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Seed monopoly will push food prices up

The supply of seeds, insecticides and other horticultural requirements of orchardists, market gardeners and farmers has recently passed into the hands of a major Auckland company, Arthur Yates and Co Ltd.

That the horticultural industry is now controlled by this one company poses a threat to the consumer. The company's ability to regulate the prices of horticultural goods to food producers means it also indirectly regulates the price of food. As primary producers pass on costs to the consumer, this monopoly situation threatens the maintenance of stable food prices.

The firm recently finalised negotiations with two Wellington firms to give the Auckland company almost complete domination of the horticultural industry in New Zealand.

Arthur Yates has acquired all the share capital of F. Cooper Ltd, and also of Webbing and Stewart, both private companies with valuable expertise in the industry.

Cooper Ltd, once second largest to Yates has a complementary business in farm, vegetable and flower seed growing. Also significant is its interest in the supply of pet foods; insecticides, and sprays. Now this company will have prices and policies dictated to it by Yates.

Webbing and Stewart is of value to Yates as a major supplier of vegetable seed to market gardens. The phenomenon of one company controlling supply, marketing and distribution is seen with this purchase by Yates.

By taking over these two companies Yates will now control 95 per cent of the commercial and retail packet seed market in New Zealand. Watch out farmers, market-gardeners and home garden enthusiasts!

This is more significant than it might seem for the costs of fruit, vegetables and grain will now be indirectly governed by the Yates organisation. Any monopoly situation is a serious matter for the ability of the company to manipulate output and price is ever present. But the control of output and price of primary products is a more serious matter still.

The total horticultural industry in New Zealand is worth about 30 million dollars a year in direct value. Of this, all but five per cent now passes into the hands of the Yates organisation. The two remaining competitors are so small as to be insignificant. They will not be able to compete with the large company and so will not act as a check to Yate's profit margin.

The Government has failed in its duty here. It has not sought to safeguard the consumer's interest by maintaining a measure of competition which would go some way towards keeping food prices down in the long term. Labour has proclaimed itself a firm opponent of the instigators of food price rises and of monopoly business arrangements where price manipulations can occur. The Government makes much noise about its proposed Anti-monopoly Bill, but would not act when it had the chance before the takeover occurred.

Arthur Yates gives as the reason for this double takeover the ability of the enlarged group to bring greatly increased resources to the horticultural industry. Yet this also signifies a desire for increased power so evident in the business machinations of major firms. The same result could have been achieved by a cooperative effort of the three companies.

If the industry so closely associated with primary production, with the production of our food, was not in the hands of one organisation the consumer might be less threatened by possible manipulation of prices affecting the cost of food.

—Brendan Smith