licenses be cancelled.” Mr W. Bryant seconded the motion. Mr Hunt said it was questionable whether the board ever had any power to make the regulations it did, and many factories had agreed to comply with those regulations in order to get a license only under a misapprehension that, if they did not give that undertaking, the board could compel them.' Mr Ilinc said he would oppose the resolution for various reasons. It would be very unwise for ihe board, after going through practically ,'lhc whole season and allowing these conditions to remain in- abeyance, to suddenly take the drastic stand proposed. Many factories had complied with the conditions with had grace and under duress. They had been threatened in the spring that, if they did not send in their application, their produce would be withheld from shipment and no board of directors would face the responsibility of risking a hold-up, because farmers required their monlhly cheque. * Mr Qoodfellow’s Views. Mr Goodfellow said that Ihe conditions in the liccnsd in relation to f.o.b. sales seemed to him stupid in the circumstances of the board. No dairy companies in New Zealand other than the New Zealand Co-operative Dairy Company, Limited, made f.o.b. sales —they were all made by merchants, and for his company to. give the information required under the license in relation to markets in America and the East, which Kiev had pioneered, would act as a disadvantage to them and confer no benefit upon the industry, llis company was prepared to give ihe hoard tho returns relating to the United Kingdom, but objected to revealing Ihe conditions of f.o.b. sales made to other markets, because by putting their cards on tho table in that respect, competitors would be benefited, and not the industry. They had had.this experience before. Mr Corrigan maintained the desirability of the hoard collecting the statistics in question. It was costing the industry £75,000 more this year to market than last, and the information was desired to show how f.o.b. sales edmpared with consignment returns. Mr Goodfellow advised that his company’s acceptance of the license had been undertaken in his absence, and on discovering the position he had immediately informed the hoard of his objections, in company with his solicitor, and it was I hen open to ihe board to withdraw the license at that stage. Mr Hime considered lhat the proposed compromise would place the board in greater difficulties, because a concession in the direction indicated would put practically the whole of Taranaki up in arms, and they would demand the same concession in relation to what they regarded as their interests. Some companies there had jyst as much objection to giving information about their London returns as others had about giving outside returns. Mr Grounds’ resolution, on being put, was defeated by 9 votes to 3, the minority being Messrs Grounds, Bryant, and Corrigan.