HC Deb 03 April 1951 vol 486 cc164-74

Motion made and, Question proposed, "That this House do now adjourn."—[Mr. Popplewell.]

10.18 p.m.

Miss Barton (Coventry, South)

I wish to raise the question of the distribution of costs of home grown fruits and vegetables. Some eight weeks ago I was able in the House to raise the question of the increase in the price of these commodities at weekends. That was satisfactory in the sense that the following weekend the vans which were selling vegetables in my constituency carried a large poster stating "No price increases today." On that Saturday we had a public meeting in Coventry, at which there were present many consumers, retailers and wholesalers. The decision of that meeting was that prices certainly went up at the weekends, and it was not the slightest use the retailers telling the housewives that they did not. One of the most interesting arguments put forward was when a retailer told us that prices did not go up at the weekends but went down on Mondays. We thought that that was the best reason that we had been given.

Tonight I am going to deal with a much more difficult problem, that of distribution. I am tackling it for a reason with which I think the House will agree. It is because of the difference in price between that received by the grower or producer, and the price which all of us as consumers have to pay in the shops. I want to ask with a big question mark, is such a difference really necessary? It is a difficult problem because the system is complex and the produce varies. I appreciate that, unless comparisons really are valid, objection will always be taken to them, but the House will appreciate the difficulty, because the only way to make one's comparisons completely valid would be to turn into a cabbage and go from the patch where the cabbages grow right through to the shop as the same cabbage. Short of doing that, we cannot say that it is exactly the same.

But that is not possible, and, therefore, tonight I am trying to be completely non-party—it is not a party matter—and I am assuming that everyone in the House would wish to reduce the price to the consumer while giving a fair margin of profit to the producer, the wholesaler and the retailer. I want to find out tonight if the wide difference which I have mentioned does exist and, if so, whether we can direct public attention to it.

Three weeks ago I went to Covent Garden early in the morning. I realise that Covent Garden is peculiar to this city, but I wanted to find how the system works there. I should like to say "thank you" to the porters, the salesmen and the wholesalers who were good enough to take me round. If the House is already aware of this information I apologise for giving it again, but it is necessary to do so. In Covent Garden the wholesalers sell on commission which varies from 5 to 10 per cent. Most of the wholesalers would say that it varies from 7½ to 10 per cent., but in some cases it is as low as 5 per cent. if a wholesaler wants to keep a grower who has sent him good produce and is not prepared to allow a larger commission to be deducted.

There is the Covent Garden Tenants' Association, which has certain recognised charges. These are 10 per cent. commission with the wholesaler's own empties and 7½ per cent. commission with the grower's own empties. The merchants decide each morning what they will charge. In other words, they have to get the feel of the market. If they charge too much their goods will hang fire, and if they charge too little their goods will go very quickly and the grower will protest because higher prices have not been gained. It is true to say that the wholesalers of Covent Garden have to maintain a market level of prices.

In passing, it is interesting to note that at Covent Garden there is a system of porterage which is not common to wholesale markets elsewhere. A merchant in Covent Garden cannot just take on a porter from anywhere. He must apply to the union, which is the Transport and General Workers' Union, and if he can show that the wages of his porters are above a certain amount—I could not discover the amount—he is allowed to take on an additional porter, who is given a badge by the Association.

As I thought the House would be interested, I tried to discover the average earnings of a porter in Covent Garden. I am chary about giving the information, because those who get less rush in and say they do not get anything near the amount, while I suppose those who get more are prepared to leave the matter alone. However, I found from the inquiries I was able to make that the average earnings of a porter in Covent Garden today are about £10 per week, but I would qualify that by saying that some get less and some more.

Mr. Ellis Smith (Stoke-on-Trent, South)

Engineers get £7.

Miss Burton

The figure of £10 includes a retaining fee which has to be paid by the merchants to all their porters.

To come to the question of the wholesaler, obviously the wholesaler anywhere has overheads. He has his rent in the market, which in London is quite considerable, he has a staff of clerks and he has the retainers to his porters. The grower sending his produce to London pays all the market charges. He pays carriage or transport, he has to pay commission, he has to pay tolls. In Covent Garden tolls are levied on every package according to its contents; the only exceptions are grower-producers selling their own stuff in the market. And, of course, he has to pay porterage.

As far as London is concerned, the retailer comes to Covent Garden, he has to employ a badged porter and he has to pay the porterage charges for taking the stuff out of the market. Everybody I saw in Covent Garden seemed quite prepared to agree that when prices went up in the market they went up in the shops. What I am not convinced about, and what I am quite sure the housewife is not convinced about, is that when prices go down in the market they also go down in the shops.

It was on Tuesday, 13th March, that I went to Covent Garden, and on that date the price of cabbages and of all root vegetables there was under 1d. a lb., not in one place but right through the market. I do my own shopping and I have never been able to get cabbage at anywhere near 1d. per lb. On my way home on that day I called in at one or two of the small shops near me. As I have said, I cannot say they were the same cabbages, but most housewives know what cabbages look like, and they looked like the same type. That same type of cabbage was 4d. a lb., that is, a difference in price of 300 per cent.

Before I went in to the shops I took this up with the merchants in the Garden and they advanced the following reason to me. The wholesalers said, "The housewife who wants to buy 2 lb. of cabbage will not buy more than that if we put the price down, so it is not worth putting it down." I have two remarks to make on that. First, I think it would be a good idea to give her a chance; secondly, if she only wants 2 lb. of cabbage, I do not see the slightest reason why she should have to pay three times as much for what she wants.

It is no use raising matters unless one can bring a certain amount of definite factual information. I have here the prices of certain vegetables for the week ending 27th January. That date was not chosen because it bolsters up my case, which is either a good or a bad one; they merely happen to be the figures obtaining in London for that week. The vegetables are cabbages, carrots, turnips, lettuces and potatoes. Of those only potatoes were price controlled. To be as fair as possible I have taken the lowest price for comparison, with the exception of carrots, and I have the price paid to the grower, the price wholesale in Covent Garden, and the price retailed in the shops. The prices are per cwt. unless stated otherwise.

Cabbages: Kent, 4s. per cwt. was the average price the grower received; 6s. a cwt. was the price at which the wholesaler sold them at the market; the average price in the London shops was 28s. per cwt. That is a difference of 700 per cent. between what the grower received and the price in the shops. Carrots—Bedfordshire, Hunts., and Cambridge: Taking the lowest price of carrots produced such an incredible result that I thought it must be wrong, and so I favoured the other side, as it were, by taking the highest price. Carrots, 6s. 6d. to the grower, 10s. in the Market here, 28s. in the London shops. That is a difference of 425 per cent. Turnips: Essex, 6s. to the growers, no quotation for the wholesaler, 28s. in the shops. That is 475 per cent. Lettuces per dozen, from Bedfordshire, Hunts., and Cambridge were 2s. to the grower, 3s. in the market and 8s. in the shops; that is 400 per cent. Potatoes, Grade A 4, King Edward type, Lincolnshire, were 9s. 1½d. to the producer, 11s. 11½d. in the market, and 15s. 4d. in the shops; a difference of 75 per cent.

I think the House will be interested to note that the difference in the price of controlled produce is 75 per cent. In the free market, where obviously I know we are subject to availability of supply, to variety of quality and demand, the difference ranges from 400 per cent. to 700 per cent. I am back to what I said at the beginning; is such a difference really necessary?

I want to go to my native city of Coventry. In the last matter I raised, about the high prices of fruit and vegetables at the week-ends, the wholesalers rushed into the fray and nobody had mentioned them, but on this matter they said they would give me their co-operation. They gave me some prices for Coventry for the week ending 19th January, for vegetables such as spring cabbage, carrots, turnips and sprouts. I wanted, if possible, to be able to compare these with the retail prices, but could not get retail prices for the shops. However I have the retail prices for the industrial Midlands, of which Coventry is a part. I should like to make that clear; and I think the comparison is good enough.

For spring cabbage the wholesaler on the average received 5s. per 40 lb., but the selling price in the industrial Midlands was 13s. 4d.: that is a difference of more than 150 per cent. The price of carrots was 11s. 7d. per cwt. received by the wholesaler and the price in the shops was 28s.; again a difference of 150 per cent. These wholesalers' figures come from the Coventry and District Wholesale Fruit and Vegetable Merchants' Association.

Mr. Nabarro (Kidderminster)

Where did these carrots come from? Were they from Worcestershire, or Bedfordshire or Cambridge?

Miss Burton

I appreciate the hon. Gentleman's interest in Worcestershire, but I am afraid I do not know where these came from. I am trying, in this instance, to compare the actual difference in prices that the wholesalers received and the consumers had to pay. That is the point I am on in this matter. For sprouts, the wholesaler received 5s. 10½d. per 20 lb., and these were sold in the shops at 13s. 4d.; a difference of 125 per cent. These figures represent profit apparently far in excess of that put forward by the Retail Federation. If they are not wholly profit and if some large amount is swallowed up in expenses, I want to know how much is expenses and how much is profit.

Obviously, there would be no point in raising this unless I had suggestions to offer. I have three to put forward to the Parliamentary Secretary. It appears that there are two systems of distribution used in this country—commission by consignment, which is the system used at Covent Garden; and the other is that of net return to the grower or producer. Now that of the net return to the grower or producer is open to abuse, because a great many producers are quite content if they get the net return for which they asked and they do not look at the deductions above the line which the wholesaler has made. I should like to ask the Minister and the trade that where a net return system is used they should check the deductions made under it. I should also like to ask the Minister and the trade to note whether all the upward and downward trends in prices in the markets are reflected in the shops.

Thirdly, can anything be done about the weights and measures position, because, as the House knows, the Weights and Measures Acts do not apply to wholesalers' sales and we get a wide variation in packing and contents. Several of the Coventry retailers have written to me and quoted various examples. One says in 56 lb. of carrots he had 5 lb. of soil and another that in 112 lb. of potatoes he had 7 lb. One got a 40 lb. box of apples in which the apples weighed 35½ lb. I should like to ask what comeback a retailer has. Very little in the small market, because we all know that if any of them complain they get a raw deal, and I have been asked by retailers on no condition to mention their names, because of that position.

If the Parliamentary Secretary is going to say that a high degree of wastage is inevitable in this, obviously I accept it, but if that wastage is so high that it allows up to 700 per cent. between the money received by the grower and the money we pay in the shops, then obviously the system has to be changed. There is no doubt about that. If the wastage does not cover the 700 per cent., then I think we have to try to find out where that money goes. According to my figures nobody gets it, but one thing is certain, somebody must.

Mr. Crouch (Dorset, North)

I am sorry to interrupt the hon. Lady, but may I ask her what is the amount of carriage being charged on these vegetables, and does she take that into account?

Miss Burton

I have taken everything into account. There is this difference of 700 per cent. between the two extremes and I think it is too great. I am trying to find out where it goes. I think the House would agree it is too much. Every housewife, of every party and none knows that she pays an iniquitous price for vegetables in the shops. They should be brought down.

10.38 p.m.

The Parliamentary Secretary to the Ministry of Food (Mr. Frederick Willey)

I am sure we are obliged to the hon. Lady for raising this question, and we should congratulate her in getting up so early and going to Covent Garden Market. I think we have to recognise two things: first, that distribution of fruit and vegetables is haphazard and that it is extraordinarily difficult. It is affected by the weather, which is always an uncertain element.

Take the grower who, thanks to good weather, grows his lettuces early. The weather may change and he may not get the price he expected. The loss may not rest with him; it may also rest with the retailer. There may be a change in the weather while lettuces are being transferred to the retailer, resulting in no sale at all for salads. That sort of thing makes it a chancy and difficult trade.

Again, there is the question of quality. My hon. Friend mentioned cabbages, and said that one has to be sure they are the same cabbages. That is true. There are tremendous variations in the quality of fruit and vegetables. Perhaps I should add that our figures for cabbages do not accord with hers. Ours show an average of 3d. which compares favourably with the previously controlled price of 4½d., and generally speaking, vegetable prices compare favourably with previously controlled prices.

We are dealing with highly perishable commodities and there is a substantial element of waste; that is perhaps not unavoidably as great as it is now—but it is there all the same. There is an element of risk, and this is, as I have said, a very speculative and chancy business. But allowing for all that, and probably because of these factors, we have to do something to improve marketing arrangements for fresh fruit and vegetables. If we deal with the three parts of the chain of distribution, I think the growers have got to be more enterprising. I do not think it has been emphasised sufficiently tonight that the growers are, perhaps, more prejudiced than anyone in the chain of distribution.

Mr. Lennox-Boyd (Mid-Bedfordshire)

While the hon. Gentleman is saying that, may I ask whether, as an aid to making them more enterprising, he will get them non-returnable containers and an increase in the supply of all packaging materials?

Mr. Willey

We are doing all we can to aid growers, but I do not think that sufficient use is being made of the facilities available. The growers' co-operatives certainly have made some progress, but we have got to do better than we are doing. Apart from apples, we compare unfavourably with the Continental growers in most cases. If we have unsaleable produce reaching the market, and consequent waste, then the cost resulting will eventually be borne by the consumer. We should concert together to see that unsaleable produce does not go into the distribution chain. Moreover, the wholesale markets must be improved. Anyone going to Covent Garden Market is immediately impressed with the fact that the facilities for marketing are inadequate, and so we have perishable commodities held up by the physical difficulties of dealing with produce.

The wholesale markets, apart from Covent Garden, are too small, and Covent Garden was originally designed many, many years ago for local marketing. Now it is a national market but it has not, because of the greatly changed circumstances, the facilities or the appliances for dealing with modern traffic problems with the speed demanded for perishable commodities. It is out-of-date and ill-equipped. I think we have to concentrate, not so much on the profits which may be being made but rather on the unnecessary handling of the produce. These commodities are mainly dealt with on a commission basis. The fault lies not so much in the measure of profit taken by the wholesaler as in the number of people handling the goods in the wholesale stage.

As I am trying to deal with everyone concerned, I will refer for a moment to the retailers. Their margin does seem to have increased over recent years; and one cannot help but feel that there is perhaps a tendency—and this is understandable—in dealing with highly perishable commodities—to look for a high profit on a limited turnover rather than for them to go out for a progressive price policy—in other words, to go out for a greater turnover and be content with a lesser price.

Mr. Vane (Westmorland)

Would the hon. Gentleman deal with the point of the retailer who has two shops, one in the main street, and a humbler one just round the corner, showing great difference in prices?

Mr. Willey

Yes, but we should recognise that if we are to have competitive retailing, we should not be alarmed when we find that there are price differences. We want differences in retail prices. However, apart from that, if one looks at the retail field of fresh fruit and vegetable distribution, one does feel that there is a tendency to be content with a limited turnover rather than deliberately to increase the turnover which would help the growers in times of abundance.

What we want, therefore, is a simplification of our present arrangements, a pruning of the expenses of marketing and a better marketing intelligence. As my hon. Friend has suggested, one of the difficulties today in this trade is having reliable marketing intelligence. The very fact that we have not got adequate wholesale marketing facilities means that it is extraordinarily difficult to know what is happening about price changes. We should also set out to do what we can to bring the grower nearer the point of retail sale. In short, we should do what we can to provide a more efficient and speedy way of handling these highly perishable goods and so avoid waste in the process of distribution.

We are not thinking about this for the first time. It is a very difficult problem. We had the Linlithgow Committee Report in 1923, and we have had considerable research made over the last few years. The Government are giving their active and earnest attention and consideration to these problems, and my right hon. Friend has previously given the assurance that there will be discussion with all the sections of the trade affected before there is any question of implementing decisions on what is an extraordinarily complex and difficult problem.

Mr. Baker White (Canterbury)

Does not the Parliamentary Secretary agree that there is one factor in this problem to which no one has yet found a solution, and that is the day-to-day change in consumer demand, the lady who wants a cabbage on Monday, a lettuce on Tuesday and neither a cabbage nor a lettuce on Wednesday, with the result that retailers and the market are always taking a risk in being left with large quantities of unsaleable produce?

The Question having been proposed after Ten o'Clock, and the debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Twelve Minutes to Eleven o'clock.