“DENIES BIG FOUR SET MILK PRICES OF MONTREALERS,” Toronto Star. March 16, 1933. Page 1 & 2.
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Dairies Operate on "Purely Competitive Basis," Says George Hogg
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PROFIT IN CHARITY
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Chain Stores Threatened to Start Opposition If Not Given Price Cut
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Ottawa, March 16. - Montreal chain. stores had threatened to begin their own dairies unless the existing firms sold the milk at seven cents a quart, George Hogg, president of the Guaranteed Milk Co., told the parliamentary agricultural committee investigating milk prices to-day.
"At first we told them we could not afford to do this," he said. "It would hit our own delivery business. They said then they would start their own plants. Finally we agreed to sell them milk at seven cents which they could sell at eight cents. At the same time we dropped our price of delivered milk to nine cents a quart."
Mr. Hogg "denied most decidedly" that four major Montreal dairies fixed the price paid by consumers and that paid to farmers. "It is on a basis of pure competition," he asserted.
Can't Control Supply
His company gave a premium of three cents a hundred pounds above the basic figure of 3.5 butter fat, he said. In 1932 the average milk bought had a butter fat content of 3.7, which meant to the farmers an average of six cents a hundredweight above the basic figure.
Two prices were current in the Montreal area, said Mr. Hogg. One was determined by the dairy association in conference with the producers, and the second was a "surplus" price. In 1932, 11.9 per cent. of all milk purchased by his company was bought at a surplus price.
"It is not possible for anyone in the dairy industry to maintain a control or regulate supply," said Mr. Hogg. "The fluctuation of supply often creates a situation whereby a producer will be shipping us three times as much milk during the abundant season as he can during the off-season."
Quite often conditions brought about an oversupply, continued Mr. Hogg. "We refer to surplus milk as that milk not sold through any regular avenues of sale but used as sweet cream or used in the manufacture of butter. All milk classed by us as surplus is used in this manner and none ever sold through regular profit-producing channels."
Turning to prices to consumers, Mr. Hogg emphasized nine cents a quart, paid by the householder, was not the price at which all milk was sold. Minimum prices were charged hospitals and schools while less than maximum prices to restaurants, re- tail stores, manufacturers and dealers.
All Tied in Same Bundle
William E. Tummon (Cons., Hastings S.) asked if the Montreal dairies had a combination to set prices before meeting the producers.
"We are all tied up in the same. bundle and, if a demand is made on us, we certainly compare notes," said Mr. Hogg, adding, "The producers do the same."
Average price to the association in Montreal during 1932 was $1.46 a hundred pounds f.o.b. Montreal, Mr. Hogg said, with about. 38.3 quarts to the hundred pounds. That worked out at about 3.65 cents a quart. The average spread between the price per quart paid the producer and the price per quart paid by the consumer, was 4.339 cents per quart in 1932, Mr. Hogg added.
Prices varied to the different classes of consumer, Mr. Hogg said, from the individual customer to the large hospitals. "I am not an accountant," he said, when pressed for detailed figures. "I was just a clay-footed farmer when I started, and I have waded up through the years."
In 1932, the purchase price of milk had been 43.1 of its selling price, Mr. Hogg stated. In 1933, due to lessened delivery costs and lower prices, the purchase price was 51.1 of the selling price.
