Silver Jubilee of Farm Products Distribution

Silver Jubilee

OF FARM PRODUCTS DISTRIBUTION

1932 – 1957

This Booklet has been compiled to commemorate the
25th Year
of

The Dominion Producers Co-operative Agency Limited.

Published and issued to Producers, Retailers and all those interested in the local marketing of Farm Products, with the compliments of the Directors.

PRINTED BY:
Tasman Printing Company Limited.

ART WORK:
Milsom Studios.

FOREWORD

It is twenty-five years since the Dominion Producers’ Co-operative Agency, Limited, popularly known as D.P.A., was first established. That it was built on sound principles is clearly manifest by its record of achievements over the years. That we now have ten flourishing Co-operative Marketing and Distributing Companies throughout New Zealand engaged in the distribution of primary produce from farm or factory to retail counter, is due in no small measure to the early work of D.P.A. It was the testing ground where new methods were tried out, and from which new ideas and worthy ideals were instilled in the minds of men who were eager and enthusiastic to work unceasingly to improve the conditions under which our primary produce was being marketed. The policy of the D.P.A. is not to serve the interest of the producer only, but to give a better and more efficient service to the consuming public through the medium of the retail trade.

We are proud of the D.P.A. in this respect. We are proud that our distributing companies throughout New Zealand have always made service their first consideration. They will always continue to do so. This, above all else, is of paramount importance. The D.P.A., as the head of this important movement, will continue to urge upon Directors and Administrative Officers of its respective companies, the vital importance of keeping abreast of the times, of seeking new and more efficient methods to do more and to do it better than in times past.

Twenty-five years is quite a long span in the life of an individual. It is but a short period in the life of an enterprise designed for permanency to serve primary industries with ever-increasing efficiency in the years that lie ahead.

The D.P.A. has progressed and grown to its present stature because it has always remained true to the co-operative principles upon which it was founded. Over the years, the men who have guided its destinies have worked unceasingly in the true spirit of co-operation for the common good of all and in advancement of the ideals in which they believed.

Many of them are not here today to see the full fruits of their labours, but the flourishing state of the movement bears testimony to the efficiency of their work. I sincerely hope that leaders through-out the industry will always be fully conscious of the very real benefits that are being derived from this grand movement and that those entrusted with the responsibility of its administration will always work together with unity of purpose, determined to carry on its true co-operative ideals, keeping the torch of service to the community and the primary producers ever burning brightly, so that those who follow on in the years to come may continue to enjoy the benefits of an organisation that has now become such an important part of our Dairying and Associated Primary Industries.

D.G. Begley

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FARM PRODUCTS CO-OPERATIVE MARKETING OF BUTTER

“Study the past, if you would divine the future.” – Confucius.

Just as a pebble dropped into a pool creates ripples which spread in ever-widening circles, so do the worthwhile actions of individuals, radiating outwards, affect the destiny of nations. So, too, some beneficial movement in trade or commerce, arising from small beginnings, may, by virtue of its own worthiness, grow to an institution of national importance.

In January, 1930, a group of co-operatively minded Dairy Company Directors decided to form the Wellington-Hawke’s Bay Dairy Companies’ Federation. The pebble which they dropped into the local marketing pool was the first producer co-operative organisation to distribute dairy produce in New Zealand.

A REVIEW – 25 YEARS

“Thy works and mine are ripples on the sea.
Take heart I say; we know not yet their end.” – Locrine.

Let us turn back the pages and attempt to assess our progress over the last twenty-five years. It will help us to appreciate the benefits derived by producer, retailer and consumer from the introduction of the smooth-running marketing methods of today.

Output Disposal

In those days the full responsibility for the sale and disposal of the output of a dairy factory rested with the directors of the company. Each individual company sold its produce for export to United Kingdom, either on “consignment” or on “f.o.b.” (free on board) basis to Tooley Street merchants of London.

When the goods were consigned to London, advances of 90 per cent of estimated nett realisations were arranged against shipments. On occasions when the London market receded, shipments on “consignment” realised less than the amount advanced. Unless the position was closely watched, the Directors of a Dairy Company would find that the monthly advances to suppliers exceeded the final nett realisations. Upon such unfortunate occasions reclamations had to be made from suppliers of milk and cream – an unhappy situation for both the farmers and the company.

The major problem confronting the Directors was one of deciding which marketing policy to adopt. The first alternative was that of forwarding produce on “consignment” to the London market; the  second lay in the acceptance of offers received periodically from Tooley Street to buy the butter and cheese when placed on board ship at a New Zealand port, i.e., “f.o.b.” The smallest fractional differences in payouts on butterfat between neighbouring factories were criticised to the detriment of the unfortunate Directors who, in the farmers’ judgment, had “consigned” instead of accepting a higher forward offer or, vice-versa, had sold “f.o.b.” on a rising market. It was a situation unsatisfactory to both the producer and dairy company.

Local Market versus Export

So much for the export position, but what of the local marketing conditions in New Zealand?

At that time butter sold within New Zealand showed a better yearly average return than that exported to London. This was due to a general decline in overseas prices, a decline further accentuated by the arrival of heavy shipments in London from New Zealand. The local price at any one time was, to a large extent, gauged by the current London values. Butter manufactured at the same time, but exported, was sold in London three or four months later at a much lower figure on a falling market. Thus, those dairy companies placing a large percentage of their output on the local market showed a better selling return than companies selling produce primarily for export.

Overlapping

Competition between factories for suppliers was rampant, with much overlapping in cream collection. Zoning of dairy companies was unheard of in the “good old days”. There was no “close season”; the whole year was open for canvassing, which was actively carried on in many districts. A striking example of the uneconomical results of such practice was that of a proprietary factory at Ormondville collecting cream from Himatangi in the Foxton district after passing all the intervening butter and cheese factories. Under these conditions of cut-throat competition, the “exporting factories” took defensive action in one or other of two ways: some set about attempting to secure a larger portion of the local market, others to make the local market price unattractive.

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District Butter Committees

In some districts attempts were made to fix a uniform selling rate for butter on the local market. Local committees were formed for that purpose but, through the frailty of human nature, these “gentlemen’s agreements” were “more honoured in the breach than in the observance”. Among the many merchant distributors at that time were those who indulged in speculation on the basis of inside rate for butter on the information regarding intended price rises – information obtained at District Committee Meetings. There were others who gave hidden rebates, such as special allowances on empty returned containers. Perhaps the most pernicious selling method ever adopted in local marketing was the gift coupon scheme. Under this scheme a coupon was given with each pound of butter and, when sufficient coupons had been saved by the housewife, she was entitled to exchange them for such articles as cutlery, glassware, and even silk stockings, according up to the number of coupons that she had saved. Strange as it may seem with the wholesale price of butter then at times as low as 1/- per pound, the commission allowed to merchants was 1¼d. to 1½d. per pound – this in addition to the gift coupon given with each pound of butter.

Wellington-Hawke’s Bay Dairy Companies’ Federation

Realising that this “economic cannibalism”, for it was nothing less, could be allowed to continue no longer, the Directors of thirty-one Butter Companies and two merchant firms decided, in January, 1930, to join forces to form the Wellington-Hawke’s Bay Dairy Companies‘ Federation. Their objects were stated as follows:

“To arrange from time to time and to regulate selling rates of butter sold on the local market in the Provincial Districts of Wellington and Hawke’s Bay.”

The earnestness of the Federation’s attempts to co-ordinate the work of members and to eliminate malpractices is amply shown in the minute books of that period from which the following apt extracts are taken.

1.   The Federation and prices –
“That the time has arrived when the Federation should commence fixing prices of local butter and that a Committee of the Federation be set up and circularise all factories on our list of the price so fixed from time to time.” 25th July, 1930.

2.   The Federation and the free gift scheme –
“That the Federation deprecates free gift schemes in connection with the marketing of butter and urges its members to take such steps as will result in the discontinuance of the practice; Secretary to notify members of this resolution.”
22nd August, 1930.

“That the Wellington Committee be advised that this Federation has been unable to arrange for the early termination of the gift scheme.”
17th October, 1930.

Photo caption –

Familiar to every citizen of Wellington – one of the 16 Delivery Vans now servicing the retailers of cities of Wellington and Hutt.

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“This Federation expresses its strong disapproval of all gift schemes. It makes a strong appeal to the Wellington Merchants to keep together and agree that any scheme that may be launched and any scheme at present in force be terminated not later than 14th February, 1931.”
7th November, 1930.

“That the National Dairy Association be asked in conjunction with the Associated Chambers of Commerce to arrange a deputation to the Government with a request to promote legislation immediately to make illegal the pernicious practice of the present coupon system of selling butter and other dairy produce on the local market.”
28th November, 1930.

(Note – Gift Coupon Schemes for all commodities were subsequently abolished by legislation.)

3.   The Federation and co-operative marketing –
“That a Committee be appointed to bring down a scheme for co-operative marketing of butter in the Federation area and to report back to a meeting of Federated Companies – carried unanimously. That the following Committee be appointed:
Mr. H.E. Pacey (Joseph Nathan & Company Limited)
Mr. J.W. McConnon (Rangitikei Dairy Company Limited)
Mr. J.W. Rodden (Kairanga Dairy Company Limited)
Mr. P.B. Desmond (Cheltenham Dairy Company Limited)
Mr. S.A. Broadbelt (Levin, ex officio) .”
28th November, 1930.

“That the report as presented by the Committee be adopted by this Executive.”
19th March, 1931 (Executive Meeting).

“The Chairman (Mr. S.A. Broadbelt) addressed the meeting on the proposals brought down by the Special Committee set up to deal with the sales of butter on the local market, he then read through the report and moved its adoption which was carried unanimously.”
16th April, 1931 (General Meeting).

Briefly this report recommended the formation of a central Company with legal status in which each Butter Company in the area of Wellington-Hawke’s Bay would hold a nominal shareholding, the object being for the purpose of a formality for equalization of local butter sales through a co-operative organisation.

Photo caption –

(Photograph taken February, 1952)
ORGANISATION COMMITTEE OF DOMINION PRODUCERS’ CO-OPERATIVE AGENCY LTD., 1931-34
P.B. Desmond,
J.W. McConnon,
J.W. Rodden.

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FORMATION OF THE DOMINION PRODUCERS CO-OPERATIVE AGENCY LTD.

The name selected for the Company was the Dominion Producers’ Co-operative Agency, Limited, with subscribed capital of only £56 from 22 Butter Companies in the Wellington-Hawke’s Bay area. The first meeting of Directors was held at Palmerston North on Tuesday, 19th April, 1932. The original directors were: Mr. S.A. Broadbelt (Levin) (Chairman), Mr. D.G. Begley (Hastings), Mr. R.G. Dalziell (Rata), Mr. N. Campbell (Awahuri), Mr. J.M. Devine (Kairanga), Mr. C.G.C. Dermer (Cheltenham), Mr. J.C. Ewington (Masterton), Mr. A. Haworth (Wanganui), Mr. H.E. Pacey, (Palmerston North).

Mr. D.G. Begley is the only sitting Director of the original Board: he was appointed Chairman of Directors upon the retirement of Mr. S. A. Broadbelt in June, 1943.

The Directors appointed Mr. J. W. McConnon as Managing Secretary, a position which he filled for five years with efficiency and enthusiasm.

An Organisation Committee comprising Mr. J.W. McConnon, Mr. J.W. Rodden (Kairanga Dairy Company) and Mr. P.B. Desmond (Cheltenham) was associated with the Directors in introducing this revolutionary system for the organisation of the local marketing of butter within the area of Wellington-Hawke’s Bay Provincial Districts including the City of Wellington.

Little did the foundation members envisage the enormous amount of organisation involved in trying to weld together in a mutual pact all the Butter Companies together with thirty merchants and other firms then distributing butter in these areas. Each Butter Company entered into an agreement with the Dominion Producers’ Co-operative Agency, Limited, whereby all butter sold in the area was pooled for equalisation purposes on an output basis. The area was divided into six price zones to allow for flexibility in meeting local circumstances. Dairy Companies, in turn, entered into separate Agency Agreements with their respective distributors to observe the terms and conditions of the main Agreement. The necessary intricate legal documents were capably drawn up by Mr. B.J. Jacobs, Solicitor, of Palmerston North.

Furthermore, to enable the plan to function, it was necessary to obtain the endorsement of the New Zealand Co-operative Dairy  Company, Limited, who supplied Picot Bros., Limited, with 1,000  tons of butter per year from Waikato District for sale in Wellington and Hawke’s Bay Districts. An appropriate agreement was made with the New Zealand Co-operative Dairy Company, Limited, with a subsidiary agreement with their distributors to observe similar trading terms and conditions.

Photo caption –

DIRECTORS AND EXECUTIVE OF DOMINION PRODUCERS’ CO-OPERATIVE AGENCY LTD., 1957
E.J. Matthews, J.F. Cowdrey, W.W. Cruden, M.S. Mitchell, L. Hitchcock, D.K. Guy, T.S. Dove, D.G. Begley (Chairman), P.B. Desmond (Secretary), J.R.L. Hammond, W.D. Harris, R.J. Law, W.A. Phillips, T.E. Wilson, A.H. Hansen.

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“Eternal Effort is the Price of Success”

The records of the early stages of this plan reveal a series of disappointments and troubles interspersed, for good measure, with two Supreme Court cases. There were no idle moments for the Organiser-Secretary, Mr. J.W. McConnon, whose dynamic personality and energy never flagged in these strenuous efforts to bring order out of chaos. However, during the subsequent five years down to 1937, this organisation gradually secured fair marketing conditions for both producers and retailers. In these first five years of active operations, the total amount of cash surpluses distributed to member companies was £120,414, representing savings that would otherwise have been dissipated under the old order of inter-factory cut-throat competition.

After five years’ activity, the operations of the organisation came to an end through a change in Government policy. The Internal Marketing Department then assumed control of sales within New Zealand of butter, cheese and eggs. The New Zealand Government purchased the business and premises of Picot Bros., Limited, and Mr. F.R. Picot was appointed Director of Internal Marketing. Mr. J.W. McConnon’s experienced services were sought after and acquired by the Internal Marketing Department as Local Market Manager.

At this stage, the question of disbanding the Dominion Producers’ Co-operative Agency, Limited, was debated. Fortunately wise counsel prevailed, and the Company was retained as a legal entity. The registered office of the Company was transferred to the care of Mr. P.B. Desmond of the Cheltenham Co-operative Dairy Company and, later, in 1942, to Farm Products Co-operative (Manawatu), Limited.

During the period of recess from 1937 to 1946, the active operations of the Company were negligible; there being no annual income, the Directors and Secretary acted in a purely honorary capacity.

“Courage is the Thing … All Goes if Courage Goes” – J. M. Barrie

However, there was real activity in producer Co-operative Marketing in the Hawke’s Bay District where the Butter Companies were very dissatisfied with the methods of distribution of their produce by several competitive merchant firms. In 1937, the five Dairy Companies (Wairoa, Heretaunga, Norsewood, Tamaki and United) decided to form their own Co-operative Marketing Company to handle and distribute their butter on the local market.

In this venture, the Dairy Companies were fortunate in having the leadership and driving force of Mr. D.G. Begley, Chairman of Directors of the Heretaunga Co-operative Dairy Company, Limited.

This was no chicken-hearted effort, for there was no lack of obstacles put in the way of this, the first Provincial Farm Products Co-operative Company. However, the Directors of the five associated Butter

Photo caption –

Artist’s impression of proposed 4-storied building to be erected at corner Thorndon Quay and Davis Street, Wellington, for Farm Products Co-operative, (Wellington), Ltd.

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Companies staunchly and fearlessly faced up to strong opposing mercantile interests and eventually proved that their ideals were not only sound in principle but also workable in actual practice. They proved, too, that, under able management and administration, co- operative marketing by producers of their own produce can be more efficiently and economically handled, not only in their own interests but also to the ultimate benefit of retailers and consumers.

The Hawke’s Bay Company commenced operations in June, 1937, their example being taken up by other districts in the following order – Manawatu in 1942, Westland in 1942, Wanganui in 1943, Gisborne in 1944, Nelson in 1944, Wellington in 1946, Tararua in 1946, and Marlborough in 1949.

When the New Zealand Government purchased the business and premises of Picot Bros., Limited, in 1937, the major part of this business was continued in the City of Wellington and environs by the Internal Marketing Department in competition with eight merchant distributing firms handling dairy produce and eggs. The need to conserve both petrol and man-power in war-time called for the elimination of wasteful overlapping in distribution and, as a result, a private company named Combined Distributors, Limited, was formed by the combination of the eight merchant firms and the Internal Marketing Department. It was a company unique in its constitution – two-thirds of the shares were held by the merchants and one-third by the Government; and the paid-up capital was only £400 despite the annual sales turnover of £1,000,000. The liquid cash requirement for the running of the business was obtained from sales of butter for cash received in fortnightly payments, whereas the Company paid out to the Dairy Companies for butter on the 20th of the month following delivery.

This amalgamation of distributing bodies into one organisation was effective in bringing about considerable economies under the capable management of Mr. E.J. Matthews, now General Manager of Farm Products Co-operative (Wellington), Limited.

Photo caption –

Insulated Delivery Vans – Farm Products Co-operative (Hawke’s Bay), Ltd., Hastings.

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THE MIDDLE-MAN DISAPPEARS

After the formation of Farm Products Co-operatives in the Provincial areas of Hawke’s Bay, Wellington and Nelson, the participating Dairy Companies claimed the right to market and distribute their own produce to retailers in the Metropolitan area of Wellington. They were already carrying out this work of distribution in the rural districts where service was more costly than in the more concentrated market of the City and its environs, and it seemed only logical and equitable that they should thus extend their field of direct contact between the producer agency and retailer.

In consequence, persistent approaches were made by the Board of the D.P.A., acting on behalf of the producers, to persuade the Government to transfer its financial interest in Combined Distributors, Limited to the D.P.A., on the grounds that it was their right, and not that of the merchants or the Government, to handle the distribution of their own produce from factory to retailer.

FARM PRODUCTS CO-OPERATIVE (WELLINGTON) LIMITED

As the result of long negotiations, agreement was reached on 1st May, 1946. Under this agreement, the merchant firms agreed to dispose of their interests in Combined Distributors, Limited, to the Producers and the Government who were to combine on a 50/50 shareholding basis, to form a new trading company – Farm Products Co-operative (Wellington), Limited.

The whole of the nett surplus earned by this Company was to be rebated to the producers through the holding Company, the Dominion Producers’ Co-operative Agency, Limited.

To this end, the nominal capital of the Dominion Producers’ Co-operative Agency, Limited, was increased to £50,000 on 1st March, 1946, with the enthusiastic approval of a meeting of 200 representatives of 30 member Dairy Companies. Two thousand four hundred £1 shares were applied for, upon which 5/- per share was paid in cash – all the remaining share capital of the Company has subsequently been paid up from annual rebates.

“Do Better Today the Things Done Well Yesterday”

Over the next seven years, Farm Products Co-operative (Wellington), Limited, by providing an efficient distributing service, earned the full confidence of the retail trade. At this point, the producers raised the question as to whether there was, in fact, a need for the Government to continue to hold shares or to take any active part in the affairs of the Company. The producers submitted their case for acquiring full ownership of the Company. It was based on the following grounds:

1.   That the function of the Government is to lay down and administer but not itself actively to operate its own Marketing Regulations.
2.   That, under true democracy, the rights of consumers as well as those of producers are protected. The laws of this country under strict Price Orders, well-defined Marketing Regulations, Weights and Measures Regulations and Health Regulations, adequately protect the consuming public in matters relating to the sale of essential foodstuffs.

Photo caption –

DIRECTORS AND EXECUTIVE OF FARM PRODUCTS CO-OPERATIVE (WELLINGTON), LTD., 1957
T.E. Wilson, W.A. Phillips, T.S. Dove, D.G. Begley (Chairman), E J. Matthews (General Manager), J.F. Cowdrey (Secretary), W.D. Harris, R.J. Law.

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On 1st March, 1953, the Directors of the Dominion Producers’ Co-operative Agency, Limited, finalised with the New Zealand Government for the purchase from the Crown of the Internal Marketing Department’s property situated on Thorndon Quay and Davis Street, Wellington, and the Government’s shareholding in Farm Products Co-operative (Wellington), Limited, for a total consideration of £60,400.

“Serve Better Today Those Whom We Served Yesterday”

On acquiring the full ownership of this centrally situated property, the Directors immediately embarked upon a plan to erect modern food-distributing premises in keeping with the policy of efficient service under producer co-operative marketing. Plans and specifications for this major undertaking are in course of preparation and a reproduction of the Architect’s drawing of the proposed premises is shown in this booklet. Another step forward in the improvement of service was taken by the Directors in 1951, when the Company purchased a property on the Hutt Road where Farm Products Co-operative (Wellington), Limited, now operate a branch depot to facilitate local distribution to Lower Hutt City, Upper Hutt and District.

The extent of the volume of Farm Products handled by the Wellington Company is not generally known, so a few facts on quantities and values may be both interesting and enlightening. The figures given are for 1956/57, the latest financial year for which totals are available.

The Annual Sales turnover was: Wellington, £2,086,000; Oamaru Branch, £80,000.

The Company’s butter patting department handled 4,535 tons of butter, all of which was patted under hygienic conditions by modern machinery. The number of butter wrappers used was 9,300,000. The printing of butter wrappers alone is, therefore, a fair-sized undertaking.

2,933,294 dozen eggs were graded and distributed for sale by the Company. The Company operates a branch at Oamaru where 986,322 dozen were collected from poultry farms and despatched to Wellington in regular batches by special air transport. Eggs are received by the Wellington Company from Poultry Producers in the Hutt, Wairarapa, Horowhenua, Taranaki and Marlborough Districts and also from collecting centres in Christchurch, Nelson, Wanganui, Manawatu, Gisborne and Hawke’s Bay.

The Oamaru Branch has also developed a large Table Poultry Processing Service for local Poultry Producers. The number of table birds processed this year was 57,800.

The Company maintains a fleet of 16 delivery vans to service the Cities of Wellington and Lower Hutt and their environs within a radius of approximately 25 miles of the General Post Office.

The total number of staff employed in all departments is now 105.

The management is in the capable hands of:
Mr. E.J. Matthews (General Manager)
Mr. J.F. Cowdrey (Secretary/Accountant)
Mr. F.J. Eggers (Assistant Manager)
Mr. W. Lockyer (Sales and Distribution)
Mr. E. Swaysland (Egg Store Manager)
Mr. L. Rudman (Butter Patting Department)
Mr. D. Jackson (Hutt Branch)

Graph caption –

5-year cycle – Total Sales Turnover – Farm Products Co-operative (Wellington), Ltd.

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Five Directors are appointed by the Dominion Producers’ Co-operative Agency, Limited, to administer the Company’s policy of service to retailers.

The personnel of the directorate is:
Mr. D.G. Begley (Managing Director)
Mr. R.J. Law (Representing Butter Producers)
Mr. T.E. Wilson (Representing Butter Producers)
Mr. T.S. Dove (Representing Poultry Producers)
Mr. W.A. Phillips (Representing Bacon Industry)

Dominion Producers’ Co-operative, Agency, Limited

Statement of Share Capital Ingathered and Invested

CAPITAL:

As originally authorised in 1932   £1,000
Subscribed and paid up from inception to August, 1946   £56
Increases in Capital:
28th August, 1946 – increased by £30,000 to £31,000
30th June, 1949 – increased by £69,000 to £100,000
25th June, 1952 increased by £50,000 to £150,000
20th March, 1956 — increased by £100,000 to £250,000
Present authorised capital   £250,000
Issued capital   £243,089
Uncalled capital   £81,732
Paid capital   £161,357

CAPITAL INGATHERED:
Paid up in cash (5/- a share on first issue of 23,985 shares)   £5,996 5 0
Amounts paid through deductions from rebates   £155,360 15 0

FARM PRODUCTS CO-OPERATIVE (HAWKE’S BAY) LIMITED

The Butter Manufacturing Companies throughout New Zealand, whilst doing an excellent job in the collection and manufacturing side of the business, did little or nothing towards providing distributive services to carry the finished product to the retail trade. Those Dairy Companies interested in the local market employed other business organisations to carry out distribution on their account.

This system had many shortcomings, as agents of the merchant distributors, seeking increased turnover in competition with other agents, resorted to granting secret discounts in various forms – discounts intended to undermine the price-stabilising agreements already in existence. (See page 3.) To enable them to carry on this practice, much higher distributive allowances were charged against  Dairy Companies than were really necessary. In addition, these

Graph caption –

Graph showing volume of sales of eggs by Co-operative Floors as compared with total sales of eggs by all distributors.

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same agents were quick to resort to speculative practices at the approach of every price change. It was, therefore, only natural that retailers were encouraged to seek from agents higher discounts, especially in cases where large turnover was involved. Many Dairy Factories were encouraged by agents to participate in meeting these discounts.

This unstable state of affairs was not in the interests of the retailer or the manufacturer. It is a point of fact that, in some areas, retailers were forced to sell butter at its wholesale cost because some large selling organisations were able to secure sufficiently attractive discounts to enable them to cut the price very substantially, to the detriment of other members of the trade. To endeavour permanently to eliminate these practices and to serve the industry in a more satisfactory manner, the first Co-operative Farm Products Company was formed in Hawke’s Bay in the year 1937.

The Directors of each Dairy Company manufacturing butter had the proposals carefully explained to them in April, 1937. As a result, a combined meeting of all chairmen was held in Hastings on the 24th April, 1937. This meeting resulted in complete agreement on the scheme and approval for immediate action.

The very first step taken was to secure the option on a suitable site where buildings for the new venture might be erected.

The next step was to obtain the approval of the Marketing Department and Government to the formation of such a Co-operative. This necessary approval was given on 28th April, 1937, as the result of full and detailed negotiations.

Work on the erection of the new buildings was immediately authorised and the Articles and Memorandum prepared for submission to the Registrar.

In the choice of a name for the new Company many suggestions were put forward, and finally the name of the “Hawke’s Bay Co-operative Farm Products, Limited” was decided upon and duly registered. This name was, however, changed some years later to “Farm Products Co-operative (Hawke’s Bay), Limited” for the trade had very quickly become accustomed to call the company “Farm Products”, a term that caused some degree of confusion in referring to telephone directories. It was, however, pleasing that the choice of name decided upon was most suitable and proved to be adaptable to other companies formed in other areas in subsequent years.

In the setting up of the new business a complete staff had to be engaged, vans purchased and freezers and other facilities installed.

While all this and other important matters were being attended to, the retail trade became very apprehensive about the merits of the proposed Company and the service they were likely to receive.

These feelings of anxiety were largely, if not entirely, due to the Dairy Companies’ Agents spreading propaganda amongst the retailers, in their efforts to destroy confidence and goodwill towards the new company. So intense did this feeling grow, that it became necessary to call a meeting with representatives of the trade in order to explain in fullest detail the intended policy of the new company. The record of the proceedings of this important meeting ran into twenty-two foolscap pages which, even today, provide most interesting reading.

However, the outcome of the meeting was a unanimous resolution pledging full support and co-operation to the Farm Products Company, providing its trading and policy administration were carried out in the manner described to the meeting.

Photo caption –

DIRECTORS AND EXECUTIVE OF FARM PRODUCTS CO-OPERATIVE (HAWKE’S BAY) LIMITED, 1957
Standing: G.W. Powdrell, M.S. Mitchell, A.L. Anderson.
Sitting: A.L. Malcolm, D.G. Begley (Manager), A.H. Hansen, O.B.E. (Chairman), M. Parkhill (Secretary), D.T. Mabey.

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The Farm Products Co-operative (Hawke’s Bay), Limited, opened its doors and commenced trading on 1st September, 1937. The shareholders in the company at that time were:
Heretaunga Co-operative Dairy Company
Norsewood Co-operative Dairy Company
Tamaki Co-operative Dairy Company
United Co-operative Dairy Company
Wairoa Co-operative Dairy Company
New Zealand Co-operative Pig Marketing Association.

The original Directors of the Company were:
Mr. E. Harding, Woodville (Chairman)
Mr. W.A. Phillips, Auckland
Mr. W. Jenkins, Norsewood
Mr. A.T. Carroll, Wairoa
Mr. D.G. Begley, Hastings.

The initial capital of the company was £6,000 paid up to five shillings in the pound.

In 1941, the company was approached by local poultry producers to undertake the grading, packing and distribution of eggs. At this time no Egg Marketing Areas had been licensed outside main city centres. Poultry Producers were encouraged to form a co-operative company under the Company’s Act. Approaches were made to the Poultry Board and Marketing Department for the granting of a licence and marketing area to Hawke’s Bay. This was finally approved and Hawke’s Bay was the first Egg Marketing Area licensed outside the cities. The Company entered the egg business immediately, and five years later admitted the Poultry Producers as shareholders in the Farm Products Co-operative (Hawke’s Bay), Limited. The total number of eggs handled in 1955/56 was 833,188 dozen. 6,977 28Ib.-tins of egg pulp were also produced.

In subsequent years, the producers pressed for the setting up of a grain, mash and produce department. This was carried out, and two modern mash mills were installed, in addition to a Templewood Press for the manufacture of poultry and stock food pellets.

The paid-up capital of the Company as at 31st March, 1956, was ₤70,000.

Directors of the Company for 1957 are:
Mr. A.H. Hansen, O.B.E., Tamaki Co-operative Dairy Company (Chairman)
Mr. G.W. Powdrell, Wairoa Co-operative Dairy Company
Mr. A.L. Andersen, Norsewood Co-operative Dairy Company
Mr. A.L. Malcolm, Heretaunga Co-operative Dairy Company
Mr. D.T. Mabey, United Co-operative Dairy Company
Mr. W.A. Phillips, N.Z. Co-operative Pig Marketing Association
Mr. M.S. Mitchell, Hawke’s Bay Co-operative Poultry Producers
Mr. D.G. Begley (General Manager)
Mr. M. Parkhill (Secretary)

Graph caption –
Graph showing growth of Annual Sales Turnover of Farm Products Co-operative (Hawke’s Bay) Ltd., Hastings.

Page 13

The Company gives a direct delivery service of butter, cheese, eggs, egg pulp, bacon, smallgoods, milk powder and other allied produce to the retail trade in Hastings, Napier, Waipawa and Waipukurau from modern insulated vans which guarantee the continued delivery of high quality produce from factory to retailer. The towns of Dannevirke, Woodville, Norsewood and Wairoa are serviced direct by the Shareholding Dairy Companies by arrangement with the central Distributing Company.

The Company, at the commencement of its operations, promised the retail trade that the service would not be reduced without prior consultation with the trade.

During the war years the rationing of petrol placed the Company under severe handicap in maintaining the service throughout the large area covered. However, rather than restrict the service to the various centres, all vans were fitted with gas producing plants and full deliveries carried on without interruption.

It is, therefore, most gratifying that, in the nineteen years of the Company’s operations, the business has grown from an average monthly turnover of £9,248 in the first year to £51,693 in 1955/56.

“The future I may face now I have proved the past.” – Browning.

These magnificent results have only been made possible by the loyal work and co-operation of all concerned. Shareholders, Directors, Producers, members of the Staff and Executive Officers have all played a most important part. We consider it most fitting and appropriate to place on record our appreciation of the co-operation, help and understanding which the officers and members of the staff have, at all times, received from the retail trade over the years. When difficulties were encountered, such as the rationing of commodities due to temporary shortages following holiday periods, the members of the retail trade have always been most helpful, tolerant and understanding. For this we are deeply appreciative and grateful.

FARM PRODUCTS CO-OPERATIVE (MANAWATU), LIMITED

Farm Products Co-operative (Manawatu), Limited, was established on 31st March, 1942, with the Awahuri, Cheltenham, Kairanga, and Rongotea Dairy Companies, the Dairy Union and the New Zealand Co-operative Pig Marketing Association, Limited, as shareholders. Subsequently, the Dairy Union ceased operations and the Apiti Dairy Company was admitted.

Later, in 1944, local Poultry Producers formed themselves into a united body with legal standing, namely, The Manawatu Co-operative Poultry Producers’ Company, Limited, and immediately linked up with the Farm Products Company – the members of the Poultry Company thereby participate in rebates on eggs supplied for marketing through this co-operative organisation.

The original capital of the Company was £6,000 upon which 5/- per share was paid in cash. All the remainder of the capital was subsequently paid up from annual rebates. The present paid-up capital is £39,569.

Photo caption –

DIRECTORS AND EXECUTIVE OF FARM PRODUCTS CO-OPERATIVE (MANAWATU), LTD., 1957
Standing: C.S. McNally, J.Q. Cameron, D.F. Jones (Accountant), R.C. Hamilton, H.H. Jensen.
Sitting: L. Hunter, P.B. Desmond (Manager), W.W. Cruden (Chairman), G.N. Hawken (Secretary), B.L. Ebbett.