The pricing of retail packs of New Zealand honey for the New Zealand market was strictly controlled by the Government starting at the end of 1942. The system would remain in place for honey for until 1965, nearly 25 years. This article focuses mostly on a short period of time in 1957 when Price Controls were removed, only to be re-instated when the grocers’ and retailers’ used their considerable powers to manipulate the honey industry.
Initially the system was applied to a wide range of prices, costs, salaries and wages in an attempt to provide a degree of market stabilisation in the economically troubling times of the war.
A Price Order established the highest price a beekeeper could charge for packed lines of honey. Theoretically, it established a price that took into account the costs of production but still allowed the Government to control price rises for honey and a range of other farm products.
Lobbying for a more favourable Price Order became an on-going industry activity. The approval process for any changes to the price of honey was time-consuming and frustrating. One letter from the NBA’s General Secretary Garnie Fraser to Keith Holyoake, the Minister of Marketing, revealed the level of exasperation.
The seasonal nature of honey production meant that a timely publication of a new Price Order was critical to the industry’s well-being.
After the Honey Marketing Authority was established in 1954, the applications to the Price Order Authority were generally supported by both the NBA and the HMA, the degree of support that the Government expected before taking any actions.
In the late 1950’s the system of strict price controls on honey was regularly debated by honey producers. Though a Price Order was very restrictive, the NBA Executive still felt it to be worthwhile, as there had been instances of price cutting following a good production season. The NBA feared that the lack of a Price Order would lead to chaotic marketing conditions. President Jack Fraser said that even though he personally would favour de-control, he felt bound by the previous remits to conference to reflect the NBA’s views as being in favour of price control.
Here is where it got a bit murky… The NBA Executive was hoping for a definitive resolution from the 1956 conference to give a clear direction. The conference did vote on a remit calling for price controls on honey to remain. There was lively debate, with a vote of 1090 to 427 in favour of retaining price control. But then the conference voted unanimously to call for the removal of price controls on all honey if the HMA was successful in having it removed from the honey supplied to the HMA. The difference between the two would have left the NBA Executive wondering just what the industry’s position should be.
The previous season had revealed a weakness for the HMA as a stabilising body. It had been a poor season, and there were fears that some areas of the country might not have adequate local packed honey. But the HMA was loath to sell packed lines into those areas, as it could get a better return from the export market. Selling locally meant they were bound by the current Price Order, so the HMA had made an application to be exempt from the Price Order.
Tom Pearson tried to promote a new approach, raising it at the end of the conference. No resolution, as the discussion was ruled out of order as it had been raised under “General Business”. He suggested that in regions where there was a poor crop that the HMA should release (sell) some of its own honey from the local depots to local producer/packers. That would save the HMA the time/cost of transporting the honey to Auckland, packing it, and then sending it back to those same regions, ultimately selling at a loss. And if it was sold to packers, they would then be paying the seals levy on that honey, again improving the returns to the HMA. There were some HMA suppliers who were not at all happy at the thought of some of their own honey being sold to the local producer/packers, and said it would likely “skim off the best quality honey, to the detriment of the export market.”
The magazine that came out after conference had several letters to the editor on a similar theme. Wallace Nelson wrote in opposition to price controls generally, contrasting other workers where the award would set the minimum pay rate. For beekeepers the setting of a maximum payment was not acceptable to him. Bill Herron’s letter pointed out that the conference had supported two seemingly contradictory remits. He said that with overseas returns better than the local market, the HMA should not be made to lose money on local sales, and thus reduce returns to HMA suppliers.
Following all of those arguments and remits to conference, and even before the next Executive meeting in October, the NBA Executive shifted its position. The decision (made “by mail”) was defended by the General Secretary Robert Fraser and the President Jack Fraser as necessary. There was a concern that the HMA might be successful in getting “de=control” on their own packs by “Ministerial influence”. The NBA agreed to support the HMA’s application to ensure that all honey was removed from price control.
Then in something of a surprise move, the Price Control Division declined the application of the NBA, without giving any reasons! Just before the Executive meeting the President and General Secretary had met with the Director of Price Control. They reported that the “Price Control Division were not in possession of all facts concerning honey-stocks at present held in the South Island depots of the HMA. It was felt that de-control for honey would not happen before the new season’s crop was “to hand”.
And then, over the summer, it all happened pretty quickly. The February 1957 issue of the NZ Beekeeper made the announcement. A “stop press” announcement advised beekeepers to delay entering into contracts too early, with the likelihood that honey would be de-controlled.
And then on 4 March 1957, price controls were removed from honey, for all producers and packers.
But the idea of no price controls didn’t mean that beekeepers wanted to be left to arrive at pricing on their own. The industry still expected there to be a list of packs and prices, but not providing an inflexible maximum price. (Now, that sort of generalised expectation would be considered collusion and price fixing!) It was expected (by the NBA Executive, anyway) that the HMA would still be issuing its own price list, and that would give guidance to packers to remain competitive and price consistent. But the HMA was not willing, it would seem, to provide any sort of pricing for packs that it did not sell, and it came down to a stalemate. The HMA position was best described by Chairman Ted Field as an unwillingness to upset the wholesalers and retailers by issuing a price list.
In the last few weeks before the price controls were to be lifted, the NBA’s General Secretary Robert Fraser stepped in. He prepared a Honey Price Index to set “standard selling prices” for honey. The format followed that of the Price Orders, but was ultimately released only under the name of the NBA. It provided for an increase of 10% on most packs of honey, and retained the previous margins for wholesalers and retailers. The editor of the magazine, John McFadzien, wrote a forthright explanatory letter.
Undoubtedly, personalities would have played a big part. Ted Field, Chairman of the HMA through most of this period, had been NBA President for 12 years and on the Executive for another 6. He was the HMA Chairman from the HMA’s creation in 1953. But there were also a lot of beekeepers that served periods of time on both the NBA and the HMA, with resulting elections and sometimes bad feelings.
Between the time the NBA issued the Price Index for Honey in March and the next issue of the magazine, the exciting new world of de-regulation began to bite beekeepers. It turned out that the Wholesalers’ Federation and the Master Grocers’ Association were not happy to retain the same profit margins they previously had, and were strongly opposed to the attempt to “peg their percentages of profit” to those that were in place under the last Price Order. So they didn’t need to feel bound by the NBA’s Price Index – they raised their own margins, making for a significant and geographically variable rise in the price of honey to the consumer. It would be fair to say that the honey producers were caught completely off guard.
By July the Canterbury Branch had a “vote of no confidence” in the Chairman of the HMA Ted Field, for his lack of co-operation with the other members of the HMA in failing to issue a full price index. (The NBA Executive passed it on to the HMA without any added commentary.) Field would pay the price a year later when he failed to get re-elected to the HMA after 20 years of various representation on industry bodies. He stepped aside from industry concerns, and later became the mayor of Foxton.
On 1 August 1957 the HMA and the NBA met to try to sort things out. They ultimately agreed on a process for producing a price list that would be published in the names of both organisations. (Ted Field, HMA Chairman, had been concerned that if the list were to be published solely by the HMA that the grocery trade would regard it as undue interference.)
But only three weeks later Price Controls were re-instated, with a new Price Order. The issue of appropriate margins for retailers was still concerning to the NBA Executive, as there was an indication that Price Controls might be re-instated at the end of the year. If that were to happen the resellers’ margin of profit would not be restricted.
Ironically, NBA President Jack Fraser’s report in the same magazine extolled the opportunities and future of marketing without price controls.
The range of letters to the editor in the August magazine would have all been written before the re-imposition of price controls.
There was a letter to the editor from Tom Pearson, who was currently on the NBA Executive, but was standing for the HMA. He gave his opinion on a range of mostly operational issues, but did say that he felt that the price list should be produced by the HMA, and that he supported Ted Field as HMA Chairman.
Other letters from Wallace Nelson and “Time for a Change” carried on arguments relating to the impact of price control on the HMA.
Des William’s letter was to “state my position and views to your readers” as a candidate in the upcoming HMA election.
The HMA election in September resulted in Wallace Nelson’s re-election, and the election of Billy Bray, a major Canterbury producer/packer. Bray’s replacement of Pearson, coupled with Des Williams’ failure to get elected set the scene for the election a year later when Ted Field would lose his place on the HMA.
Beekeepers had just under six months in a de-regulated market, where selling prices were not dictated by a Government order. The powers of the grocers’ and retailers’ appear to have been just too great for the industry to stand up to. When honey returned to control in late 1957, it would remain for another 8 years…
Price controls over honey were finally removed in early 1965, with effect from July of that year.
Price Orders through Time
1943 – No. 121
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1943 – No. 121 amendment 1
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1944 – No. 234
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1945 – No. 393
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1947 – No. 806
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1947 – No. 895
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1948 – No. 927
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1949 – No. 984
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1950 – No. 1201
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1951 – No. 1250
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1955 – No. 1591
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1956 – No. 1664
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1957 – No. 1718 (reimposition of price controls)
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1962 – No. 1878
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1962 – No. 1894
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1963 – No. 1923
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1964 – No. 1960
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1965 – Honey is removed from the list products to be price controlled
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