MARKETING POLICY.

Waikato Times, Volume 118, Issue 19760, 16 December 1935, Page 9

MARKETING POLICY.

(To the Editor.) Sir, —The prompt action of the Kaitaia Dairy Company shareholders in asking the 'directors to resign for what they considered to be the inefficient handling of their financial interests is one to be heartily commended, |. and one which might be copied to ad- . vantage by the suppliers of a very | large number of dairy companies. For the most' part, directors are elected j on the sole qualification of being ; honest and old residents, and without any regard to their efficiency as business men, without which the other grounds for their election are insufficient to fit them for a seat on the directorate. Tile main duty of directors is to realise the best cash returns for their suppliers. Incidentally the Kaitaia suppliers have thrown a searchlight on to that ridiculous scheme passed at the last Dairy Council meeting, known as “group marketing.” The ordinary farmer, of course, gets no vote at these meetings, nor can lie express his views, both of which are supposed to. be done for him by the delegates representing his factory, who, when they do speak, give their opinions, which may differ from the hundreds of suppliers they represent, who are voteless and speechless. Unfortunately, however, more than 50 per | cent, of the delegates never open their, mouths except perhaps to say “hear, hear.” Their duties —or, rather, actions —on behalf of suppliers totalling many thousands, consist of heated discussions before and after the meeting; but they are as dumb as mules at the meeting ilseir, where they were sent to represent their different fac- | lory suppliers. The only talking done is confined to a few who, in the case of group marketing, had better have been dumb, 100. I have been intimately acquainted with Tooley Street and its ramifications, and •so can fully imagine the joy with which tile news orferoup marketing would be received. The prime j object of group marketing was to remove internecine competition between factories by grouping them, and selling tlie output on a co-operative pro rata basis, eliminating f.o.b. sales, it was decided upon evidently from a seller’s point of view without any re- • gard to the effect on buyers in London, and I am certain that if any of the delegates had the knowledge of TooleyStreet lliat 1 have, and had the pluck i to speak out at the conference, no j •such absurdity as group marketing i would have been agreed to. Instead of | eliminating competition, it has .regi- j men led individual factories into groups in competition, which have for their , object Hie elimination of f.o.b. sales. There are 558 butter and cheese factories in New Zealand with exportable | produce, all of whom were in compel!- i tion. No wonder the London merchant I approves of group marketing, because j now, instead of pitting one factory against another in competition for his purchases, lie is saved all the work of individual bargaining, and now pits group against group. Thus it will be seen that group marketing, instead of eliminating competition, has intensified it, and by seeking to veto f.o.b. sales robs the farmer of any benefit ho might derive from taking advantage of a sudden rise in price due to causes of which we know nothing and which may not last. For example, of what advantage was it to any factory in any of the groups when butter rose to 121 s in London —1.e., 158 s 9d in New Zealand currency, or is (id per lb? None whatever to those whoso buller was on the way, but under f.o.b. sales wo should all have been better off for selling. Dairy directors would not, and dare not, pay out Is Gd, because llicy did not know what their butler\ would fetch on arrival in London; consequently in September, October and November the pay-out was i Old, Hid

and lid respectively, instead of at least -'id more. Had f.o.b. offers been accepted, suppliers throughout New Zealand would have been hundreds of thousands of pounds better off. So all honour to Kaitala suppliers in breaking the stranglehold of consignment which lost them £(H>i3, so it is alleged, through their directors adhering to a ilxed policy. There should be no shell tiling as a iixed policy when Fortune knocks at the door In the shape of a

sudden big rise in price which may not last, necessitating immediate acceptance. Group marketing intensifies the previous disastrous competition between factories and oils the wheels of life buyer’s machinery. The best that can be said for it is that it constitutes (.he finest possible argument for the reinstation of a Central Control Board on sensible lines, permitting of i'.o.b. sales based on tho very sound principle that “a bird in the hand is worth two in the bush.” —I am, ole., W. CAYLEY ALEXANDER. Pio Pio, December 9.