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Thursday, 8 March 1928

Senator OGDEN (Tasmania) .- As honorable senators are aware glucose is a product of maize which is largely used in the manufacture of the higher classes of confectionery. It is not used because it is cheaper than sugar, but because in the manufacture of confectionery it is superior in many respects to that commodity. Glucose costs, I think, £40 a ton, while sugar costs about £36 10s. a ton: There are a large number of confectionery businesses in Australia in which large quantities of glucose, which previously came principally from America, are used. Under the old tariff, a. duty of 12s. per cwt. was imposed and no preference was given to Great Britain. The present proposal is to increase the general and intermediate tariffs by 3s. per cwt. and to leave Britain with a preference of 3s. over her rivals. I think I can show that there is a danger of serious injury to certain industries if the present proposal is carried, and as honorable senators have said they are open to correction and ready to remove any anomaly, I believe they will support the request I intend to submit. The Australian supply of glucose is controlled by Maize Products Proprietary Limited, which is controlled by one of the largest confectionery firms in Melbourne. At the end of 1925 this company applied for an increased duty of 6s. per cwt. on glucose, and urged as its reason that it wanted to prevent the importation of glucose, rather than to raise the price of the commodity to its competitors. At the time it made the request, 92' per cent, of the glucose trade was under its control, and it had only to prevent 8 per cent, of the quantity consumed from coming to Australia to obtain a complete monopoly. Immediately an increase of 3s. per cwt. was imposed, this firm increased the price by the amount of the additional duty, with the result that numerous confectionery businesses throughout the Commonwealth had to pay an increased fate whilst one very large firm in Melbourne which has the monopoly of the local supply, even though it had to pay a higher price for the glucose used in the manufacture of its own confectionery, was able to recompense itself from the profits of the glucose business. This is a serious position and leaves the competing firms entirely in its hands. It has the power to raise the price of the product, and is, therefore, making the position more difficult for its competitors. That is according to the evidence given. before the Tariff Board.

Senator Reid - Is Maize Products Proprietary Limited the .only firm in Australia manufacturing that commodity?

Senator OGDEN - Yes.

Senator Guthrie - But others can undertake its manufacture.

Senator OGDEN - Yes; but what is the use when this company, which is controlled by MacRobertson's Limited, has control of the Australian market? What is the use of duplicating an industry which at present is able to supply practically all that is required. The competitors of MacRobertson's Limited are placed in an unenviable position because it can increase the price of the product and recompense itself from the profit made by Maize .Products Limited, which it controls. Other confectionery manufacturers have to pay the increased price which they must add to the price of their product.

Mr GREENE (NEW SOUTH WALES) - Has Maize Products Proprietary Limited made any profit. on glucose ?

Senator OGDEN - I do not know. Confectionery manufacturers also complain because the company will quote only for 90 days' forward delivery, whilst American firms will quote for delivery twelve months ahead. In these circumstances I ask the committee to consider whether we are doing right in placing the power in the hands of a wealthy corporation to charge higher prices to its competitors.

Senator Reid - Does it charge more than a reasonable price?

Senator OGDEN - It has power to charge what it likes within limits which are governed by overseas competition, and then recompense itself from the profits made by Maize Products Proprietary Limited.

Senator Guthrie - Why have not its competitors the same opportunities?

Senator OGDEN - Because they are depending solely upon their confectionery businesses, whilst the firm of confectioners which I have mentioned, controls Maize Products Proprietary Limited, from which it may make profits. I stress the point that when the higher duty was sought the company had control of 92 per cent, of the Australian trade. Apparently it asked for a higher duty so that it could increase the price.

Senator Reid - Are its prices too high ?

Senator OGDEN - I am not disputing the price; but saying that there is no necessity for a higher duty when it controls practically the whole of the trade.

Senator Guthrie - Why should we not use our own products ?

Senator OGDEN - Why impose an extra duty? The company had the trade when it asked for an increased duty, and when it was granted increased the price, which, some ardent protectionists say, is never done under a protectionist policy.

Senator Kingsmill - Those promises are made but are not always kept.

Senator OGDEN - Exactly. In order to test the feeling of the Committee, I move -

That the House of Representatives Vie requested to make the duties, British, 9s; intermediate. 123; general 12s.

That would bring the intermediate and general rates back to those previously in operation, but would give Britain a preference of 3s. per cwt.

Senator Crawford - The previous rates were, British, intermediate and general, 12s. per cwt.

Senator OGDEN - I propose to provide for a preference to Great Britain of 3s. per cwt. by making the intermediate and general tariffs 12s. and the British preferential 9s. per cwt. Obviously the industry does not need protection. I know that Cadbury, Pry and Pascall object very strongly to the high rate which they consider gives a very unfair advantage to one of their competitors.

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