14. Commander Galbraithasked the Minister of Food what profit margin is allowed on rationed meat to retail butchers; and what changes to meet extra expenses have been permitted since the margin was originally fixed.
§ Mr. StracheyThe retail butchers' margin is designed to allow for variations in turnover and expenses, and to yield a reasonable net profit over the whole field of the trade's activities. Costings investigations into the actual profits earned by representative cross-sections of the trade are made from time to time, and wholesale prices adjusted by surcharges or rebates in order to leave the net margin at a reasonable level. The total net margin earned by the retail trade before the war is estimated at £12 million per annum. On the present ration of 1s. 4d. the total net margin is calculated to amount to £16¼ million per annum.
Commander GalbraithIs the right hon. Gentleman aware that a profit margin of 22½ per cent. was calculated in 1939, since when there has been a great increase in expenses? The present profit margin works out at about 17½ per cent. which is too low to allow in the case of many small retailers, a proper or reasonable standard of life.
§ Mr. StracheyI could not agree with the hon. and gallant Gentleman.
§ Colonel RopnerWill the Minister say what he thinks will be a fair profit for this trade?
§ Mr. StracheyI think that this is by no means an unfair profit.
Commander GalbraithCould not the Minister state the actual margin of gross profit allowed by his Department at present?
§ Mr. StracheyI have stated the total amount and the cross-sections of the trade upon which it is based. Any other answer would be misleading.