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Thursday, 27 April 1972
Page: 2079

Mr HURFORD (Adelaide) - There is a crisis in the coal industry and the honourable member for Hughes (Mr Les Johnson) and the honourable member for Cunningham (Mr Connor) have clearly shown this. In spite of a lot of nonsense spoken by the honourable member for Macarthur (Mr Jeff Bate) who tried to shift the blame to the former Labor government in New South Wales, I am glad that he ended on the note that there is a great need for a national fuels policy in this country, a need which the Australian Labor Party Opposition has been advocating for years. However, my grievance today is not about coal. But purely and simply, it is that the price of a schooner of beer is far too high in this country and that this McMahon Liberal-Country Party Government is directly to blame for this iniquitous state of affairs. I make this claim not so much from the experience of personal consumption - I prefer the product of the grape on suitable occasions, in reasonable quantities, of course - but after a cold, hard, analytical look at the figures as a cheerless accountant and economist.

Let me give the House a few stark facts about the brewing industry. Firstly, profits of the 8 major brewers in 1971 totalled $33,370,201 after tax- nearly $33im after they had paid their company tax. I know that the total amount of profit is not always in itself meaningful for it depends on how much capital one has to employ in order to arrive at that profit. Let us look now at a second stark fact - the total profit before tax and interest payments as a ratio of total capital employed. For the brewing industry this figure in 1964-65 was 15.2 per cent. It was 15.6 per cent in 1965-66 and rose to 20.8 per cent in 1970-71. This is a usurious rate of return. Shylock had nothing on these giant breweries in our midst which are taking advantage of the ordinary working man's love of a schooner, a middy or even a pint of beer. The rate of return was bad enough in 1964-65 when it was 15.2 per cent, but to add insult to injury there has been a rapidly increasing rate of profitability until now the last known figure is 20.8 per cent. I remind the House that this 20.8 per cent was earned last financial year, the year to 30th June 1971, the year when this McMahon Liberal-Country Party Government commenced its so-called attack on inflation.

The main form of attack has been to bash the unions. The Government says: 'Let us by a dose of unemployment discourage them from applying through the arbitration court and by other means for their just rewards'. This is the Government's attitude. While it pursues these policies the Prime Minister (Mr McMahon), the Treasurer (Mr Snedden), the Minister for Labour and National Service (Mr Lynch) and the

Minister for Trade and Industry (Mr Anthony) who is Deputy Prime Minister - the Australian Country Party is also guilty - and all the other guilty men in this Government allow their friends who run the breweries and the hotel combines to fleece the public in this way and to add immeasurably to inflation. Why do they allow this? They allow it because the breweries exemplify the sort of places from which the Liberal and Country Parties derive their funds to fight elections. The breweries are big donors to Party funds. I go one step further. In my city, Adelaide, the South Australian Brewing Co. Ltd which distributes beer throughout South Australia, the Northern Territory and Broken Hill under the brand names of 'West End' and 'Southwark' - this company produces all the draught beer and most of the bottled beer sold in South Australia and operates the largest hotel chain in my State so that it is a thriving quasi monopoly if ever there was one - is a thriving hive of Liberal activists with at least one and possibly 2 endorsed Liberal candidates on its staff, a couple more who are budding conservative politicians and also one who is one of the main contacts of the League of Rights in South Australia. Is it any wonder that we do not get any action from this Government to ensure that the beer drinkers of this country cease being fleeced?

Before I turn to the remedies I will give the House a third lot of facts about this brewing industry to drive home my case. I have had calculated for me an earnings per share index which should be more or less proportional to the return received by investors, though perhaps understating the return as it would discount bonuses and option issues. This earnings per share index, starting at 100 in 1964-65, shows a phenomenal growth in these earnings. In 1965-66 it rose to 108.9 and in 1966-67 to 114.1 until in 1970-71 it was 167.4. In the years from 1964-65 to 1970-71 the earnings grew from 100 to 167.4. To take a more concrete case, the purchase of 100 Carlton and United Breweries Ltd shares at the highest price in 1965 would have cost $318. Dividends received on these shares would have totalled $98.80, including dividends on bonus issues. The bonus and premium issues since 1965 would have netted an extra 40 shares at a cost of $20. Sale of these shares on 11th February 1972 would have returned $610.40. Profits over the 7-year period would have been $371.20 or $53 a year, nearly 17 per cent annual return on the investment. If the shares bad been bought at the lowest price for 1965 the outlay would have been $238, the profit $450 or $64 a year, representing an annual return of nearly 24 per cent. This is the return for investors, and yet it is the unions and wage earners who are being bashed by this Government and told that they are responsible for inflation.

What would a Labor Government do about this iniquitous state of affairs? First of all, we will create a situation in which, by adequate monopolies and restrictive trade practices legislation, the country will not be held to ransom by a few suppliers, as is the case in Australia today. Let us have a monopolies commission to examine this industry just as the industry has been examined in the United Kingdom. The trouble with us in this country is that we form these committees and derive for ourselves the powers to do something about the ills that inflict our society, whether it is to do with foreign investment, operations on the stock exchanges or take-overs, and learn what we should do about these ills only after the horse has bolted and after the damage has been done. Would anyone deny that what the British Monopolies Commission turned up as the ills of Britain's liquor industry do not apply here? Let me tell the House some of the headings of the Commission's report. Firstly, there is the concentration of the industry in the hands of just a few. There is, of course, ample evidence of that in Australia. Secondly, there is the horizontal integration, as it is called - the degree of control exercised by brewers through their tied houses, on the one hand, and their roles as wine and spirit distributors, on the other. There is evidence that breweries promote their own house brands in their controlled outlets at the expense of . independently distributed wines and spirits. There is evidence that Australian breweries employ even more vigorous methods to discourage competition against their wine and spirit distributing subsidiaries by independent wholesalers. A third finding of the United Kingdom Monopolies Commission related to the lack of competition. As we know, price competition is virtually unknown in

Australia, especially in the draught beer market. In 3 States the supply of draught beer is a monopoly. In all cases it is claimed by the Australian Hotels Association that recommended prices are set by it and almost universally followed by its members.

So much for the advantages of having monopolies and restrictive trade practices legislation with teeth in it, brief though the account has been. A second benefit that an Australian Labor Party government will give the people in this field is a prices justification tribunal. With profits of the order I have outlined earlier in this speech, does anyone really think that. the price of a schooner of beer could be justified before our tribunal?

A third benefit which I think, is overdue is some civil liberties for the home brewer. There are plenty of rumours flying about that the big breweries are stockpiling large quantities of hops in order to undermine the rapidly expanding home brewing, industry. This is only one of the ways in which the home brewer is being frustrated. I do not believe that he has the right to start up an industry in his back yard, but I do believe that he has the right to brew a reasonable quantity for his own family's consumption. The man in the street is paying far too much for his glass of beer. An active Labor Government will see that he is no longer fleeced in this sphere, as he is in so many others.

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