Image TileImage TileImage TileImage TileImage TileImage TileImage TileImage TileImage TileImage TileImage TileImage Tile
Image size: 6656x8192 Scale: 35% - PanoJS3
Page overview thumbnail

Article text

HIGH PRICE OF BREAD.
the official inquiry.
startling EXPOSURES.
THE INVESTIGATOR'S
RECOMMENDATIONS.
Government Authority to
Prevent Exploitation.
State Control of Flour Prices.
Registration of Bakers.
Following widespread public protests
, whist proposals tlmt were made
t|l(. Bakers' Assoeiutiori some
months ago5 to increase the
....1,. t.T.rl. nrieo of bread, the blato
Ministry appointed Mr. 'I'. Forristal as a
special investigator to- inquire into the
following aspects:— (a) Allegations that
excessive prices were being charged for
bread; (b) control of trade by the Master
Bakers' Association, supported by the Vic
torian Mill Owners' Association; (o) stale-
meats that in the exercise of this control
disciplinary measures to the extent of cut-
ling oat Hour supplies hnd been taken in
eases of bakers— non-members of the nsso-
c'iatuui— who were selling, or were willing
to sell, bread at prices! below; those ii.xcd
by the association.
Mr. Forristal's findings, contained in a
report dated 22nd November, were tabled
in the Legislative Assembly last evening.
Summarised his recommendations are:—
That restraints of trade should bq made
illegal.
That n Government authority should be
established to prevent exploitation.
That the price of wheat for local con
sumption should be based ou cost of pro
duction.
That the Department of Agriculture
should undertake a survey of cost of pro
duction of wheat.
That the consumer is not paying an
excessive price for wheat.
'flint the price of Hour for local con
sumption should be under Stale control.
That at present the local consumer fur
nishes indirectly a bounty on export,
flour. .
That the price of flour is excessive to
the extent of 15/ to 20/ per ton. .
Tlial the difference in price for bread
delivered between the inner and miter
suburbs should not exceed 0%d. per 4 lb.
loaf.
That inflation of values of goodwill and
excessive price charged for flour increases
the cost of bread OVid. pur 4 lb. loaf.
That maximum prices of brend under
present conditions, without taking into
account the (1) excessive cost o'l flour
and 12) inflation of prices, should not
exceed the ligures quoted in paragraph 50
of the report.
Tlmt I lie present method of distribution
is llic biggest handicap to cheap bread. ..
That Governmental registration of
bakers and other retailers of foodstuffs
should he considered by the Government.
The schedule of prices quoted in para
graph 50 of the report showed : — Mel
bourne and inner suburbs, Sd. at. -bake
house or shop, and 0d. delivered; outer
suburban area. 3d. and 10V&d.; Bnllaral;
sail suburbs, Still. and lid.; Bcmligo and
suburbs. Slid, and lid.; Gcclong and sub
urbs, Slid, and lid.; provincial towns, and
nrcas 'not specified, Slid., at bake ' bouse
or shop; provincial,. withim "d'/i-mile radius .
ol bifkc house, Ud. delivered.
According to evidence ..obtained; states
tk- report, the general standard price., of
bread delivered for cash -was lid. n 4-lb.
loaf in Melbourne and inner or. closely
populated industriaL suburbs, wliile in the
outer auiie: 'tan or residential area the
price was In Gcelongi a flat i'iiTe ,of,
l/ivns being charged, but at'Bqllarnt and
t.Migo the. charge': was -lid.; .-'over the
| Mintcr ami 1/ delivered, vln remaining
| .why districts the . price varied, from
I. iSSii. .over tlio- countarAtb : I/2>'doli'verciL-:
..iVilli regard, to delivery, .it' appeared .that
iii.tll-.Jcss densely populated" a'vbni of.iho
metropolis and > country / districts ' nil, ex- .
Ira charge of I'tid. a 4-lb. loaf 'Was war
ranted. 'That agreed' with tlio result' oi
previous investigations-'- Hint' -there 'was, no
justification for the present/charge of Id.
a 4-Ih. leaf. NcitheiGwnBvUierp'-:unx.'-ijiis;;.
lilication for the tiigli .pL-iccs hnrged in
sonic .country districts. 'lletiiriisr failed,
to show any undue proportion of; "bacl'
debt?," an old bogey of.tlio baking trader.
After referring to tlio rifouiyririnstcri
bakers' associations in the 'State, Gherre-
port states that the metropolitan' nssoc-iu-
fiou' is the largest' and ivibst ' puwbrfliir
its principal object was pried fixing; : ; As
a rule the great majority of metropolitan
takers adopted the fixed prices,: though",
there ivas always a few who, for a lime
at least, were "not willing jto; do so, but
the association had apparently rii/very, ef
fective method of dealing xvitli these qut-'
ters, as they were invariably compelled! to-
i come into line. .When the secretary ! of
the association was questioned ho; declared
emphatically that the , only method ilicl
association could adopt in dealing with
such bakers was that of "moral suasion,"
, «nd tile Victorian Mill Owners' Associa
tion did not net in conjunction- or. oxereiso
any joint control in such cases. However,,
the fact remained that in some instances
bakers who had been selling .broad at
. prices lower tluin the association ' fixed
prices laid been compelled to pay cash lor
ibcir Hour supplies. That meant they
were debarred from obtaining the usual
trade concessions of delivery within three
months of date of order and cash, in 30
(lays after delivery, and -were also lire-:
vented from taking advantage of any
favorable market conditions extant. When
that aspect hnd bedu brought under the
notico of tlio millers, it was stated that
when action of that kind wus taken it
! a» usunlly in consequence of threatened
or actual withdrawal of custom by those
: bakers whose trade was being affected by
: the competitor selling at the lower
: price.
"Repressive Clauses" Con-
j demned.
; ''Notwithstanding asseverations to the
i contrary," adds the report, "the fact that
< 'be Master Bakers' Association has sought
to exercise complete control of the trade,
; Miciilnrly in regard to prices, is borne
| out by an ugreeinei>t made between it and
| 'ie Millers' Association about twelve
f months ago, two clauses of which read —
! ili'L""" "ol sp" "car at leas lliau
' in J. . "or ,n !l,,v ,«,k,'r "ho acta con-
' ramV.,!? , .V'""s "'Is agreement , noil all
f blmia . ii ""'A'"1' of liner In contain elntisea
C Ita a ,vu"!llaM'r m" to hwad at less
; lorhu !!!' «» I'.1' the Master llakera' As-
? "al'Pr,i "B'-ve ant to luiy flour
, iioiii any miller who i-naindts a breach of this
; r' J1'""' say. miller at a lower price
I ' fl'e 3111 Owners' Association price.
t Any iigreenienl containing such rcpres-
i-iic clauses," says Air. Forristnl, "lint
h merely restraining, but denying, the right
fi ! 11 cuflelitor to trade, merits eon-
h -carnation, and consideration might be
t; Pica In | be suggestion of making such
I '(-'hauils illegal. It gives one pleasure,
I ""icier, to l,(, alilf to record that the
"peiisored by this agreement lilli-
p J proved to |>e unworkable. There
I Ho dnalit the association fixes tlie price
I i '"' iM"l its lead" is largely followed'
I'" "r'oSS",''"li"" l,al-l'1K- I am emi-
o."'1 "'"'never and wherever the
r f, Association is strong
r lm- .j ' ! I'".''"1' will have to pay for its
I I'rnm e" l"'i,TS as the association may
I of iiri i l" timL' ,ll'<:ilk'- Tlu> fixation
I- o " """'Public iiistriiiiientalily
t -is i-a, -"If olk'- wiling interest
I taiir|J|Hl|! i5- V'"'" "lal 'llt0l('st .is en
I ntoet nl o"" " (dt'nug orgiiuisation,
IS t|v,Mrnal,U'' ""d "-cannot be too
I IT'- """lemncd. With staple eommo-
(lilies, the burden of eoinbines is always
felt by tlic.cousiiiiicr, bill when that com-
moditj u ,'ouv daily bread' the producer
is .more often than not victimised also,
I am thercforu of tlio opinion that in the
interests of (lie community as a whole a
.governmental authority should be in exist
ence not necessarily to fix prices, but to
prevent exploitation."
Price of Flour Excessive ivy
15/ to 20/."
On the subject of Hour, tlio report says
the miller reverses the usual process of
nmnufaeturc, and breaks up -wheat- into
various products of varying value, nud in
varying demand, instead of combining
various materials into a single uu-ticlc
for sale. Tlmt prevented the control of
flour prices by relating Ihom directly: to
the cost of material and production, for it
was not practicable to appropriate to
flour, bran and pollard respectively any
specified portion of the costs of the wheal
or of the costs of production. The prices
obtained for bran and pollard, therefore,
bad a direct bearing on .the cost of flour.
II lour prices for local consumption were
clfeclivoly controlled by the Victoriun
Mill Owners' Association, which wnq an
illustration of the present-day tendency to
change from competition to combination.
Willi the exception of ,T. Darling and
Son, non-memboi-B generally followed the
association's lead, and fixed prices accord
ingly. Darling and Son hud not joiucd
tlie association, believing that combination
.was wrong in ' principle. Tlmt was prac
tically the only opposition tlie association
lind to contend with.
After stating that there was at present
no real limit to the price which might
bo demanded by tlie Mill Owners' Asso
ciation except tlmt it could not raise
the price to a level at which it would pay
millers outside Victoria to place flour for
sale on tlio 'Victorian market, Mr. For-
ristnl observes — "I am strongly of opinion
tliut the mere - existence of tlio Mill
Owners' Association as a price-fixing com
bine, controlling almost absolutely tlie
price of flour in the State, compels the
exercise of State control, so that justice
may be done not only the producers of
flour, but also tlie consumers."
The average price paid by bakers for
(lour, according to returns received, wns:
—Metropolitan area, £12 1(1/2; Bnllaral
district, jJ12 10/10; Bendigo district, £12
10/5; Goelong district, £13 1/4. So that,
after. allowing a return of 12'/6 per cent,
on capital funds, -including bank over
drafts, loans, deposits; reserves, &e., tile
price of flour at present 'charged to bilkers
throughout the State was excessive to the
extent of 15/ , to 20/ a ton, equivalent to
one-third of a penny per 4-lb. ioitf.
Price Control and ' ' Tied
. Houses."
Alluding to' "tied bouses," the report
slated Hint a pvnetice which had grown
considerably in recent years, and which,
unless curtailed, .would have a serious
eilect on tlio baking industry, was the
financing of bukcrios by millers resulting
in what were known - as "tied houses.-"
Rule 15 of the .Millers' Association -stated
flint tjie amount of any Joan should not
bo more tlian-.-lO per cent, of the actual
pin-chase price or cost of extensions, but
instances had been brought under notice
where millers bad advanced , almost the
whole- of tlie purchase money. It. would
appear tlmt. inillers ' were prepared , to
finance bakery concerns, accepting in some
cases little, if any, tangible security, the
condition being Unit a baker agreed to
take tlie' whole or tlio- major portion of
liis (loiir from tlio millers making the ad
vance, and ut tlie price fixed by tlie Mill
Owners' Association,, it was. dnrprising
to learn the number of bakers "tied up"
in tlmt manner, and it would appeal- Unit
competition existed among certain of the
largo association millers to obtain llint
class of trade. If tlie practice wag per
mitted- to expand the inillers by judicious
handling 'of their own "tied bakeries could
control tlie prices nil libitum."
Wheat Co3!ts and an "Economical
Survey."
Dealing with the price of wheat, the re
port points out that an arrangement in
force Inst season was as follows:— Oil the
iirst and third Tuesdays in February, aifd
each '"subsequent, month up' to and includ
ing October, the wheat growers',; corpora
tion; fixed,!, the. price at wliielr. eqch. fort
night's .quota, was to be supplied. That
price was jfixod by agreement! between ilic
manager of .tlio corporation" and tlie presi
dent of the Victorian Mill Owners' : Asso
ciation, ' and was based' on .fair- market
price,. taking into . consideration -.both-: the
lot-al and overseas position, /Failing agree
ment,- tlic qiieslion .was referred ; to , an
arbitrator. whose decision ' (is - to the
lirice jj'or .Tho' day -.in' qiiasUon was , con
clusive, In additioii'to tliu.pric;; fixed tlie
"niiljeripaidj a!,''UoliIiiig :chargc'' ;t6., coyer
.expenses! iii;,conilcelioii;wlEli storage,:. &c.
.Of' tlie wlicat. ninrkqted tlio coi-poi-ution
bandied approximately .50 per' -cent..-. hist,
season, -.The 'balance rind bean sold through
ordinary: trade., channels to wheat ; brokers
or direct, to 'inil|ers, not parties to 'the
ugroement wiUi the wheat groiyers' cor
poration. /.rhe'pool had proved of service
to' the ' vylieat' grower, and. tlie local ecm-
sunior,.biit it was contendetl that the price
of wheiit for local consumption should', -be
based on-: cost of production under Aus
tralian coiidiiiotis.vrather tlinn on" overseas
parity . iiV .conjunction . with Llic position
of the local nijirket.
-"It was evident that wheat prices for
local . consumption xvcru fixed; and the
question arose .whether the wheat grower
received a fair return if nllowuucc lie made
lor the Inbor and capital employed, in
cluding tlie value of land, and also whether
the local consumer was being supplied with
whent ut a reasonable figure. The liei
return from tl(c voluntary pool tor 1D24-2C
and 1925-2U seasons was 5/9 and fi/UVi re
spectively, while for the 1920-27 season
growers would ill all probability not re
ceive an average of'nmre tliau 5/ net a
bushel. Tlie lower return for tlie past
season was entirely due to conditions
aft'eeting the oversea market. Without a
properly constituted economical survey of
(lie cost of production of wheat it wus im
possible to ascertain tlie return necessary
to fit all cases which would enable tlio
grower to iiiuko a profit with average
'yields. Ificoiioniical surveys of tlio cost
of wheat production find been adopted
with success in other countries, mid need
not necessarily be carrjcd out on an ox-
tensive scale." The Agricultural depart
ment could undertake tlio work. The
average farm was a business undertaking
necessitating a capital of .from £2000 to
£ !0,000. Few farmers kept books, and
nunc segregated the time occupied in the
various operations."
$