HC Deb 14 April 1943 vol 388 cc1211-3
52. Major York

asked the Parliamentary Secretary to the Ministry of Food whether he has any statement to make on the results of his costings investigation into the milk price structure?

Mr. Mabane

As the answer is long and contains many figures, I will, with my hon. and gallant Friend's permission, circulate it in the OFFICIAL REPORT.

Major York

Is the Minister aware that the figures given in the Press as to the alteration in the price structure make it clear that the small producer-retailer is a much more economic proposition than the large retailer, and will he bear that fact in mind in certain rural areas?

Mr. Mabane

Perhaps the hon. and gallant Gentleman had better read the long answer.

Following is the answer:

The costings investigation to which the hon. Member refers is a continuous one, the margins for milk distribution being reviewed every six months in the light of the findings of the investigation during the preceding period.

The costings investigation undertaken during the winter of 1942–43 shows that the costs of certain distributive functions in England and Wales have fallen as compared with the figures established by the costings investigation held during 1941–42.

The margins which have had effect since the 1st April, 1943, have been as follows. Comparisons with the margins which were fixed on the 1st October, 1942, are given.

Depot Allowance—

An average of 1¼d. per gallon, varying with throughput (No change).

Wholesale Margin—

2d. per gallon (No change).

Self-wholesaling Margin—

On a daily turnover of 750–999 gallons ½d. (instead of ¾d.) per gallon.

On a daily turnover of 1,000–1,249 gallons ¾d. (instead of 1d.) per gallon.

On a daily turnover of 1,250–1,499 gallons 1d. (instead of 1¼d.) per gallon.

On a daily turnover of 1,500 gallons and over 1¼d. (instead of 1¼d.) per gallon.

The self-wholesaling margin is allowed to those organisations which carry out a wholesale service to their own retail branches.

Retail Margin—

London 10½d. per gallon (instead of 11d. per gallon).

Provincial areas 9⅝d. per gallon (instead of 10⅓d. per gallon).

The reductions which have been made in the self-wholesaling margin and the retail margin represent a saving at the rate of £2,250,000 a year.

The costings investigation conducted during the winter of 1942–43 shows that the total costs of operation of the firms combining a wholesale and a retail function is approximately 1d. per gallon higher than the cost of operation of a firm carrying out a retail service only. On this basis the self-wholesaling allowance has been reduced by ¼d. per gallon and now varies from ½d. to 1¼d. per gallon (according to turnover) instead of ¾d., to 1½d. per gallon. The reduction in total margins experienced by a firm combining a wholesale and retail function is thus ¾d. per gallon as compared with a reduction of ½d. per gallon in the case of a small firm carrying out a retail service only. Where a retailer obtains his milk from an independent wholesaler that wholesaler receives 2d. per gallon for carrying out the wholesale service. Thus the remuneration allowed for distribution by a separate wholesaler and a separate retailer is greater than is the remuneration allowed to a single organisation combining in itself the two functions.