Grocery prices: Regulations contravened
Three Firms Prosecuted
In Armidale Court of Petty Sessions yesterday convictions were recorded against three Armidale business firms for breaches of the prices regulations.
The firms concerned were Moran and Cato Pty., Ltd., Joseph M. Hanna and Wright, Heaton, Ltd.
The evidence showed that in the case of Moran and Cato and J. M. Hanna the breach was caused by defendants raising the price of rice and tea to the level being charged by other Armidale stores. In the case of Wright, Heaton Ltd., the manager stated that the total overcharge was 7/5.
Hanna pleaded guilty to one charge concerning tea and was fined £10, with 8/ court costs, and £2/2/ professional costs.
Moran and Cato Pty., Ltd., pleaded guilty to a charge involving the price of rice, and was fined £15, with 8/ costs, and £2/2/ professional costs.
Wright, Heaton, Ltd., admitted four breaches concerning sales of sago, fish paste and soap, but denied two charges involving sales of bicarbonate of soda and tapioca. Convictions were recorded in all cases, excepting that involving tapioca, which was dismissed, and fines and costs totalling £49/0/10 were imposed.
Mr. A. E. Gentle (Weaver, Gentle and Harrison) appeared for Wright Heaton, and Mr. Q. A. Biddulph (Mackenzie and Biddulph) for Hanna and Moran and Cato. The Crown was represented by Mr. S. Snelson, of the Crown Solicitor’s Office, and Hector McDonald Ross, inspector under the price fixing regulations, gave evidence for. the prosecution.
In the cases against Wright, Heaton, Ross said he visited the Armidale premises of this firm on May 21, 1941, had seen the manager, Mr. Irwin, and had asked to check on buying and selling costs of 20 grocery items. He had asked for landed-into-store costs and wholesale and retail selling prices, as at August 31, 1939, and similar particulars as at May 17, 1941.
Later, continued Ross, he had received the landed-at-store costs and wholesale prices, Irwin explaining that the firm sold only on a wholesale basis. A check on the list revealed that, in respect of bicarbonate of soda, the company had increased its percentage of profit.
Proceeding, Ross said he had told Irwin that he would have to reduce the selling price of this commodity so that the margin: of profit would be reduced to that prevailing at August 31, 1939. Irwin had replied that he would do anything that witness advised.
Ross said he had advised that figures be checked and that refunds be made to those who had been overcharged. Irwin had promised to do this and, later, he had handed witness a list.
Continuing, Ross said that on November 19, he had returned to Armidale to cheek on prices at Wright Heaton’s, and together with Irwin, he had searched through bundles of documents. Eventually he had been handed certified documents.
One of these, a invoice dated January 24, 1930, showed 12/ per cwt. for bicarbonate of soda. Another, dated August 19, 1939, showed that bicarbonate of soda had been sold to J. Burraston at 2½d per lb. That indicated a margin of profit of 38.12 per cent.
Witness produced a copy of a purchase invoice, dated January 9, 1941, for one sack of bicarbonate of soda at 16/ per cwt. He also produced copy of a sales docket, dated May 8, 1941, showing that 6lb. bicarbonate of soda had been sold to C. Burraston at 3¼d per lb.
This disclosed a margin of profit of 47.73 per cent., an increase of 9.5 per cent.,” said witness. During Ross’s evidence Mr. Gentle asked the Magistrate if it were possible for him to give a direction. to the Press not to publish figures re-j vealing margins of profit. “These are things not usually disclosed to the public,” he said.
The Magistrate stated that the court was open, and that such a matter was for the Press to decide. He added that he was concerned only with the differences in the margins of profit.
Answering Mr. Gentle, Ross said that the first sale to Burraston had been 28lb. and the second 6lb., but he did not think that different quantities made any difference in the margin of profit for wholesale dealers.
Ross further stated, in cross-examination, that the firm was entitled only to a profit of 38.12 on 16/. “He might have made a hundred sales and not exceeded the margin, but he did on this one, and other sales were not produced to me.” he said.
Mr. Gentle: You compared a 6lb. lot with a 28lb.? — That was the only docket available.
How many prices did you discover which you considered to be breaches of the regulations? — I checked 90 and found six wrong.
Did Mr. Irwin give you any explanation? — No, only that he said he was not watching costs properly. You asked Mr. Irwin to make adjustments? — Yes.
How much did these adjustments amount to? — About 12/.
Are you sure it was not 7/3? — It may have been. No check was made.
This concluded the evidence for the prosecution.
L. J. Irwin, manager for Wright, Heaton, stated that Ross had been given certain information, but he did not know at the time that it had to be in decimal points of the costs. He had thought that the amount to a fraction was sufficient. He did not remember Ross asking him how the mistakes occurred. On the sale to Burraston of 28lb. he had since worked out the profit at 33 1/3 of landed cost, and this was nearly 5d under the maximum price allowed. The difference in the charge for a later amount was due to the quantity being under 14lb. He had endeavoured to fix the price according to the regulations.
The total of errors he had discovered in checking up over six months was 7/5, and this had been refunded in discounts. The turnover in that period would be in the vicinity of £25,000.
Cross-examined by Mr. Snelson, the witness said he had been told that an increase granted by the Commissioner applied to stocks in hand and stocks to come in. He did not agree with the statement that all of the articles in a list produced were on the averaging system, except tea, matches, sugar and rice. He had not been able to find a docket for sale of carbonate of soda under 14lb. prior to August. 1939.
The P.M.: I think I should find the offence proved.
Mr. Gentle pointed out that the amount involved was very small, and that a subsequent sale and the price showed that the practice of an increase was not being adopted regularly.
In the case of tapioca Ross stated that on May 21 last year, he visited the defendant’s premises, and after perusing the list of costs and selling, prices prepared by Irwin he asked for documents of costs in August, 1939, and selling prices at the present date.
These documents showed a rise in the percentage of profit on tapioca from 13.39 to 28.95.
Irwin, in evidence, said he had worked out the profit on a sale in 1939 as 29.1 per cent, and on a sale referred to in the evidence, made in 1941, at 28.1 per cent. He would have been entitled to charge more. The P.M.: I think I’ll give the benefit of the doubt in this particular information.
Apparently, in these two cases, if the information had been properly supplied in the first place, there would hot have been a prosecution.
Mr. Sneison said the price in 1939 for soap was 7.72 per cent, as against 12.76 at the date of the offence.
In the case of anchovette the price in the period had risen from 10.84 per cent, to 19.54 per cent; for sago from 22.67 to 28.36 per cent.
Mr. Gentle said he did not agree with these figures.
Mr. Gentle said there had been a clerical error in the invoice for some items.
The P.M.: My experience is that they are never under — they are always on the right side.
Mr. Gentle: There was only 7/5.
The P.M.: That was all that was discovered. There wasn’t an audit.
In fixing the penalties, the P.M. said: “I am allowing for the errors made in the averaging. In the other cases the prices were fixed, and there should not be any difficulty. There was no room for any error.”
The Magistrate imposed the following fines: Soap, anchovy and sago, 17/10/ each case: fish paste, £5; and soda £12/10/. Professional fees £2/2/, witness’s expenses £1/6/2, and court costs 8/ were imposed in each case.
Price of Tea
Outlining the case against Hanna, Mr. Sneison said Mr. Ross had visited Hanna’s shop on May 21, 1941, and asked for certain details of buying and selling prices.
Prices for tea, Mr. Sneison said, had been fixed at that prevailing on December 31, 1940, plus 5d. This meant that Hanna should have been selling tea at 3/1, but he was selling at 3/2.
Mr. Biddulph said the breach had occurred at a time when the commercial public was not as fully appreciative of the National Security Regulations as they are now.
Goldenia tea, said Mr. Biddulph, had been a catch line at Hanna’s and had been selling at 1d below that charged by other stores at Armidale when prices were fixed, Hanna had continued to sell at the reduced price until approached by other storekeepers, who pointed out that he was underselling them in this line. He then increased the price to that at which other stores were legally able to sell, but in doing so he had committed a breach of the regulations.
The Magistrate said Hanna should have got other Armidale stores to reduce their prices. He knew of some storekeepers who sold commodities at a much lower price than other stores in the same town for the reason that these low-priced commodities had been catch lines when the regulations had been imposed.
Mr. Biddulph stated that the breach was a technical one and that no injury had been done to the public. He said it was significant that, in such a large business, a careful probe had revealed only one breach.
The Magistrate: Where a price is fixed a storekeeper can be under no doubt as to the price he should charge. “I have noted that prices are generally put up, and that they never come back,” he added.
Mr. Biddulph: This happened at a time when the regulations were new. your Worship.
Mr. Snelson; Tea was declared in September, 1939, and prices were fixed under this particular order in December, 1940.
Pegged Price of Rice
The case against Moran and Cato Pty., Ltd., concerned rice, the price of which had been pegged as at August 31, 1939, said Mr. Snelson.
On August. 31, 1939, Moran and Cato’s Armidale branch had been selling rice at 3½d per pound, but when the inspector visited there in May. 1940, the price was 4d per pound.
Mr. Biddulph said this was another case of a catch line. Moran and Cato’s had been selling rice at 4d, but just before the price was pegged they had reduced it to 3½d. Before the inspector’s visit, the price had been raised again to 4d.
The firm had 28 other branches in country towns and all had been selling rice at 4d per pound and were legally entitled to do so. said Mr. Biddulph. The metropolitan price was 3½d and cost of transport to Armidale was approximately ½d. Moreover, the ruling rate for rice at Armidale at the time of the offence was 4d, and all other shops were entitled to charge that price. “This firm has 78 branches, and this is the first offence,” he added.
The Magistrate: The prices regulations had been in operation for nearly two years. One would think that the firm would have had time to be come acquainted with them.
Mr. Biddulph: The local manager might make a mistake, especially as other branches of the same firm and other Armidale stores could charge the higher price.
The Magistrate: But 3½d was a fair price.
Mr. Biddulph: The Sydney price was 3½d. and it cost ½d to bring it to Armidale.
The Magistrate: Some country places farther out than this are selling rice at under 3d per lb. Isn’t that so, Mr. Ross?
Mr. Ross: Under 2½d.
Mr. Biddulph: They are losing money on it.