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War Economy

Criticism of the Internal Marketing Division

Criticism of the Internal Marketing Division

The Internal Marketing Division had as its main wartime function the more equitable distribution of scarce wartime supplies. Because of the Government's stabilisation policy, it was denied the effective use of price adjustments to help to equate supply to demand. It had in many cases an unenviable task. Instead of being credited with improving the distribution of scarce goods, it tended to be blamed for the scarcities. Scarcities of goods such as eggs and vegetables affected all consumers. Complaints tended to be very vocal indeed. Traders saw in the extension of Government marketing activities a threat to their own livelihood and freedom, and in most cases lost no opportunity to criticise the actions of page 464 the Internal Marketing Division. The Opposition in Parliament, which saw the Division as an attack on private enterprise, criticised it at every turn and advocated its abolition.

Actually the policy of the Division was to disturb normal channels of distribution as little as possible. In most cases it operated through existing merchants, but, where improved standards were needed in handling and storage facilities or in accounting for profit margins, distributors were licensed.1 By the end of the war, the Division was supervising the distribution of butter and eggs by licensed distributors; it was sole importer of most tropical fruits and kumeras, which it distributed through merchants on a commission basis, and it performed the same function where needed to make good local shortages of lemons, maize, potatoes, onions, egg pulp, honey, barley and barley meal. For locally grown apples, pears and most lemons, it guaranteed to purchase the crop and acted as sole distributor through merchants. Small quantities of these fruits were sold direct by growers to consumers.2 The Division guaranteed a full market at reasonable prices for local production of eggs, maize, potatoes, onions and kauri gum. It also purchased and distributed molasses, some manures and agar seaweed, and was marketing adviser for a number of other commodities.

The Division could not hope to satisfy everyone. Nevertheless it did distribute scarce commodities as fairly as possible, and it reduced distributive costs at a time when the stabilisation policy required the paring down of all unnecessary components of cost. The magnitude of the task of distributing scarce supplies should not be underestimated. A more comprehensive view of the extent of overall shortages of goods is given in Chapter 12. The tools at the disposal of the Internal Marketing Division were in any case inadequate. Control of prices, for example, was in other hands. A comment by the wartime Director of the Division is revealing.3 He wrote:

‘Perhaps the main conclusion arrived at after ten years’ experience is this, that it is impossible to interfere in one field or small area of marketing without affecting every aspect of production, distribution and price. The whole of the marketing and production system is wrapped up altogether.’

page 465

After the war most of the functions of the Internal Marketing Division were progressively transferred to producer boards. In 1948 there ceased to be a separate division for internal marketing, and in 1953 the Marketing Department was abolished.

1 During World War I, when the Government thought meat prices were too high, it opened state shops in Auckland in 1917, which sold meat cheaply and forced the butchers to reduce their prices.

2 Even under strict marketing arrangements, small sales direct to consumers for their own use were legal.

3 P. R. Fraser in a personal footnote to War History narrative No. 60.