§ [The question was as follows:
§ To ask His Majesty's Government whether they have taken note of the statement which has received wide currency that the cost of distribution of the food consumed in this country in a pre-war year was £850,000,000— namely, the difference between the estimated prime cost at the port or the farms, £650,000,000, and the cost to the consumer, £1,500,000,000; and whether any similar estimates can be given on a comparable basis for a later period.]
§ THE MINISTER OF FOOD (LORD WOOLTON)
My Lords, I am glad to have the opportunity of clearing up the misconception which appears to exist in regard to figures which have been quoted by the noble Lord. Those figures include all forms of drink as well as food. The sum of £850,000,000 in a pre-war year to which my noble friend refers does not represent solely costs of distribution, but includes other important items in the make-up of the final prices to consumers. In particular it covers the entire cost of processing, manufacturing and otherwise preparing for sale, whether for consumption in the home or in catering establishments, and the entire amount— roughly £150,000,000—of Customs and Excise duties on food and drink. If allowance could be made for these items, the cost of distribution proper would be far less than the figure quoted, and the resultant margin would cover all costs within this country of transportation and delivery of primary foodstuffs and finished products, as well as overhead expenses—rent, salaries, wages, etc.— and profits of trading, besides such ancillary items as storage, deterioration, wastage, breaking bulk and packing. The Ministry of Food has attempted to estimate for 1942 the cost of distributing finished foodstuffs to the civilian population, but I would emphasize that no comparison is warranted between those estimates and those to which the noble Lord has referred. The estimates of my Department cover all foodstuffs except chocolate and sugar confectionery, while alcoholic beverages and mineral waters are also excluded.
977 The retail cost to the consumer of the commodities covered by the inquiry is estimated not to exceed £1,350,000,000, whereas the value at which they entered the chain of distribution in their finished state is calculated at rather more than £900,000,000. Thus, the costs of distribution of food ready for sale to the consumer are unlikely to have greatly exceeded £400,000,000. By far the greater part of this total would be attributable to retail distribution. In view of the valuable services which food traders, both large and small, are rendering in maintaining the distribution of essential supplies under very difficult conditions, during these war years, I am glad to have been afforded the opportunity of explaining figures which have been given wide circulation and I think have not been generally understood. Perhaps I may be allowed to add one general and obvious comment. The costs of distribution must be greatly affected by the standard of distributive service demanded by the public.