Title Wheat, Flour and Bread Industries - Royal Commission - Third Report
Source Both Chambers
Date 01-04-1936
Parliament No. 14
Tabled in House of Reps 01-04-1936
Tabled in Senate 23-04-1936
Parliamentary Paper Year 1936
Parliamentary Paper No. 233
System Id publications/tabledpapers/HPP052016004934


Wheat, Flour and Bread Industries - Royal Commission - Third Report

1934-35-36.

THE PARLIAMENT OF THE COMMON·WEALTH OF AUSTRALIA.

ROYAL COMMISSION

ON THE

WHEAT, FLOUR AND BREAD INDUSTRIES.

THIRD REPORT.

Presented by Command; ordered to be printed, 1st April, 1936.

[Cost o/_Paper.- Preparation, not given ; 89G copies; approximate cost of printing and publishing, £230.]

P rinted and Publi shed for t h e GoVEitNii'!.EN 'l' ilf t h e of A u sTRALIA by

L. F. JOH NSTON, Co mmonwealth Government Printer, Canberra.

No. 233.-F.403.-PRICE 8s. 4n.

COMMONWEALTH OF AUSTRALIA.

GEORGE THE FIFTH, by the Grace of God of Great Britain, Ireland and the British Dominions beyond the Seas King, Defender of the Faith, Emperor of India.

To Our Trusty and Well-beloved :

GREETING:

SIR HERBERT WILLIAM GEPP, Knight, Consultant on Development to the Commonwealth Government; THOMAS STANLEY CHEADLE, Esquire, Pastoral Company Director;

CHARLES WALTER HARPER, Esquire, Company Director;

EDWARD PATRICK MICHAEL SHEEDY, Esquire, Fellow of the Institute of Chartered Accountants (Australia), Fellow of the Society of Accountants and Auditors (England) ; and PROFESSOR SAMUEL MACMAHON WAD HAM, M.A., Professor of Agriculture, University of Melbourne.

\

-:\.T HEREAS by the Constitution of Our Commonwealth of Australia it is provided (inter alia) that the of Our _said ll' Commonwealth may make laws for the peace, order and good government of Our said Commonwealth with respect to taxatiOn : AND WHEREAS by the Constitution of Our said Commonwealth the Parliament of Our said Commonwealth has exclusive power to make laws for the peace, order and good government of Our said Commonwealth with respect to bounties on the production or export of goods:

AND WHEREAS questions have arisen with respect to the payment of bounties for the assistance of wheat-growers and with respect to the effect of taxation under the laws of Our said Commonwealth upon the industries of growing, handling and marketing wheat, manufacturing flour and other commodities from wheat and manufacturing, distributing and selling bread:

NOW THEREFORE WE do by these Our Letters Patent, issued in Our name by Our Governor-General in and over Our Commonwealth of Australia, acting with the advice of Our Federal Executive Council, and in pursuance of the Constitution of Our said Commonwealth, the Royal Commissions Act 1902-1933, and all other powers him thereunto enabling, appoint you to be Commissioners to .constitute a Commission to inquire into and report upon the economic position of the industries of growing, handling and marketing wheat, manufacturing flour and other commodities from wheat, and manufacturing, distributing and selling bread:

• AND WE APPOINT YOU the said SIR HERBERT WILLIAM GEPP to be the €:hairman of Our said Commission: AND WE DIRECT that, any one or each of you Our said Commissioners, together with any other one of you Our said Commissioners-( a) may, if so directed in writing by the Chairman of Our said Commission after consultation between all of you Our said

Commissioners, inquire into and take evidence upon any matter entrusted to you Our said Commissioners by these Our Letters Patent-(i) either as to the whole or any part of that matter; or (ii) in respect of any State or part of the Commonwealth, as specified in the said direction; (b) shall, for all purposes relating to the taking of evidence in pursuance of any such direction, constitute a quorum; and

that the Chairman of Our said Commission may, if and when he thinks proper, sit with and take part in the proceedings of any two of you Our said Commissioners, when taking evidence in pursuance of any such direction;

Provided that all of you Our said Commissioners shall report upon each matter entrusted to you by these Our Letters Patent;

AND WE REQUIRE YOU with as little delay as possible to report to Our Governor-General in and over Our said Commonwealth the result of your inquiries into the matters entrusted to you by these Our Letters Patent :

IN TESTIMONY WHEREOF WE have caused these Our Letters to be made patent and the Seal of Our said Commonwealth to be thereunto affixed. -

WITNESS Our Right Trusty and Well-beloved Counsellor, Sm IsAAC ALFRED I s AACS, Knight Grand Cross of Our Most Distinguished Order of Saint Michael and Saint George, Governor-General and Commander-in-Chief in and over Our Commonwealth of Australia, this Twenty-fifth day of January in the year of Our Lord One thousand nine hundred and thirty-four, and in the twenty-fourth year of Our Reign.

By His Excellency's Command, J. A. LYONS, Prime Minister.

ISAAC A. ISAACS, Governor-General.

Entered on record by me, in Register of Patents, No. 60, page 136, this twenty-fifth day of January, One thousand nine hundred and thirty-four. F. STRAHAN.

PREFACE

SECTION

TABLE OF CONTENTS .

. THE ECONOMIC POSITION OF THE BREAD BAKING INDUSTRY. I.-PROGRESS OF BAKING AS A CRAFT AND ITS ECONOMIC IMPLICATIONS

(a) Introductory

(b) Improvements in the basic materials of baking

(c) The mechanical equipment of bakeries (d) Baking ovens (e) General observations ..

P£GE.

5

9

9

9

11 12 15

SECTION II.-THE STATISTICAL DATA REGARDING NUMBER ·oF BAKERIES AND EMPLOYMENT IN THE INDUSTRY IN RECENT YEARS 19

SECTION JII.-LABOUR AS A FACTOR IN THE BAKING INDUSTRY 29

(a) The history of the regulation of labour in the Industry 29

(b) The present position of labour regulation in the Industry as regards-(i) Hours of work of bakehouse operatives 31

(ii) Hours of work of breadcarters 33

(iii) Wage rates for bakehouse operatives and breadcarters 34

(iv) Apprentices and improvers 36

(c) Conclusions . . 36

SECTION JV.-THE REGULATION OF THE BREAD INDUSTRY IN RESPECT TO MATTERS OF HYGIENE-

SECTION

(a) The nature and scope of the legislative regulations · 41

(b) The extent to which the regulations are observed 41

(c) Dough mixing 42

(d) Wrapping 42

(e) Delivery 42

(f) Shop Sales 42

(g) Conclusions

V.-COSTS OF PRODUCTION, DISTRIBUTION, AND ADMINISTRATION, CAPITALIZATION, AND THE FINANCIAL RETURN FROM THE INDUSTRY-(a} Procedure adopted in making the investigations

(b) Costs of production, distribution and administmtion­

(i) Pr?cedure adopted in analysing costs (ii) The number of loaves produced from one ton of flour (iii) The price of flour as a factor in bakers' costs (iv) The average cost of the 2-lb. loaf in the metropolitan areas of the mainland

States, and in the State of Tasmania (v) The average cost of the 2-lb. loaf in country districts of Australia (c) Capitalization of the bread-baking industry (d) The financial return from the Industry-

(i) The prices actually received for the 2-lb. loaf (ii) The margin of profit per 2-lb. loaf in the metropolitan areas and in Tasmania (iii) The margin of profit per 2-lb. loaf in the rural areas of mainland States

(iv) A survey of profit and loss accounts of certain bakeries during the years, 1931, 1932 and 1933 (e) Summary of the financial position of the Industry

43

46

48 50 54

58 70 73

79 87 92

94 97

8EOTION VJ.-FACTORS GOVERNING THE ECONOMIC STABILITY OF' THE INDUSTRY.. 101

(a) The position of the industry as described by those engaged in it 101

(b) ComJ;>etition within the Industry 101

(c) Price-cutting in ita relation to profit margin in the bread-baking trade 102

(d) Methods by which the legal enactments governing employment are avoided or infringed Ill (e) Shop Sales and special price-cutting methods 112

{j) General consideration of the problem of deliveries 113

TABLE OF CoNTENTs-continued.

PAGE.

SECTION VJl.-REACTIONS OF THE INDUSTRY TO COMPETITION 127

(a) Protective trade organizations . . 127

(b) Fixation of minimum prices 128

(c) Methods of fighting or controlling competition 129

SECTION VJII.-0THER FACTORS OF IMPORTANCE TO THE INDUSTRY-(a) The course of prices of flour, bread, and wages in each State 135

(b) Consumption of bread 136

(c) The quality of Australian bread. . 138

(d) Relationship to sidelines 145

(e) The problem of scientific and technical education within the Industry 146

SECTION JX.-THE RESULTS OF INQUIRIES OVERSEAS . . 153

SUMMARY .AND FINDINGS 155

GENERAL CONSIDERATIONS LEADING UP TO RECOMMENDATIONS 160

RECOMMENDATIONS 162

SCHEDULE A.-SPECIFICATIONS OF BAKERY PREMISES . . 165

APPENDIX A.-Regulation of labour conditions of bakers and breadcarters in New South Wales under Industrial Arbitration Laws (by Mr. C. J. Bellemore, Under-Secretary of the Department of Labour and Industry in New South Wales) 167

APPENDIX B.-Overtime rates for bakers and breadcarters 177

APPENDIX C.-Summary of State Regulations governing bakers' apprentices and improvers 180

APPENDIX D.-Questionnaire issued to bakers 182

APPENDIX E.-Some observations on gluten, maltose, diastase, and strength in wheat and flour by L. W. Samuel, Ph.D. (London) 188

APPENDIX F.l.-Royal Commission of Food Prices 1925 189

APPENDIX F.2.-Canadian investigation under Combines Act 192

APPENDIX F.3.-Canadian Royal Commission on Price Spreads, 1935 195

ROYAL COMMISSION ON THE WHEAT, FLOUR AND BREAD INDUSTRIES.

TI-IIRD REPORT.

To His Excellency Brigadier-General the Right Honourable Lord Gowrie, V.C., G.C.M.G., O.B., D.S.O., Governor-General and Commander-in-Chief in and over the Commonwealth of Australia. ·

MAY IT PLEASE YOUR EXCELLENCY :

This Commission has already submitted Reports upon the economic position of the industries of growing, handling and marketing wheat. Upon the completion of its inquiries into the industries named above, the Commission proceeded to inquire into the economic position of the industries of manufacturing flour and other commodities from wheat, and manufacturing,

distributing and selling bread. In the course of its investigations in regard to flour the Commission has necessarily had to consider matters which relate entirely to trade and conrmerce within a State and also matters of trade and commerce with other countries and among the States.

In relation to the bread industries, however, matters in relation to trade and conrmerce with other countries and among the did not arise. In the fulfilment of the directions to it under the Letters Patent issued on the twenty­ fifth day of January, 1934, and in order that its recommendations may be as helpful as possible to the States, the Commission has necessarily had to consider the legislation enacted by the legislatures of the several States, the judicial det erminations of State Courts and the

administrative acts of State Departments and Instrumentalities. The Commission now presents to Your Excellency this Third Report which deals with the economic position of the industries of manufacturing, distributing and selling bread. The Report embraces the following matters, namely:-

(i) The progress of baking as a rraft and its economic implications. (iii) The statistical data regarding the number of bakeries and employment In the industry in recent years. (iii) Labour as a factor in the baking industry . (iv) The regulation of the bread industry in respect t o matters of hygiene.

(v) Costs of production, distribution and administration, capitalisation, and the • financial return from the industry. (vi) Factors governing the economic stability of the industry. (vii) Reactions of the industry to competition. (viii) Other factors of importance to the industry.

(ix) The results of inquiries overseas.

THE BAKING INDUSTRY.

SECTION I.-THE PROGRESS OF BAKING AS A CRAFT AND ITS ECONOMIC IMPLICATIONS.

(a) I N TRODUCTORY

(b) IMPROVEMENTS IN THE BASIC MATERIALS OF BAKING

(c) THE MECHANICAL EQUI PMENT OF BAKERIES

(d) BAKI NG OVEN S

(e) G E NERAL OBSE RVATIONS

9

9

11

12

15

2 9

I.-THE PROGRESS OF BAKING AS A CRAFT AND ITS ECONOMIC IMPLICATIONS. (a) INTRODUCTORY. 1. The origin of the custom of making bread-like materials is lost in antiquity but, doubtless, in early times the work was carried out in the individual household. It is reasonable to assume that the results were not invariably uniform or satisfactory; consequently, there was room for the early development of a craft of baking. This position had certainly been reached in Roman times, for the written record shows that the trade in bread was subject to certain regulations in order to avoid exploitation of the consumers. There were no very great innovations in the

process until the latter half of the eighteenth century; but from that time onward, a large number of changes occurred in the material used, in the plant and equipment available for the baker's use, and in the regulations controlling the operations of the trade. Each of these innovations exercised some modifying influence upon the economic position of the industry.

2. To-day, in the larger Australian cities there are examples of baking establishments which are representative of many of the stages in the evolution of the industry. In a sense, each type of bakery is in competition with each other type and it becomes necessary to consider the salient features of each baking system to obtain a true picture of the economic position of the industry. The regulations controlling the trade, and the workers engaged in it, are important

because they affect the different methods of baking in different ways and to different extents. 3. A brief description of the processes which constitute bread-making is a necessary starting point for a clear understanding of the problems of the industry. The initial process consists of mixing the requisite quantities of flour, water, yeast, salt and, in some cases, certain other materials such as "improvers" and dried milk, and allowing the resultant dough mixture to stand for a determined number of hours whilst the yeast, acting upon the sugary constituents

of the flour, sets up a mild fermentation. This fe rn1entation produces carbon dioxide gas, which, being more or less evenly distributed, results in a "leavening" of the dough. At the same time, changes in the physical nature of the starch and gluten of the flour occur. After the dough has thus " worked " for a suitable period it is divided into pieces of a size necessary to produce

the required loaf. Each piece is then " kneaded " in order to ensu:r;e uniformity of composition · and then held for a period under appropriate conditions of moisture and temperature during which further fermentation takes place; this process is known as "proving". When the "proving" period is finished the dough is again ,kneaded, shaped and "proved", and when the right stage of "proving" has been reached the dough is baked. After baking is completed the loaves are put on racks to cool prior to distribution.

4. The increase in scientific and technical knowledge has affected the art of baking in three major directions, viz., in the characteristics of the raw materials such as flour and yeast, secondly, in the degree of control over the various processes, and, thirdly, by a more or less complete mechanization of the operations. Changes in the basic commodities are of some economic

importance because they have, to a certain extent, diminished the amount of technical skill necessary. Changes in the direction of mechanization have been profound, for, whereas in the early days every one of the operations described in the preceding paragraph was carried out by hand, to-day it is possible to install a plant into which the raw materials can be fed at one end

and the baked bread wrapped for delivery received from the other. Between the manual and the completely mechanized system, a wide range of intermediate methods is available. 5. Further, as the baker usually delivers the bread and the costs of such delivery are a relatively large fraction of his total cost, the introduction of motor transport has had some effect

on the economics of each individual business. ·

(b) IMPROVEMENTS IN THE BASIC MATERIALS OF BAKING. 6. Flours produced from different types of wheat possess different bread-making qualities. These differences are partly inherent in the botanical variety of the wheat and partly due to the climatic and soil conditions under which the wheat is grown. Therefore, millers must blend their wheats for gristing in order to maintain a regular standard of flour quality suitable and

satisfactory to the baker. For instance, Tasmanian wheat whilst comparatively unsuitable for bread-making produces a high-grade biscuit flour. Therefore, most of the Tasmanian flour is exported to the mainland, and the requirements of Tasmanian bakers are by the importation of flour and wheat from the mainland States. The purchase of h1gh-grade gluten

wheat by millers at a premium over the f.a.q. price is extending throughout the Commonwealth. 7. The baker looks for certain qualities in the flour which he uses for making bread. He expects it to be free from taints, "ropiness" and from insects. (" Ropiness " is a physical condjtion which sometimes develops in flour owing to infection by certain bacteria.) He expects

uniformity of texture and colour and of moisture content. He requires it to "work" effectively

10

when mixed into dough. (Technically, this means that the flour must contain sufficient diastase to produce enough sugar to provide the yeast with sufficient food to produce an adequate amount of gas during the fermentation.) The flour must impart certain characteristics to the dough during bal.-ring. These characteristics are of a complicated nature and are associated with the quantity and quality of the protein in the flour. The baker is anxious that the dough during baking shall "rise" into a loaf of large size and uniform te;xture, with a nice crust, and this result is largely dependent upon the protein in the flour. The flours gristed from strong · wheats produce a loaf which is both large in volume and sturdy in shape, while those from

"weak" wheats tend to produce relatively flat, unattractive-looking loaves of relatively small volume. Some flours absorb more water during the dough-making process than others, with the result that the number of loaves produced per sack of flour is relatively larger. A specially high-grade flour as used for blending purposes may be expected to give between 112 and 115 2-lb. loaves per 150 lb. of flour whilst the present average Australian flour produces approximately 102 loaves frorn the same quantity. The economic significance of this point is discussed later in paragraphs 169 to 189.

8. During the last hal£ century, the bread-making industry has seen a great change in respect to yeast. In the early days, the yeast required for bread-making was made by boiling up hops with smne sugary or starchy material. The hops usually introduced various strains of yeast species and the conditions under which the infusion was made nat-qrally favoured the rapid multiplication of those particular strains which were capable of doing the kind of work which the yeast necessary for bread-making had to perform. When once a yeast of a satisfactory type had been obtained it was grown in vessels containing various mixtures, the basis of which was usually boiled potatoes and water. Prolonged boiling had rendered this nutrient material reasonably sterile so that on the addition of the yeast decoction the particular strain multiplied rapidly. The vessels in which this operation was carried out were kept in a warm place, so that the yeast might grow effectively, and were covered in order to prevent the access of dust and foreign organisms. This "spontaneous" yeast is still used in many bakeries. Its _successful cultivation and the maintenance of a regular standard requires considerable care and judgment. As long as this was the only method by which bakers could obtain their yeast, the baker who ·knew his trade and understood the proper management of a yeast culture had a definite advantage

over the uninitiated newcomer. The production of yeast in quantities sufficient for commercial bakehouse purposes is not easy and if care is not taken considerable losses of bread may occur. 9. During the last half century, considerable scientific investigation has been devoted to the study of the yeast plant. These investigations have shown that there are various strains

within each species of yeast and that some of them are much more suitable and effective than others. The merit of a scheme whereby a standardized yeast could be obtained and sold to bakers was considerable. Accordingly, companies or firms started to supply a yeast which is standard in its operations and which, when used under a given set of conditions, will produce a regular and dependable result. The baker has no longer either the trouble of preparing his yeast or the anxiety as to whether it will retain its character. He is no longer obliged to learn the mysteries of a special craft.

10. This change has made the regular production of high quality bread a simpler operation. It has become practicable for men to enter into competition with established bakeries when they themselves have considerably less skill and experience than would have been required half a century ago.

11. During recent years the use of chemical substances known as " improvers " has spread widely. These improvers are twofold in nature. Some of them improve the effectiveness and reliability of the yeast, whilst others have a definite effect upon the behaviour of the protein in the gluten of the flour. To a certain extent improvers compensate for the deficiencies in flour from weak wheats. The net result is to increase somewhat the volume of bread from " weak " flours and, consequently, the number of loaves which can be produced from a sack of flour. In Australia, the production of these improvers is for the most part in the hands of a few firms. The use of improvers is almost universal amongst bakers; the balance of opinion in the trade and technological experience of their actions on flour and dough favour their use. In the interests

of public health, certain limits should be set to the nature of the chemicals which may be used for this purpose and these are discussed in Section VIII. c. 12. Other substances are added to improve the palatability of the bread. The use of salt falls into this category and is older than history. Some bakers find that the addition of dried milk powder has a beneficial effect. Others use small quantities of malt or fatty substances. Numerous other ingredients are also employed in the production of different lcinds of fancy bread.

13. In North America the public is provided with a wide range of different breadstuffs which are usually obtained by altering the primary dough mixture. Whether a wider introduction of special lines would induce the Australian public to increase its consumption of breadstuffs

11

should be investigated by the industry. At present the Australian people exhibit little interest in the quality of bread. They regard bread merely as " bread "-a dull and uninteresting associate for more tasty foods. A certain amount of general interest might be aroused in connexion with this matter and thereby people might learn to descriminate between good and indifferent bread.

Under such circumstances, the skilled baker, who is a true craftsman, would stand a better chance in competition with those who are producing a semi-standardized article of no particular quality. 14. Australians who are interested in the evolution of industry generally might well recognize the necessity for forming and expressing defihite opinions on the subject of quality.

Thereby they would automatically exert a beneficial 15. There is need for the exertion of such an influence for, a] though bread of high quality was shown to the Commission in all States, on the other hand undeniably poor quality bread was seen by the Commission in too many instances. The people are entitled to expect this important item in the dietary scale, not only at a reasonable price, but at a proper standard of quality and

palatability. There is room for substantial improvement in the quality of bread supplied to the community, and there should be steady insistence on behalf of the community until such improvement has been made and sustained. The existing situation reflects in some cases a lack of skill in the preparation of the article, and in others the deliberate production of a cheap product under stress of competition. Whether one or other or both of these factors contribute, the feels that the industry should be forced to a realization that only a high-class

article should be manufactured and sold. The matter is one for action by all parties interested in the welfare of wheat, flour or bread industries. It would therefore be best dealt with by a joint permanent research committee to which the Commission will refer in its final report.

(c) THE MECHANICAL EQUIPMENT OF BAKERIES. 16. In those parts of Australia visited by the Commission there are numerous bakeries operated entirely by hand. The actual number of such businesses is unknown because the statistical record of bakehouses is far from complete. Although these hand-operated bakeries

are numerous, their output is probably not a very large proportion of the total Australian production. Their influence on the economics of the industry is important, particularly in the main centres of population. 17. As a rule, the first stage in the mechanization of a bakery consists of the installation

of a machine for mixing the dough. In their simplest form these machines contain mechanically­ operated blades, which mix the water, flour, yeast and salt until a dough of fairly even consistency is obtained. There are various types of dough-mixers and many of them have additional refinements such as flour sifters and reservoirs in which the water is held at the correct temperature.

18. The advantages of mechanical dough-mixing are numerous. The somewhat laborious task of making the mixture in a trough over which the operative has to lean whilst exerting considerable physical effort is avoided. The hygienic aspects of eliminating human contact with the dough at this stage are discussed later in paragraph 112. A flour sifter ensures that the dough will not contain the fragments of bag and twine which inevitably find their way from

time to time into the mixture when no sifter is employed. The better control of the temperature of the water is significant because the temperature of the dough affects the action of the yeast considerably. 19. Many· bakers expressed the opinion that mechanical dough-mixers should be an integral

part of bakehouse equipment wherever practicable. The smaller machines are not expensive and the cost of the power required to operate them is not large. In the case of very small bakeries with a low output the installation of such a machine might appreciably increase costs, but this outlay should not be allowed to outweigh the hygienic considerations.

20. In well-equipped bakehouses special rooms are set apart for the purposes of controlling the conditions of temperature and humidity during the period of fermentation. The necessary automatic machinery is provided so that a fairly narrow range of temperature conditions within which yeast works best can be maintained. A comparatively high humidity in the atmosphere prevents evaporation of moisture from no crust. on the .of. the

dough is formed. In the absence of such conditwrung . roon::-s It :s to avmd vanatwns in the quality of the bread, howeyer carefully the are watched and

adjustments made. so far practwable.. '!he use of conditwmng rooms ensures a better quality of bread with a nnrumum of variation. 21. The dough is next into. lumps of sufficient t_o .make the requ!red loaves. In manual bakehouses this process IS carried out on tables, the IndiVIdual lumps bmng weighed on scales. In mechanized bakeries machines are used to carry out the process of division and

weighing. ·

12

22. The dough is then " rounded " or handed up, a process which can be' carried out effectively in machines designed for the purpose. The more modern machines are apparently entirely satisfactory in this respect and avoid too rough a treatment of the dough which sometimes took place in the earlier models. One other factor of value in mechanization at this stage is that the chance of the dough picking up foreign materials is eliminated.

23 . In mechanized units the first " proving " process is carried out by means of a conveyor with canvas pockets, the whole being contained in an overhead cabinet . ,

24. After about a quarter of an hour in the first prover, the dough is kneaded and moulded . and then placed in tins or finally shaped according to the type of loaf. Machines are available for this process and have been installed in some bakehouses in Australia. 25. During the second "proving" the loaves should be kept for about 30 minutes in an

atmosphere controlled as to temperature and humidity. In Australia the conditions under which this second " proving " is carried out vary from t hose which are completely satisfactory to those which are the antithesis of the necessary requirements. It is no wonder that the quality of the bread made from the same kind of flour varies considerably.

26. Figure I . kindly prepared at the Commission's request by Mr. T. Hatton, Managing Director of Baker Perkins Pty. Ltd., ill ustrat es diagramaticaJly the layout of a mechanized bakery. The letters designating the various pieces of machinery on this figure have the following significance :-

(a) Flour Blending, Elevating, Sifting and Conveying Machine.-This machine blends the flour, aerates, sifts and conveys it to-(b) Automatic Flour Weighing Machine.-This machine weighs each batch of flour accurately before the flour is passed to the movable dough pans. (c) Mixing and Kneading Machines. (d) Automatic Water Measuring and Tempering Apparatus.-This machine weighs

the water before it is run in to the kneader. (e) Dough Pan with Dough, maturing in dough room. (j) Elevating or Tilting Machine.-This machine locks the dough pans in a saddle and tilts the pl:tns so that the dough is discharged direct to the dough hopper

below.

(g) Air Conditioning Unit.-This unit keeps the dough room at constant degrees of temperature and humidity. (h) Dough Hopper. (j) Dough Divider.

(k) Conical Type Handing-up Machine. (l) First Prover. (m) Multi-spindle Moulding Machine. (n) Panning_ Machine.-This machine rol_ls the 2-l?. dough J;lie?es out to an.y

reqUJied. It can also be fitted with a deVIce for splitting a 2-lb. p1ece mto t wo single 1-lb. pieces. (p) Final Prover. (r ) Swingtray Type . Travelling Oven.

(d) BAKING OVENS.

27. The essential features of the baking oven are that the heat shall be reasonably uniform on all sides of the material which is being baked, and, further, that the t emperature shall be capable of effective control. If temperatures become too high, not only is the bread charred on the outside, but there is considerable loss of weight and consequently some danger that the loaves may be under the standard weight. If t emperatures are too low the process is too slow, and the loaf will be inferior in quality. .

28. In early days the ovens were made of fire-brick and the fuel was burnt inside the oven until it had become heated t o the proper temperature, which was judged by the skill of the baker, aided by a few simple tests which had been developed as a result of experience. Then the remaining fuel was removed and the loaves were placed in the oven and baked.

29. Numerous improvements have been introduced into the design of ovens. The first was the development of the Scotch oven ; t he fuel is burnt in a furnace built at the side of the oven and the hot gases pass through the oven. Subsequently, ovens were built in which the heat was applied externally both above and below the actual oven itself, so that the gases from the fuel did not come into contact with the bread. Still further improvements in many directions have been introduced in recent years. In some cases the heat is conveyed to the oven through a series of steam pipes, the ends of which are heated in a furnace adjacent to the oven, the pipes or tubes being sealed and a high degree of super-heat thereby attained. Some electric ovens are also in use.

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-. -

·

"' lfl® \

. M. · e ,N

1

.

'

15

30. In some types the steel floor of the oven is constructed so that it can be withdrawn from the baking chamber and the full batch of bread inserted at the one time. The main objection to this particular type is that the heat radiated from the movable tray affects the operatives whilst they are removing the bread from the tray after withdrawal from the oven.

31. In the continuous-baking ovens the bread is carried firstly through the proving chamber and then through · the baking chamber on a continuous moving steel conveyor, the heat being applied in most ·cases both in the automatic and semi-automatic ovens by means of the super-heated steam pipes mentioned above.

32. Wood fuel is almost invariably used in the Scotch type of oven. Wood, coal, coke, briquettes or oil can be used in ovens where the fuel gases do not come in contact with the bread. , 33. In all the latest types of ovens thermometers or pyrometers are provided so that the temperatures in the various parts of the oven chamber can be observed.

(e) G;ENERAL OBSERVATIONS.

34. The economics of automatic and semi-automatic baking equipment are largely influenced by the size and type of business. The capital expenditure is considerable and, unless the costs of labour or materials involved in production can be reduced to an extent sufficient to pay the interest and depreciation charges on this capital, there is no financial advantage in

mechanization. 35. At first sight one of the advantages of a completely-mechanized plant appears to be that it could be run continuously through the major part of each twenty-four hours. This, however, proves to be generally incapable of realization because delivery can only be effected

during part of the daily period and, consequently,. a continuous system of production would involve storage and double handling in the bakehouse for at least half the output. Bread is a bulky product and cannot be stored effectively unless the loaves are spaced from one another. Also, as at present made in many parts of Australia, bread loses its fresh crispness rapidly and is

not as saleable when 16 to 24 hours old as it is when new. Consequently, under existing-circumstances, complete mechanization when applied to the baking trade must lose some of those economies which it achieves in other industries which can be 1nade to operate continuously. 36. On the other hand, the mechanization of baking op erations has contributed towards the improvement of the· conditions under which the operatives work, whilst it has diminished

the amount of skill required. It has also improved the hygiene of the industry. These are definite advantages and should be recognized by all parties concerned including those engaged in safeguarding the conditions and wages of labour. 37. The standards of industrial regulation existing in the industry have been evolved

gradually. They have been built up to meet conditions which .are in process of change with the introduction of more or less completely-mechanized plants. There has been an attempt to adapt such industrial requirements to the new circumstances which have arisen and which will, presumably, continue to arise, but the attempt has not been entirely successful.

38. The benefit or loss to be derived or suffered from the complete mechanization of this or any other industry is, of course, a. highly controversial subject. It is of such importance in this industry, however, that the Commission has considered it expedient to deal with it in fuller detail in a later section of this Report.

29vl

SECTION II.-THE STATISTICAL DATA REGARDING THE NUMBER OF BAKERIES AND EMPLOYMENT IN THE INDUSTRY IN RECENT YEARS.

19

11.-THE STATISTICAL DATA REGARDING NUMBER OF BAKERIES AND . EMPLOYMENT IN THE INDUSTRY IN RECENT YEARS. 39. The accurate investigation of the history of the industry in each State during the last few years has been a matter of some difficulty. The sources of information available were the States' Statistical Registers compiled by the Statisticians, and the Reports of the Chief Inspectors of Factories. The first difficulty was in the gTouping of cake and pastry manufacture with bread­ making. This grouping is a logical one and no criticism of the procedure is here implied ; the fact that it was a complication, however, remains. A more serious difficulty arose from the fact that the Statistical Bureaux afford information about " factories " rather than "bakehouses" and that a bakehouse only becomes a factory when four or more persons are employed in its operations, or when power is used to drive the machinery. Consequently, a two-1nan bakehouse with a dough mixer driven by electric power is included in the returns, while a three-man establishment worked entirely by hand is omitted. In the Statisticians' figures en1ployers when engaged in the bakehouse are included in the total" number of hands employed," and breadcarters are excluded. All bakehouses where bread is made for sale must be registered, so that the returns of the Chief Inspectors of Factories are more satisfactory in this respect ; in addition, they give some subdivision of the data into district a'reas in certain cases. Such returns, however, do not

usually give information about the magnitude of the operation concerned. This can only be gleaned from the Statistician's figures. Paragraphs 40 to 72 show the history of the industry during the last few years as judged from the available data.

40. In New South \Vales the returns of the Department of Labour and Industry show the number of bakehouses both in the metropolitan area and in the whole of the State.

41. Table 1 shows for the metropolitan area and for the whole State the number of bread and pastry bakehouses for each of the years 1927 to 1934.

TABLE 1.

- 1927. 1928. 1929 . . 1930. 1931. 1932. 1933 . . 1934.

Metropolitan .. 546 527 610 759 804 876 900 931

Whole State .. 1,418 1,376 1,537 1,774 1,757 1,864 1,907 1,996

42. Table 2 shows the number of hands employed in these bakehouses.

TABLE 2.

- 1927. 1928. 1929. 1930. 1931. 1932. 1933. 193•1.

Metropolitan .. 2,459 2,443 2,724 2,746 2,484 2,580 2,696 2,831

Whole State .. 4,246 4,218 4,533 4,700 4,213 4,348 4,502 4,767

43. The State's Statistical Registers record the number of bread, cake and pastry" factories" grouped according to the number of persons engaged !n them and also the number of persons engaged in each factory group. The data are set out In Tables 3 and 4.

TABLE 3.

NUMBER OF FACTORIES.

- 1927-28. 1928- 29. 1929-30. 19 30-31. 1931-32. 1932-33. 1933-34.

Less than 4 persons . . .. 39 56 68 103 122 135 165

4 persons . . .. . . 50 50 69 65 76 78 80

5 to 10 persons . . .. 136 159 153 139 151 161 161

11 to 20 persons . . .. 42 46 49 39 40 37 40

21 to 50 persons .. . . 14 12 15 19 13 11 11

51 to 100 persons .. . . 3 3 1 2 3 4 3

101 and over .. . . 2 2 3 2 1 1 1

Total .. . . 286 328 358

I

369 406

I

427 461

F.403.-2

20

TABLE 4.

NUMBER OF HANDS EMPLOYED.

-

I 1927-28. I

1928-29. 1929- 30. 1930-31. 1931-32.

I

1932-33. 1933-34.

Less than 4 persons . . .. 94 140 177 249 286 325 407

4 persons .. . . . . 200 200 276 260 304 312 320

5 to 10 persons . . .. 931 1,065 1,013 912 975 1,053 1,074

11 to 20 persons . . . . 578 687 693 533 558 548 584

21 to 50 persons . . .. 388 355 436 522 364 281 324

51 to 100 persons .. . . 183 199 67 132 208 231 204

101 and over ' . . . . 449 451 536 381 224 245 248

Total ..

··I

2,823 3,097 3,198 2,989 2,919

I

2,992 3,161

-

44. Both sets of data show a very marked increase in the number of establishments, but this increase has been greatest in the case of the small bakeries. There has been a relatively small increase in the number of persons employed. 45. For Victoria Table 5 shows the number of bakehouses (bread) in the years 1928-1934, as reported by the State Secretary for Labour. It shows the marked increase in the number of such establishments in the Melbourne, Ballarat and Geelong areas between 1928 and 1933.

TABLE 5.

District.

I

1928. 1929. 1930. 1931. 1932. 1933. 1934.

Metropolitan .. . . 229 235 252 285 293 329 308

Ballarat . . .. . . 18 22 19 23 24 26 25

Bendigo . . . . .. 20 22 17 20 18 20 19

Geelong . . . . .. 19 21 20 22 25 24 25

Warrnambool .. . . 7 6 3 6 8 6 9

Other Districts .. . . 568 549 594 551 623 655 643

'

Total .. . . 861

I

855 905 907 991 1,060 1,029

46. Data collected by the Government Statist is presented below, and therein only factories employing four or more men or using power are included. Table 6 shows the number of bakery " factories " in Victoria grouped according to the. number of hands employed from 1927-28 to 1933-34. It reveals that there has been a steady increase in the number of small baking establishments since 1928- 29, while there was a decline in the numbers employing 4, 5 to 10, and II to 20 hands, and some increase in the "21 to 50" hands group.

TABLE 6.

- 1927- 28. 1928-29. 1929-30. 1930-31. 1931-32. 1932-33. 1933-34.

Less than 4 persons . . .. 138 137 152 168 187 221 225

4 persons . . . . .. 119 82 84 79 78 88 95

5 to 10 persons . . .. 209 205 176 172 167 156 167

11 to 20 persons . . .. 38 49 35 35 37 28 31

21 to 50 persons . . .. 11 10 13 12 11 14 14

51 to 100 persons . . .. 3 3 3 2 2 2 3

101 and over . . . . 1 I 1 .. . . . . . .

Total . . .. 519 487 464 468 482 509 535

47. A detailed comparison of the preceding tables is not quite satisfactory because the facts are collected at different times of the year and in different ways, but the general tendency towards an increase in numbers of bakeries recorded since 1929 is apparent in both tables. The size of those bakeries which have led to the increase is important ; the difference between the figures reported by the Department of Labour and those of the Government Statist is a rough measure of the number of bakehouses which employ fewer than four hands and use no machinery.

The differences between these figures-for the years 1928 to 1934 respectively-are 342, 368, 441, 439, 509, 551 and 494. These figures illustrate the marked growth in the number of small bakeries between 1928 and 1933.

21

48. Some of the changes showfl: in Table 6 may be due to men being put off during the depression and causing a transference of establishments from one group to another; the re-equip1nent of some bakeries with more machinery and larger plants may have altered the data to some extent. The figures for the number of men employed in the bakehouses belonging to the size groups of Table 6 are given in Table 7.

TABLE 7.

-

I

1927- 28 . 1928- 29.

I

1929- 30. 1930- 31.

I

193 1-32. 1932-33. r 1933-34.

--

Less than 4 hands . . .. 307 321 323 394 418 500 487

4 hands . . .. . . 476 328 336 31 6 312 352 380

5 to 10 hands .. . . 1,390 1,336 1,180 1,129 1,096 1,045 1,085

11 to 20 hands . . .. 552 655 463 489 530 405 438

21 to 50 hands . . .. 349 310 355 405 378 428 383

51 to 100 hands .. 181 188 186 163 144 153 223

101 and over .. . . 112 110 108

I

. . . . . . . .

Total . . .. 3,367 I 3,248 2,951 2,896 2,878 2,883 2,996

49. The statistical data therefore confirm the suggestion that, in general, there has been an increase in the number of small bakeries in Victoria during the last few years and that the larger establishments have been affected either by the closing of a number of t hem, or a contract ion in the number of employees they were able to keep engaged.

50. As regards Queensland the reports of the Chief Inspector of Factories and Shops furnish information segregated according to a number of geographic districts. The factories concerned in baking bread, pastry, biscuits, &c., are grouped together, but those making confectionery are returned .separately.

51. Table 8 shows, for the districts indicated, the number of baking factories during each of the years from 1928-29 to 1933-34. TABLE 8.

-

I

1928-29. 1929-30. 1930-31. 1931-32. 1932-33. 1933-34.

Brisbane . . .. . . 122 126 156 152 165 164

Bunda berg . . .. 14 11 8 9 10 10

Cairns . . .. .. 8 9 6 10 9 11

Charters Towers . . .. 9 8 8 7 7 7

Dalby. . . . . .. 2 2 2 3 3 3

Gym pie . . . . .. 8 8 8 7 8 8

Innisfail . . . . .. 6 7 8 7 7 8

Ipswich . . .. 16 18 22 24 25 28

Mackay . . .. . . 19 19 21 22 25 26

Mary borough . . .. 11 10 12 11 11 12

Mount Morgan .. . . 3 2 3 3 3 2

Rockhampton . . . . 14 17 17 15 15 16

Toowoomba .. . . 13 14 13 11 13 15

Townsville . . . . .. 21 25 24 22 19 19

Warwick . . .. . . 7 7 6 9 7 7

Total .. . . 273 283 314 312 327 336

52. The data suggest that there was a marked increase in the number of bakeries in the Brisbane, Cairns, Ipswich and Mackay districts. 53. The returns of the Registrar-General are shown in Table 9, which shows the number of bread (including cakes and pastry) factories by employment groups.

TABLE 9.

- 1927-28. 1928-29. 1929-30. 1930-31. 1931-32 . 1932-33. 1933-34.

Under 4 persons .. . . 5 9 18 21 27 37 36

4 persons . . . . .. 54 51 40 64 56 56 76

5 to 10 persons . . .. 115 122 122 122 116 109 98

11 to 20 persons . . . . 23 22 31 19 23 17 8

21 to 50 persons . . .. 10 13 9 6 4 6 6

51 to 100 persons . . . . 2 2 2 . . . . . . . .

101 and over .. . . 1 1 1 1 1 1 1

Total .. . . *210 *220 223 233 227 226 I 225

• Includes billcuita .

22

54. In general, the figures for Queensland show a considerableincrease in the total number vf bread factories since 1928-29, but a marked decrease in the number of factories in the groups employing a considerable number of persons. This evidence supports the view that the larger bakeries have been less successful in the face of the increase in numbers of sn1aller establishments. Moreover, the difference between the figures reported by the Department of Labour and those of the Registrar-General indicat e, with a reasonable degree of accuracy, the number of bakehouses which employ fewer than four hands and use no power plant. The differences between these figures for the years 1928-29 to 1933- 34 respectively are :53, 60, 81, 85, 101 and Ill. They illustrate the marked increase in the number of small bakeries during that period.

55. F or South Australia, the returns of the Chief Inspector of Fact ories and Boilers do not include bakehouses in which no paid labour is employed, nor is it necessary to register a business where family labour is solely responsible for its operation. 56. Table 10 sho ws for t he n1etropolitan area of Adelaide (a district cornprising an irregular area of roughly 10 rniles radius), t he number of factories making bread, pastry, &c., segregated according to the nun1ber of hands employed (from data supplied by the Chief Inspector of Factories and St ea1n Boilers, South Australia).

TABLE 10.

I

I

I -I

1928. 1929. 1930. 1931. 1932. 1933. 1!}34.

Number of factories employing I

I not more than-2 employees . . . . 70 66 74 88 88 88 84

2 to 4 employees .. 34 41 47 31 32 26 32

4 to 10 employees .. 23 21 17 20 18 14 19

10 to 20 employees .. 10 11 8 6 6 6 8

20 to 30 employees . . . . .. 3 1 1 2 1

30 to 50 employees .. 3 3 1 2 1 1 1

Total . . .. 140

I

142 150 148 I 146 137 145

I

57. These data show that , whereas t he total number of factories other than one-man and family has not increased markedly during the period 1928 t o 1934, .there has been a increase in the smaller organizations and a di1ninution in those of larger types. 58. Table 11, presenting data derived from the same source, shows for the "Metropolitan Area" of Adelaide the number of employers and employees in factories 1naking bread, pastry, &c.,

during each of the years 1928- 1934. · TABLE 11.

- 1928.

I

192 9. 1930. 1931. 193 2. 1933 . 1934.

Employers working at trade-ill 109 119 126 127 127 132 Males . . . . . . Females . . . . . . 16 18 23 20 8 13 24

Total Employers .. 127 127 142 146 135 140 156

Persons employed-Males-21 years and over .. 426 391 414 406 348 339 356

16 years and under 21 .. 132 137 136 134 141 125 128

14 years and under 16 .. 31 23 16 11 14 13 21

Females-

30 19 25 21 19 18 24 21 years and over .. 16 years and under 21 .. 24 22 19 9 14 7 9

14 years and under 16 . . 4 3 2 1 . . . . 2

Total Employees . . 647 595 612 582 536 502 540

59. These data show a very definite increase in the number of employers actually working, and also a diminution in the number of employees of all t ypes. 60. The returns of the Government Statist deal with factories in which more than four persons are employed or power is used. They apply to the whole of the State.

23

61. Table 12 shows for South Australia the number of " factories " er{gaged in the manufacture of bread, cakes and pastry, grouped according to the number of employees, during each of the years 1927-28 to 1933-34. TABLE 12.

(Data from the Government Statist.)

I

- 1927-28. 1928-29. 1929-30. 1930-31. 1931-32. 1932-33. 1933-34.

Under 4 persons .. . . 17 22 22 23 28 29 33

4 persons .. . . . ·' 4 16 17 14 22 17 -19

5 to 10 persons .. . . 43 34 40 41 39 44 43

11 to 20 persons .. . . 16 13 14 14 12 12 9

21 to 50 persons .. . . 6 7 5 5 4 4 5

Total .. . . 86 92 98 97 105 106 109

62. Table 13 giving the Return of Persons employed In South Australian bakeries as defined by the Statist shows the following grouping:-TABLE ·13.

- 1927-28. 1928-29. 1929-30. 1930---31. 1931-32. 1932-33. 1933-34.

Under 4 persons .. . . 46 60 58 60 73 78 84

4 persons . . .. . . 16 64 68 56 88 68 76

5 to 10 persons .. . . 293 237 263 252 262 283 282

11 to 20 persons .. . . 222 201 216 207 170 162 133

21 to 50 persons .. . . 201 218 182 147 115 114 138

Total .. . . 778

I

780 787 722 708 705 713

63. These statistical data show that in the State as a whole there has been a definite tendency for the small bakeries to increase and for the larger establishments to employ less labour. For the purposes of the present inquiry, it is unfortunate that under the Industrial Code no return is made of the bakeries which are worked by one or more menbers of a family. It seems probable from the evidence given before the Commission that, had such a return been available, the information for the metropolitan area would have been striking.

64. In Western Australia the records of the Department of Labour apply to that part of the State south of latitude 26° (roughly, south of Geraldton) and permit of a subdivision of the State into three regions-" Perth," "Suburban" and "Country and Gold-fields." These records define a bakehouse as "Any place in which any bread, cake, pastry, sweetmeats, or sugar

goods intended to be sold are baked or prepared for baking, and includes any place or room used in connexion with the bakehouse for storing such food when baked or to be baked, or any material to be used for the manufacture of such food to be baked." The figures, therefore, seem to include confectionery establishments.

65. Table 14 shows the number of "bakehouses" in the three subdivisions of Western Australia in each of the years 1928-1934. TABLE 14.

District. 1928, 1929. 1930, 1931.

I

1932. .1933. 1934.

Perth .. . . . . 29 30 34 40 44 34 35

Suburban . . .. . . 78 82 84 90 88 92 98

Country and Gold .:fields .. 175 196 195 184 210 162 219

Total .. . . 282 308 313 314 342 288 352

66. These figures indicate that there has been an increase of about 25 per cent. in the number of "bakehouses" in these districts in the seven-year period concerned, and that the increase has been fairly uniformly distributed through the Divisions.

24

67. The employment figures derived from the same source are somewhat complicated by the fact that they include the carters as well as those occupied solely in the bakehouse. The figures include worlcing proprietors. 68. Table 15 shows for the three subdivisions of Western Australia the total number of

those working in "bakehouses" during each of the years 1928 to 1934. TABLE 15. - -

District. 1928. 1929. 1930. 1931. 1932. 1933. 1934.

Perth . . . . .. 236 222 247 278 284 237 250

Suburban . . .. . . 472 411 479 476 427 459 478

Country and Goldfields . . 456 493 520 465 502 521 527

Total .. . . 1,164 1,126 1,246 1,219 1,213 1,217 1,255

69. The returns of the Government Statistician deal wi.th factories in the statistical sense and have been used in constructing Tables 16 and 17, which show the number of bakery" factories " in Western Australia grouped according to the number of hands employed in each year from 1927-28 t o 1933-34, and the number of employees within these same groups.

TABLE 16.

NUMBER OF FACTORIES.

- *1 927- 28. *1 928- 29. *1 929-30. 1930- 31. 1931- 32. 1932- 33. 1933-34.

-

Less than 4 hands . . .. 18 21 22 29 39 38 51

4 to 10 ha nds .. . . 39 40 37 50 39 40 39

11 to 20 hands . . .. 3 4 4 6 5 3 4

21 to 50 hands . . . . . . . . . . . . . . 1 . .

Total .. . . 60 65 63 85 83 82 94

___ ..

• These fi gures exclude cake factories.

TABLE 17.

NUMBER OF PERSONS EMPLOYED.

- *1 927-28. *1928-29. *1929-30. 1930- 31. 1931-32. 1932-33. 1933-34.

Less than 4 hands . . .. 50 61 58 67 100 96 127

4 to 10 hands . . .. 201 206 190 276 225 229 220

11 to 20 hands .. . . 40 47 48 80 68 45 58

21 to 50 hands . . . . . . . . .. . . . . 23 ..

Total . . . . 291 314 296 423 393 393 405

• These figures exclude employees in cake fact ories.

70. A satisfactory direct comparison throughout the period is impossible owing to a change in the method of recording between 1929-30 and 1930-31. The figures, however, indicate a definite increase in the number of factories of small size. 71. For Tasmania, Table 18 shows the data collected by the Chief Inspector of Factories for Tasmania in respect of the number of bakeries and the number of persons engaged therein . In this t able "bakery "does not inc lu de est ablishments manufacturing biscuits and confectionery, and the number of persons engaged includes male and female employees and the employers themselves when occupied in the business. Employees include bread carters.

TABLE 18.

·- 1925. 1026 . 1927. 1928. 1029. 1930. 1931. 1932. 1983. 1934.

Bakeries . . . . . . 182 181 180 197 200 233 254 277 277 270

Persons engaged . . . . 528 473 517 503 485 533 543 526 598 586

25

72. The Deputy Commonwealth Statistician for Tasmania kindly furnished data with respect to "factories" in which bread and pastry were made in that State. There was some difficulty in excluding from the figures the returns of confectionery enterprises as " a few establishments carry on combined operations, but as these are small " the officer concerned concludes that "they would not affect the figures to any extent." 1929- 30 is the earliest year for which satisfactory data could be supplied. Tables 19 and 20 set out the position.

TABLE 19.

NUMBER OF ESTABLISHMENTS.

- 1929-30. 1930-31. 1931-32. 1932- 33. 1933-34.

Under 4 persons .. . . . . 6 9 8 6 9

4 persons . . .. . . . . 8 9 11 18 16

5 to 10 persons . . .· . . . 19 16 22 32 29

11 to 20 persons .. . . . . 8 6 7 6 7

21 to 50 persons .. . . . . 1 1 2 2 2

51 to 100 persons . . . . . . . . . . . . .. . .

101 and over .. . . . . . . . . . . . . . . . .

------ - ----- Total .. . . . . . . 42 41 50 64 63

TABLE 20.

PERSONS EMPLOYED.

- 1929-30. 1930-31. 1931-32. 1932-33. 1933-34.

Under 4 persons .. . . . . 15 23 19 15 21

4 persons . . .. . . . . 32 36 44 72 64

5 to 10 persons .. .. . . . . 127 112 147 203 186

11 to 20 persons . .. . . . . 111 87 97 85 98

21 to 50 persons .. . . . . 48 44 89 85 87

51 to 100 persons . . . . . . . . . . . . . . ..

101 and over .. . . . . . . . . . . . . .. . .

Total .. . . . . 333 302 396 460 456

73. Conclusion.-The general conclusion of this Statistical Survey confirms the contention of the Master Bakers that competition within the industry has increased during the last few years, and that this competition has mostly taken the form of an increase in the number of small bakeries rather than in an extension of the larger ones.

SECTION IlL-LABOUR AS A FACTOR IN THE BAKING INDUSTRY.

(a) THE HISTORY OF THE REGULATION OF LABOUR IN THE INDUSTRY ••

(b) THE PRESENT POSITION OF LABOUR REGULATION IN THE INDUSTRY AS

(i) Hours of work of bakehouse operatives (ii) Hours of work of breadcarters (iii) Wage rates for bakehouse operatives and breadcarters (iv) Apprentices and improvers

(c) CoNCLUSIONS ••

PAGB.

29

31 33 34 36

36

29

111.-LABOUR AS A FACTOR IN THE BAKING INDUSTRY.

(a) T'HE HISTORY OF THE REGULATION OF LABOUR IN THE INDUSTRY.

74. The conditions of labour in the baking industry have been subject to control under the general system of industrial regulation which has been built up during the last half century .. The first steps were taken during the period which followed the financial depression of 1891-93. The Commission has considered it unnecessary to follow the development of this system in detail

in each State, as although there are considerable interstate differences, the general trends have been similar.

75. Mr. C. J. Bellemare, Under-Secretary of the Department of Labour and Industry in New South Wales, has been good enough to prepare a comprehensive memorandum on the course of events in that State. The Commission is appreciative of this assistance and presents the whole memorandum in Appendix A.

76. A study of this Appendix reveals the nun1ber of different points in the labour structure of the industry which can be affected by regulations.

77. The following tables summarize the changes which have been made in the regulations governing rates of wages and length of the working week in the metropolitan areas of each State and in certain provincial cities and towns in Victoria :-

TABLE 21.

WAGES AND HOURS-OPERATIVE BAKERS AND BREADCARTERS.

Sydney-County of Cumberland.

Operative Bakers. Carters.

-

I

-

Wages. Hours. Wages. Hours .

.

£ 8. d. £ s. d.

1924 . . .. . . 5 0 6 46

(day) 6 0 6 46 4 10 0 48

(night)

5th June, 1925 .. . . .. .. 4 14 0 48

7th September, 1925 . . .. .. 4 16 0 48

8th September, 1925 .. 5 2 6 46

(day) 6 2 6 46

(night)

9th April, 1926 .. .. 5 12 6 44

28th June, 1926 .• . . .. . . 5 10 0 48*

4th September, 1926 .. 6 7 6 44

27th June, 1927 .. . . . . . . 511 0 48*

27th June, 1927 .. . . 6 8 6 44

26th December, 1929 . . . . .. 5 8 6 48*

26th August, 1932 . . . . .. 4 16 0 48*

26th August, 1932 .. 5 13 6 44

11th April, 1933 . . . . .. 4 14 6

tMay, 1933 . . .. 5 12 0 44

8th September, 1933 . . . . .. 4 12 0 48*

17th September, 1933 .. 5 3 0 44

24th October, 1933 . . . . .. 410 0

November, 1933 { .. 5 1 0

tNovember, 1934 .. 5 2 0 44 411 0 48*

tMay, 1935 .. . . 5 3 0 44 4 12 0 48*

• The award was made on the basis of 44 hours. By mutual between and Union it was decid ed to work 48 hours, payment being

mnde for the extra 4 hours at the overtime rate of time and a half. Th1s extra payment 1s mcluded m the wages shown above. t Operated from commencement' of first pay period in month shown.

1924-26 1927 ..

1927 ..

1927 ..

1928 ..

1929 ..

1930 ..

1931 . .

1932 . .

1933-35

1924-26 1927-30 1931* ..

1932-34* 1935* ..

1924

1925

1926-27-28 1928-29 1930 ..

1931

1932-35

30

TABLE 22.

Melbourne and certain Provincial Cities and Towns

Operative Bakers. Carters.

- -

Wages. Hours. Wages. Hours.

£ s. d. £ s. d.

.. . . 6 0 0 48 4 12 0 50

. . . . . . . . 4 12 0 50*

. . . . 6 8 4 44

. . .. . . . . 5 0 0 50*

. . . . . . . . 5 6 0 50* Garment allowance of 9d . per week

introduced

. . . . . . . . 5 6 0 50*

6

g{

50* . . . . . . ..

0

{g 15 6 44 5 0 50* Garment allowance increased to Is. .. .. 6 4 44 4 5 Of per week .. .. 5 6 4 44 4 5 0 50*

.. . . 5 010 44 4 5 0 50*

• During a week in which t he statutory holiday for breadcarters !B observed (twice monthly) the weekly ho?'"s are 46.

Year.

.. ..

.. ..

. . ..

. . . .

.. . .

TABLE 23.

H oba1t and Launceston

Operative Bakers. Carters.

-

Wages. Hours. Wages. Hours.

£ s. d. £ 8. d.

5 0 0 48 4 2 0 48

5 7 0 48 4 6 0 48

5 0 0 48 3 19 6 48

4 8 0 48 311 6 48

4 9 0 48 3 12 6 48

• Subject to ri se and fall quarterly in cost of l!ving figures.

TABLE 24.

Adelaide---Metropolitan.

Operative Bakers. Carters.

Wages.

£ 8. d.

J! l5 3 0

5 3 0

*5 7 6

*5 7 6

*5 7 6

*4 17 0

*4 5 0

Hours.

48 } 48 ' 48

48

*48 *48 *48 *48

*48

Wages.

£ 8. d.

4 8 6

4 12 0

4 16 6

4 16 6

4 6 6

{

4 6 0

3 14 0

3 14 0

{

}

Hours.

51

51 50 50 48 48 48 48

} (Until March, 1925)

(Until November)

• Apply alBO to other parts ol State, the 1931 rates (in other parts of State) applying from March, 1931, 11nd the 1932-35 rates applying from June, 1982.

Bakers.•

-

Wages.

£ s. d.

1924-25 . . . . 4 18 0

1926 . . . . .. 5 3 0

1927 . . . . . . 5 3 0

1928t . . . . . . 5 3 0

1929 . . . . .. 5 3 0

1930 {4 18

0

. . . . .. 4 15 0

1931-33 . . .. 4 12 0

1935 . . . . . . 4 12 0

Hours.

44 44 44 44 44 44 44 44 44

TABLE 25.

Brisbarw.

Carters.

Wages.

£ s. d.

4 5 0

4 10 0

4 14 0

4 14 0

4 14 0

4 9 0

4 9 0

4 3 0

4 6 0

-

Hours.

44 44 44 44 44 44 44 44 44

• The fi gures given In these columns refer to conditions und er which a baker class ifi ed In the Brisbane award as a "second hand baker" works. He is the second man in a bakery when more than one man is employed. .

t In 1928 the following variation was made and still operates :- In the Factories and Shops District of Brisbane in consideration of employees starting t heir work at 7.30 a.m. or 7 a.m., as the case may be, such employees shall be paid 7s. per week above the rate prescribed.

31

TABLE 26.

Perth.

Operative Bakers.• Carters. t

Year.

I

-

Wages . Hours . Wuges. Hours.

£ s. d. £ s. d.

1924 .. . . . . 4 15 0 48 4 6 0 48 Federal Award (Carters)

1925 .. . . . . 4 15 0 48 411 0 48 State Agreement (Carters)

1926-27 . . . . 5 0 0 48 and 44 4 16 6 48

1928 1929 1930

1931

1932

1933

1934

1935

.. . . . . 5 9 0 44 4 16 6 48

.. . . . . 511 0 44 4 18 6 48

f5 10 0 44 4 17 6 48 . . .. . . l_5 19 0 44

{5 11 0 44 4 9 6 48 .. . . . . . 4 15 2t 44 4 5 0 48 f5 5 0§ 44 4 3 6 48 . . . . . . (_5. 3 6 44 3 18 10t 48 H 2 0 44 3 18 10 48

1 0 44 4 0 9'11 48 . . .. . . 2 3 44

8 11** 44

(4 13 3 44 4 1 · Ott 48 .. 14 13 6 44 .. . . 4 2 6 48 4 15 0 44 . . .. . . 5 5 Ott 44 4 2 6 48

Wage rates for carters include allowance of Is. per week for collecting money. • 1924 to December, 1926, agreement ln force. December, 1926, to 1935, awards ln force. t State agreements in force 1924 to October, 1933. October, 1933, to date award ln force . Financial Emergency Act order.

§ Financial Emergency Act order cancelled. Award (State) delivered 19th October, 1933.

• • Financial Emergency Reduction. tt Financial Emergency Act expires 31st December, 1933. :U Bakers starting time altered from 5 a.m. to 3 a.m.

(b) THE PRESENT POSITION OF LABOUR REGULATION IN THE INDUSTRY AS REGARDS-(i) HOURS OF WORK OF BAKEHOUSE OPERATIVES. 78. In cities and towns wherever there is a well-organized baking industry the public is accustomed to a daily delivery of bread except on Sundays and public and bakers'

holidays, but in country districts with scattered population less frequent deliveries are customary. It should be noted that Sundays and public and bakers' holidays in total are a not insignificant proportion of the year. 79. The work of the bakehouse is organized in such a way as to produce daily that amount

of bread for which a ready sale is expected. Prior to week-ends or special holidays almost double the normal amount of bread must be produced. Any system of regulation of wages and hours must allow for a certain amount of latitude in respect of these exceptional periods. Even more troublesome is the case which occurs when a statutory holiday precedes or follows a Sunday ;

under these circumstances it is necessary to bake a largely-increased supply. This is known in the trade as a treble supply, although it is not three times the amount of the daily requirements. This introduces a further complication of hours and wages. In some respects the production of bread is a public service which is intermediate between the supply of perishable goods such as milk, and the supply of relatively stable foodstuffs such as groceries ; and the problem of the condition of a proportion of the bread produced at a "treble" baking at the time when such

bread is used by the public requires consideration. 80. For many years it was customary for baking to start before or at midnight on "ordinary" days. The bread was then ready for delivery to the customers in a fresh but cool condition early in the morning. This state of affairs still prevails in Tasmania and in country districts in some States, but elsewhere the conditions of labour fix hours of starting on ordinary

days ranging from midnight in Melbourne to 7 a.m. in Brisbane. This naturally results in some inconvenience to the master bakers under the present competitive system when some customers want fresh bread delivered at an early hour, but it enables the operatives to live somewhat more normal lives . It is noteworthy that, whereas there are many occupations in which it is necessary for men to work during the night, there are few in which the operative is called upon to do all

his work during night hours as is the case with bakers where night baking obtains. 81. In each State regulations have been laid down governing the hours and times of work of bakers. In New South Wales these are provided for by the Industrial Commission under the Industrial Arbitration Acts, and the Day Baking Act 1926 is also in operation. In Victoria the

32

authority is the Bread Trade Wages Board, working under the Factories and Shops Act; in South Australia a Bakers' Board operates under the Industrial Acts in the metropolitan area, and an award of t he Industrial Court operates in all other parts of the State ; in \Vestern Australia the awards are laid down by the Court of Arbitration of that State ; in Queensland by the Industrial Court of Queensland, and in Tasmania by the Bakers' Wages Board, which operates under the Wages Boards Act.

82. Table 27 shows the hours and periods of work at present in force in the various States. In many cases distinctions are made between the metropo]jtan districts and the country areas. In Queensland certain special districts are set apart, but otherwise the State is divided into three divisions.

83. The first collunn shows that, except in South Australia and Tasmania, a forty-four hour week is prescribed, although certain modifications apply in some cases in weeks when the organization is affect ed by public holidays or special holidays afforded to the trade. Hours worked in excess of the total hours allowed in the schedule are paid for at a higher rate.

TABLE 27.

HOURS AND TERMS OF WORK IN VARIOUS P ARTS OF AUSTRALIA.

Counties of Cumberland and Northumberland

Country

Metropolitan (and certain pro­ vincial and rural areas) Other parts of State ..

Southern and Central Division­ Brisbane ..

Most other districts

Northern Divisio n

Adelaide­ Metropolitan Other parts of State

Metropolit:w

Country

Bakers.

Ordinary Night or Day.t " Double " Night or Day.

t Total hours ------·-------- -------- --;-----­

per week.

44

44

44

44

44

44

44

44

4S 4S

44 44

4S

Maximum hours.

Earliest starting time.

NEw SouTH WALES.

Latest fi nishing t.im e.

Monday to Thursday-S 15.30 a.m. 6 p.m.

Friday-6

Where working week Sunday to Friday-S 5.30 a.m. 6 p.m.

(excluding Sunday) 6 Sunday

Maximum hours.

10

10

starting time.

Midnight

No work between 6 p.m. Friday and 5.30 a.m. Sunday

mences on Monday-

Latest finishing time.

6p.m.

Where working week com- I

1 8 I 5.30 a.m. / 6 p.m. 10 Midnight 6 p.m.

No work between 6 p.m. on any double day and the prescribed starting time on the next working day. VICTORIA.

7 Midnight 7p.m.

Not re-

gulated QUEENSLAND.*

St 7 a.m. j 5 p.m.

No work on Saturdays. S 7 a.m. 1 6 p.m.

S (Tuesday to Friday)*

7 a.m. j 6 p.m.

(Sat.) 6 a.m. Noon

SOUTH AUSTRALIA.

10

Not re­

gulated

10

10

9

9p.m.

7 a.m.

7 a.m.

4 a.m.

7 p.m.

6p.m.

6 p.m.

3p.m.

I

9 I 5 a.m. I 6 p.m. j · 10 I 6 p.m. Ill a.m.

No t stated Notstated Notstated Notstated Notstated Notstated WESTERN AusTRALIA.

1

12 midnight Sunday I I

Tues. to Thurs. (Fri. 2 p.m.) § 3 a.m. I 6 p.m. l 10 8 p.m. S a.m.

As mutually agreed between the employer and Union. 'TASMANIA.

I

As mutually agreed between employ,er and employee. I I I I

• As Thursday is a whole holiday for breadcarters, little bread Is baked in the State. t Sundays-noon to 6. t Minor exceptions occur i n weeks both public holidays and bakers' picnics. § The hours of work each day t o be arranged to suit the requirements of t he shop provided t hat not more than on e shUt of 10 hours is wo rked during th (' week .

33

84. The regulation governing the number of hours which may be worked at ordinary rates during any one period of twenty-four hours takes notice of the difficulty which arises owing to the need for baking a double supply prior to week-ends or special holidays ; t herefore, although one maximu1n number of hours may be worked in any t wenty-four on ordinary days a different

maximum is laid down to apply on " double " and " treb le " days. In Tasmania no definite periods of work are laid down; the award states that such shall be "mutually arranged bet ween the employer and the employee." 85. Except in Tasmania the award in each State fixes a given specific period of the day during which the operative may be called upon to work his ordinary hours at ordinary rates of pay. In South Australia (metropolit an area) and vVest ern Australia t his period fa lls bet ween 5 a.m. and 6 p.m. and 3 a.m. and 6 p.m. respectively. In South Australia (metropolitan area)

there are 13 hours and in West ern Australia 15 hours during which t he n1ast er baker can instruct the operatives to work up to nine hours without paying thmn overtime rates. In New South Wales the period is for 12 hours ; in Victoria 19 hours ; in Brisbane 10 hours and other part s of Queensland usually 11 hours. .

86. This kind of award, although probably· favorable t o the operative in so me respects would make it difficult to operate economically a highly-n1echanized and continuous system of baking requiring a large expenditure of capital. Apart from the reduction of direct emplovment which mechanization involves, the present restrictions on t he hours during which bread-baking

is permitted hamper the development of mechanization, which would in the long run render the work of the operative less arduous. 87. The award in each State lays down specific regulations with regard t o the rat es of pay for work done in excess of the number of hours prescribed for the day or the week. These overtime rates differ considerably from State to State, but in gen eral they vary from" time and a quarter"·

to " double time ". They are set out in some detail in Appendix B. In some instances it is laid down that no overtime shall be worked when casual labour is available.

HouRs OF WoRK oF BREADCARTER S.

88. The breadcarters represent a more important section of the industry than is generally recognized. In the case of the average bakehouse more men are usually employed in delivering the bread than in baking it. 89. The conditions of work of the breadcarters are frequently laid down by a different

authority from that which prescribes the conditions of work in the bakehouse. In New South Wales there is a Breadcarters' Conciliation Committee under t he Industrial Arbitration Act. In Victoria there is a Breadcarters' Wages Board operating under t he Factories and Shops' Acts. In South Australia there is a Breadcarters' Board for the metropolitan area working under the Industrial Acts. In vVestern Australia the carters' award, like the bakers', is made by the Court

of Arbitration of Western Australia. In Tasmania, the carters work under an award of the St ate Wages' Board, and also under the Federal Carters' Award. In Queen sland the carters work under an a ward of the Industrial Court. 90. Table 28 shows the .hours and conditions of work of breadcarters in various parts of

Australia. The first column shows that the total hours which may be worked in the normal week vary between 44 and 50 in different States. In most cases the maximrnn hours which may be worked in any one day, or in any one " double " or "treble " day, are also prescrjbed. 91. The award also lays down the earliest hours at which a carter ma'y start and the latest

at which he may finish. The starting hour requires consideration in conjunction with the hour at which the baking operatives are permitted to begin work. Where night baking is in operation, there is ample time for the first batch of bread to have cooled down before any of the carters come on duty.

TABLE 28.

HOURS AND TERMS OF WORK IN VARIOUS PARTS OF AUSTRALIA. Bread Carters.

Ordinary Days. " Double " Days and Saturdays .

- Total hours per week. Earliest Latest Earliest Latest Maximum starting finishing Max imum starting fi nishing hours. time. t ime. hours. time. time. I

I

NEw SouTH W ALES.

Counties of Cumberland and i' I I I I I I Northumberland . . . . 44 8! 7 a.m. 6 p. m. 10 6 a .m. Notstated

Country . . . . . . 44 Not stated 6 a.m. 6 p.m. .

Provided that where the necessities of business so demand the number of hours specifie d may be increased by four hours per week without any liability to pay overt ime rat es under t he award.

34

TABLE 28-continued.

l

Ordinary Days. " Double " Days and Saturdays.

'J'otal hours per week. Maximum Earliest Latest Maximum Earliest / Latest

hours. starting finishing hours. starting finishing time. time. time. time.

VICTORIA.

I 50 /Not re-j 5 a.m. I 6 p.m. I Not re-j 5 a.m. I 7 p.m.

gulated gulated

- The actual delivery or carting of bread before 6 a.m. or after 6 p.m. in the metropolitan district is prohibited under the Factories and Shops Acts.

Southern and Central Division, Brisbane ..

Northern Division

Metropolitan area

Metropolitan

44

44

48

48

48

QUEENSLAND.

8 a.m.

5.45 p.m. r Saturdays 6.30 a.m.

6.45 p.m. I 8 a.m.

9 7 a.m.

8*

SouTH AusTRALIA.

I Not stated 1 6.30 a.m. I 6 p.m. WESTERN AUSTRALIA.

5.15 p.m.

6 p.m.

9 I 6 a.m. I Not stated' Saturgays j 5 a.m. I Not stated

TASMANIA.

I

No fixed starting and finishing time. ., I I I

• Except on day of weekly half-holiday.

92. Where the bread-baking begins at 5 a.m. it is practicable to begin deliveries about 8 a.m. In Brisbane, where baking does not begin until 7 a.m., little bread is available before 10 a.m., so that between 7 a.m. and about 10.30 a.m. the carters are able to deliver only bread baked the previous afternoon. As a percentage of the public demand new bread, it follows that the carters are relatively idle for a considerable period of the morning and then must make a second trip over the same round. A further disadvantage arises as there is a definite tendency to take the bread straight from the oven and put it in the cart without allowing it to

cool effectively. This lack of co-ordination between the hours of work of carters and bakers in Queensland is surprising. To a lesser extent, the same state of affairs prevails where the earliest hours for bakers are 5 a.m. Here the result is that extra carters have be employed in order to rush the fresh bread to the public.

93. In Australian cities, Saturday is_ the customary half-holiday for the general population. The fact that this is a heavy day for bread--carters means that they are at a disadvantage when compared with other workers. This is compensated by the allocation of special bread-carters' holidays, which are as follow :-

New South Wales

Victoria

Queensland

South Australia Western Australia

Statutory holiday third Wednesday in every month except in certain instances when Thursday is observed. Statutory holiday on first and third Wednesday in every month, but when a public holiday occurs in the same

week as the first or third vVednesday the public . holiday is to be observed in lieu of the Wednesday. Statutory holiday Thursday in each week except when a public holiday or " breadcarters' picnic " day occurs. Compulsory weekly half-holiday. Statutory monthly holiday on third Wednesday in every

calendar month ; when a public holiday occurs in any month the third Wednesday is not to be observed as a holiday except in the months in which Good Friday and Christmas Day occur. Tasmania Compulsory weekly half-holiday.

94. These special trade holidays complicate the organization of the industry to a certain extent, because the awards lay down that on such days no bread may be carted by anyone, whether master-baker or operator. The effect in' the bakehouse of the carters' holidays is that the day before each of thmn must necessarily be a "double day".

(iii) WAGE RATES FOR BAKEHOUSE OPERATIVES AND BREADCARTERS. 95. Table 29 showsthe rates of wa ges which are laid down for the various types of operative in the bakehouse. Table 30 shows the rates laid down in the awards governing the breadcarters' wages.

96. Regulations governing the rates payable to breadcarters for "overtime " work are set out in Append.Uc B.

35

TABLE 29.

RATIO OF MINIMUM WAGES FOR BAKEHOUSE OPERATIVES.

St ate. F oreman. Single hand.

I Dough maker. I o'"""" brum. ' Ovens man. I Unsldlled worker. I

Cumberland

Country

Metropolitan Outside

Southern

£ 8. d.

*5 15 6

t5 9 6

*5 15 6

t5 10 6

5 10 0

5 10 0

£ s. d. £ s. d.

NEw SouTH 'vVALES. 5 8 0 5 5 6

5 10 6 5 5 6

VICTORIA.

5 10 o I 5

0 ... o 10

5 10 0 0 10

QUEENSLAND.

§5 4 6 4 19 6 I 4 19 6

19 6

£ 8. d. 1

5 3 0

5 3 0

5 o 10 I

5 0 10

£ .s. d.

5 10 6

5 10 6

t4 12 o I 114 11 o

I £ s. d.

3 14 0

In t he shops and factories, District of Brisbane, employees are paid 7s . per week above the prescribed rate for starting at 7.30 a.m. or 7 a.m. Central Mackay

Northern

Metropolitan

Other parts of State

§5 10 0

5 0

§5 14 6

9 6

**4 10 0

t t 4 15 0

: : : 155 95 00

t4 17 6

t5 2 0

SouTH AusTRALIA.

4 10 o I . 4 5 o

I 4 5 0

4 5 0

4 5 0

WESTERN AUSTRALIA.

(i) Metropolitan, within 15 mile ti515 0 radius G.P.O., Perth ; §§5 12 6 5 10 0 5 10 0 5 5 0

li5 2 6

(ii) Outside 15 mile radius 5 13 0 5 10 6 5 10 6 I 5 5 6

G.P .O., Perth I

3 19 6

3 6 0

By award, dated 4th March, 1935, wages of bakers' operatives were raised lOs. per week by mutual arrangement confirmed by the Arbitration Court, in return for starting at 3 a.m. instead of 5 a.m. TASMANIA. 4 18 0 4 5 0 4 8 0 4 8 0

• In charge of four or more employees. t In charge of less than four employees. The Queensland figure for" operative baker" is that for a " second-hand baker." There is a higher differentiation for bakers' wages in that State.

§ Supervision of four or more fully-paid bakers. Supervision of three or less fully-paid bakers.

U Each additional oven 5s. extra . .,. Where two bakers. t t Where three or more. H Where four or more workers. I§ Where less than four workers.

Cumberland Country

State.

I

l

TABLE 30.

\VAGE RATES FOR BREADCARTERS.

One horse Two or more Iviotor

I

Vehicle. horse vehicles. vehicles . Foremen.

£ s. d. £ s. d. £ s. d. I £ s. d.

NEw SouTH WALES.

4 12 0 Lowest weekly wage for breadcarters. 4 3 6 JVIinimum wage .

VICTORI A.

4 5 0 4 7 6 4 5 0

Drivers assistant.

£ s. d.

Grooms, stablemen, yardmen.

£ 8 . d.

3 15 0

Stable workers only.

All others.

£ s. d.

4 5 0

Any employee who is required to wear a_clean washable outer garment shall be paid I s. per week in addition to ordinary rates.

Southern and Central Northern Division­ E astern District

"r estern District

Metropolitan Area

Metropolitan Area within 15 mile radius G.P.O. Outside 15 mile radius G.P.O.

F.403.--3

QUEENSLAND.

4 3 0 4/ 6 0 4 6

411 0 4 16 0 4 13

0 410 6

0

3 18 0

Adult 4 4 0

3 14 0

4 4 0

The minimum rate of wages payable to drivers in the Western District shall be 8s. per week in case of senio rs and 4s. per week in the case of juniors in addit ion to t hose set out for Eastern District. SouTH AusTRALIA . 3 14 o 1 1

*VIESTERN AusTRALIA.

I

*4 6 6 1

*4 7 0

*4 1 6

*4 2 0

TASM ANIA.

t3 11 6 (State Determination). I

• An ext ra shilling per week ls allowed for coll ecting rri on eys . t Subj ect t o wst of living adjustment s.

3 7 0

36

(iv) APPRENTICES AND IMPROVERS.

97. In vie w of the fact thBJt bread-baking is a definite craft, especially when not mechanized, some system of apprenticeship is desirable. Under this system, the master baker enters into a bond to find employment for the apprentice fo r a term of years and to teach him the trade, in return for which t he apprentice works for a lower monetary wage. As the wages are lower, it became necessary for the award to regulate the number of apprentices which might be employed in any one bakehouse. The regulations in this respect are set out in Appendix C.

98. Excent in vVestern Australia the awards allow a certain number of men to work in a bakehouse as "_,improvers " . As there is no guarantee that the master baker will find them mnployn1ent for a given period, their wages are higher than those of the apprentices (see Appendix C) . The award lays down the ratio of ' : improvers" to operatives in a bakehouse. Data in this respect are included in Appendix C.

(c) CONCLUSIONS .

99. Industries in Australia are controlled in respect of the hours of employment and money rewards of the employees engaged therein, and the conditions under which trainees may be employed and remunerated. In most cases, however, the Industrial Award or the Act of Parliament operates equally over all the workers in the industry, and the mere regulation does not of itself set up any new element of cornpetition. The proprietors of the businesses engaged in the industry are not favoured one against another. But the bread industry is t o some extent an exception to this rule. The industrial standards or the legislative restrictions are not applicable universally to all those engaged as workers in the industry. The working proprietor of a s1nall bakery and the n1mnbers of his family who assist hirn are not necessarily paid as wages the sums which the proprietor employing "hired" labour is required to pay. Further, in some States they need not observe the hours of work in the bakehouse to

which "hired" employees are restricted. The operation of the industrial law in the one case and not in the other, pla ces the employer of " hired" labour at some disadvantage. Price-cutting oftentin1es is possible because of immunity from the observance of industrial-awards. Evasions of a wards occur in an effort to meet the effects of such competition aJnd these evasions are sometimes with the connivance of the employee. The industrial position of the industry is

unsatisfactory in all States. 100. The effect which labour regulations may have on the economic results of various types of bakery may be considerable. Thus the restriction of the length of the portion of each 24 hours during which a bakery may operate is, in general, unfavorable to bakeries with highly­ mechanized or automatic machinery and ovens because such installations are designed to work at a steady speed and cannot be markedly accelerated. On the other hand, in a hand-operated bakery, or one where a. dough1nixer is the only form of machine, it is easier to deal with periods of pressure. ,

101. The demands of the public also affect the problem. The Australian housewife for the most part den1ands fresh bread and, in many cases, there is even a preference for so-called "hot" bread, which is delivered shortly after it has emerged from the oven. It seems likely that this habit is both wasteful and unhealthy, but its origin seems to lie in a very genuine dislike of stale bread. The Conunission considers that hot bread has in some cases become a fetish and is now confused in the public mind owing to a desire for a tangible proof of freshness complicated by the requirements of early delivery. In some country districts, full -day baking is carried on, t he bread being delivered t he follo·wing day and there is no evidence of dissatisfaction on the part of the cons.umers. However, the problen1 of staling It is a .complex matter, not solely one of drying. It may be connected to some extent With the flour Itself (s ee paragraph 430) ; it is by the . nature _of the climate, but it be by

the admixture of certain materials to the dough. There IS need for Investigation Into this question and such inquiries should be part of the task of the research organization which the Commission recommends. In t he meantime, the public demand for early deliveries of fresh bread renders the task of t he master baker very difficult in those areas where the hours of starting work are relatively late in the morning. It is frequently necessary to employ a larger number of hands than can be kept efficiently occupied during the whole period of the working day. Where "night baking " or an early start (e.g. 3 a.m.) are in vogue the problem ceases to be acute.

102. The question of "_night baking versus day baking" has discussed in most parts of the world and was the subJect of a Report presented to the InternatiOnal Labour Conference in Geneva in 1924. This Report and the Year Books of the International Labour Office show that legislation enforcing day baking is operative in Austria, Denmark, Germany, France and certain other countries, while in Argentina and Italy it also applies except in the case of large machine In Australia a Day-baking Act is in New South and the principle

. is also enforced In Queensland and, to a lesser extent, m Western Australia.

37

103. The Commission is in full sympathy with the movement to improve the conditions of work of the However, the industry is the servant of the community and

the problem will not be solved satisfactorily until on the one hand an average loaf with better keeping properties than that at present produced is made available to t he public, and on the other, the public is taught that" hot" bread is nutritionally undesirable. The forrner is a matter for research; the latter is one for propaganda and education. In addition, from the point of view of the public, there is little to be said in favour of t he very late start which prevails in Queensland.

THE BAKING INDUSTRY.

SECTION IV.-THE REGULATION OF THE BREAD INDUSTRY IN RESPECT TO MATTERS OF HYGIENE.

(a) THE NATURE AND SCOPE OF THE LEGISLATIVE REGULATIONS ..

(b) THE EXTENT TO WHICH THE REGULATIONS ARE OBSERVED

(c) DouGH MIXING

(d) WRAPPING

(e) DELIVERY

(j) SHOP SALES (g) CONCLUSIONS

PAGE.

41

41

42 42 42 42

43

41 .

IV. THE REGULATION OF THE BREAD INDUSTRY IN RESPECT TO MATTERS OF HYGIENE. (a) THE NATURE AND SCOPE OF THE LEGISLATIVE REGULATIONS. 104. The organization of the bread industry in such a way that a relatively large number oLconsumers obtain their supplies of this staple article of diet from a relatively small number of bakehouses, has rendered the control of those bakehouses in certain respects an essential matt er of public policy. This control can be divided under two heads. The first deals with the construction of the bakehouse from the point of view of the operatives who work in it. · The second deals with the construction of the . bakehouse and with the practices attendant upon the manufactur,e and distribution of bread from the point of view of the health of the consumer. In addition, the chemical composition of the bread is also a matter of import ance which is referred to in Section VIII., Sub-section (c).

105. The control of bakehouses in respect to the conditions under which the workers engaged in them have to work is a matter which is d ealt with under the Factories' Acts in the various States. These Acts are not the same in every Stat e, but , in general, there is a fairly close similarity. - ·

106. Under the Health Acts of the various States numerous regulations have been prescribed with a view to ensuring that the bread shall be made under hygienic conditions, and shall be kept free from contamination during the time when it is awaiting, or in course of, delivery. These regulations follow similar lines in most of the S_ t ates. The provisions which they lay down

deal with the following matters :-107. The nature of the floor of the bakehouse ; the surface of the ceilings and the walls ; ventilation; cleanliness of plant and utensils ; arrangements to enable t he operatives to wash their hands and instructions that they shall do so ; clothing of those engaged in the operat ions; protection from flies; personal habits of people in the bakehouse ; exclusion of animals from the bakehouse ; the prohibition of the use of the bakehouse for other purposes ; the covering of vessels

and containers used for carrying the food; regulations with regard to the receptacles for containing yeast; prohibition against working the dough on bags; regulations with regard to cleaning the floors; regulations with regard to the provision of lavatories and the location of such accommodation; a prohibition against bread being placed on the flo or; prohibition against

animals being allowed to be at large in the bakehouse yard ; provision for the removal of animal refuse in premises adjacent to the bakehouse.

(b) THE EXTENT TO WHICH THE REGULATIONS ARE OBSERVED. 108. The Commission has visited a large number of bakehouses in all the capital cities of the Commonwealth and in a number of country cities and towns. These visits of inspection revealed a wide variation with respect to observance of regulations. In a large number of

establishments conditions were satisfactory, whilst on the other hand in many instances the reverse was the case. Generally the larger establishments were well conducted, and, whilst some of the smaller bakehouses were efficient from the hygienic point of view, many others were not so.

109. The Commission has visited certain bakehouses iri which, though there were fly-wire attachments to the windows and doors, flies were numerous in the bakehouse. It is admitted that the control of flies is by no means an easy matter. At the same time, the intent

of the regulations with reference. to the provision of screens over windows a_nd doors is that flies shall be kept out. If the wue doors are left open, In order to afford convement access, then the spirit of the Regulations, at least, is being broken. The Commission does not suggest that the presence of flies in a bakehouse necessarily means that the bread is unhealthy, but modern

research has so clearly pointed to the fly as a of diseases of on e kind and another

that the point is one of considerable importance. In this connexion, it has been frequ ently observed that the prevalence of flies is often to be associated with the presence of stables in the immediate vicinity of the bakehouse. The Commission appreciates that , from many points of ·view the delivery of bread by means of horse-drawn vehicles is economical. It is also aware

of the fact that the regulations lay down specific conditions for the treatment of animal refuse from stables adjacent to the bakehouses. The rigid enforcement of these regulations is bound to be a matter of difficulty and cannot be carried out except by expenditure and care on the part of the bakehouse proprietor. From the purely hygien ic standpoint there wou ld be much to be

said for a total prohibition of all stables or other fli es can breed in in_

vicinity of bakehouses. enforcement of prohibitiOn 1s beyond_ the of practicability at the present time,. but. It eons1dered future legrslat1o_n In the of

food-producing prermses IS being considered. Meanwhile the complete daily removal of amrnal refuse and thorough cleanliness in the stables would be a move of great value in this regard.

42

II 0. In many bakehouses there are adequate arrangements for · storage of bread during the period after baking and prior to delivery. On the other hand, the Commission has observed cases in which the bread was stacked on the floor, and other instances where the bread racks were not as clean as they should have been.

Ill. Other factors t o which more attention is neccessary in particular instances are.-(a) Ventilation.- Where proper dough rooms are not provided in the bakehouses it is inevitable that ventilation presents considerable difficulty because of the necessity of n1aintaining regular temperatures in the atmosphere surrounding

the dough during the fern1entation period. (b) L1:ghting. (c) The condition of tvalls and flo ors.-For instance, in a number of cases walls, although superficially white-washed, have been broken at or near the gi'Ound level

thereby affording locations where insects may breed readily. (d) S uitable storage facilities for rnaterials in making bread, such as potatoes for yeast culture. - Instances have been noted where storage facilities were inade­ quat e and there was an unpleasant aroma arising fron1 stored materials. (e) P roper f acilities for the storage of plant and equiprnent.-In certain instances harness

was found in the same room as that in which baking was being conducted.

(c) DOUGH MIXING.

1I2. The practice of mixing dough by. hand is a primitive one, but is still carried on in many bakehouses. The Commission has watched this operation on numerous occasions. During many months of the year it is impracticable for the average man to mix dough without perspiring freely, and, in the course of the operation, it is inevitable that the perspiration should enter into the dough which is being made. While it is true that there is little danger of the spread of disease from this practice , because the dough is subsequently raised to a ten1perature high enough to kill most disease germs, yet if the consumers who purchase this bread knew that it contained a certain amount of the perspiration of the operative who made it many would probably refuse to eat it.

It is true that every time the housewife mixes the ingredients for making a cake in her own kitchen, the saffi:e condition of affairs occurs to some extent. Yet most people make a distinction between whay may be crudely described as their own dirt and that of other people. It has been already stated that a large number of bakers expressed their opinion that mechanical dough-mixers should be installed in every bakery. r:rhe Commission considers that this view is justifiable and recommends that the installation of a mechanical dough-mixer should be prescribed as an integral part of the equipment of bakehouses wherever practicable. As will appear later, such a requirement would have a beneficial influence on the industry as a whole, inasmuch as it would raise the bakehouse standard and render the opening of poorly equipped bakehouses more difficult than it is at the present time.

(d) WRAPPING.

113. From the point of view of practical hygiene, the ideal method of delivering bread would be in the form of wrapped loaves. Wrapping machines have been devised and have been installed in certain places, but there are cert ain obstacles to their use. The bread cannot be wrapped with until it is cool and, inasmuch as in many States bread is rushed out to the public owing to the restrictions of the hours of baking, the necessary time for cooling cannot be allowed to elapse before delivery occurs. Consequently, WTapping .the bulk of the loaves is, under present conditions, impracticable. Incidentally also, the cost of wrapping is by no means negligible. ·

(e) DELIVERY.

I14. There are regulations which govern the type of vehicle which may be used for the delivery of bread and of the baskets and containers in which it may be carried. The Commission was informed that in at least one State these regulations were sometimes broken, especially in those cases where the awards governing the hours of work of· breadcarters prevent the delivery on certain days. The breach usually consists in the use of private cars during unauthorized hours.

(f) SHOP SALES.

115. During recent years, the sale of bread in shops has become increasingly widespread. Many types of establishments now offer bread for sale including those conducted by grocers, confectioners and green grocers, those selling sweets or milk, as well as cafes, chain -stores, and departmental stores. Bread sold in this way js generally lower in price than when delivered to the houses of customers and the volume of sales is considerable. This fact suggests that selling of bread " over the counter " meets a demand from a certain section of the pe.ople. The conditions under which such bread is stored in the shops are sometimes unsatisfactory.

43

116. Even if the conditions ]aid down for the storage of bread in shops were far more exacting than they are at present and were fully observed, the further points of the cleanliness of the individuals handling the loaves and the nun1erous handlings unavoidably _involved would still remain. The restriction of the sale of bread to certain classes of shops, the general trade of which is cleanly in nature, is a subject claiming special consideration. The matter is discussed further in Section VI. (e).

117. It has been pointed out to the Commission that, whereas in many cases the regulations prohibit the return to bakers of bread which has been proviousiy delivered to a private household, there is no regulation against the shopkeeper returning stale bread to the baker who in turn may resell to private consumers. In such cases it is quite possible that the bread may have been handled and re-handled several times, and may have been contaminated. .

(g) CONCLUSIONS.

118. In the opinion of the C01nm.ission the need for greater attention to the conditions in which a proportion of the bread is produced. is considerable. The public should be certain that all bread sold has been made under satisfactory conditions and handled in a cleanly manner. ll 9. At present the system of inspection of bakehouses is dual in character, and there is evidence of lack of organization to ensure co-operation bet\veen the Departnwnts charged with inspection from the factory point of view and Departments charged with inspection from the

health standpoint. Further, in certain localities the control and efficiency of the health inspection is less than is desirable on account of shortage of staff. This is true both as regards bakehouses and shops where bread is sold. 120. The matter is one for State jurisdiction. In a later section of this Report the

Commission recommends the institution in each State of a separate authority charged with the general supervision of the bread supply. It would be the duty of such bodies, inter alia, to confer with the Health Authorities and to formulate plans whereby greater efficiency might be secured in the bread industry and a higher standard might be achieved. These Bread Authorities would be required to recommend standards of bakehouse construction and operation which would

eliminate such health hazards as are certainly present today, and the minirnum equipment of the bakehouse in respect to machinery for dough-mixing and for improving the bread produced, on the lines discussed in later sections of this Report .

•

SECTION V.-COSTS OF PRODUCTION, DISTRIBUTION, AND ADMINISTRATION, CAPITALIZATION AND THE FINANCIAL RETURN FROM THE INDUSTRY.

PAGE.

(a) PROCEDURE ADOPTED IN MAKING THE INVESTIGATIONS 46

(b) COSTS OF PRODUCTION, DISTRIBUTION AND ADMINISTRATION 48

(i) Procedure adopted in analysing costs 48

(ii) The number of loaves produced from one ton of flour . . 50

(iii) The price of flour as a factor in bakers' costs 54

(iv) The average cost of the 2 lb. loaf in the Metropolitan areas of the mainland States, and in the State of Tasmania 58

(v) The average cost of the 2lb.loaf in country districts of Australia. . 70

(c) CAPITALIZATION OF THE BREAD-BAKING INDUSTRY . . 73

(d) THE FINANCIAL RETURN FROM THE INDUSTRY-(i) The prices actually received for the 2 lb. loaf 79

(ii) The margin of profit per 2 lb. loaf in the Metropolitan areas and in Tasmania 87

(iii) The margin of profit per 2 lb. loaf in the rural areas of mainland States 92

(iv) A survey of profit and loss accounts of certain bakeries during the years 1931, 1932 and 1933. . 94 (e) SUMMARY OF THE FINANCIAL POSITION OF THE INDUSTRY 97

46

V.-COSTS OF PRODUCTiON, DISTRIBUTION AND ADMINISTRATION, CAPITALIZATION, TifE RETURN FROM THE INDUSTRY.

(a) PROCEDURE ADOPTED IN MAKING THE INVESTIGATIONS. 121. In August, 1934, a comprehensive questionnaire was issued to bakers throughout the Commonwealth. This questiom1aire was designed for the purpose of ascertaining (a) the annual costs of the business under the sub-heads Production, Distribution and Administration,

(b) earnings, (c) the assets actually employed in t he business at their book values, (d) the liabilities of the business, and (e) other statistical information necessary to the Commission's investigations. A copy of the questionnaire is attached as Appendix D. 122. Where more than one bakery was operated by a company, firm or master baker, a separate statmnent was required in respect of each establishment. The questionnaire provided for financial information for the four years', 1928, 1931, 1932 and 1933, but the majority of bakers who returned the staternent were unable to supply figures prior to 1933. \Vhere reliable returns for the earlier years were available they were used as a check in the analysis of costs.

123. The number of questionnaires distributed in each State, the number returned and the number used for costing and/or statistical purposes are shown in Table 31 hereunder :-TABLE 31.

Res u!t.s of Distributio n. Number used for Costing only.

Number Number used

State. Distributed. for Statistics

F orms Forms returned No R eply. Metropolitan. Country. and/ or Costing. Completed. Incomplete.

New South Wales .. 1)211 604 272 335 73 57 314

Victoria .. . . 832 465 184 183 49 20 205

South Australia . . 412 191 119 102 28 7 94

vVestern Australia .. 287 167 51 69 26 8 57

Queensland .. . . 696 320 161 215 30 18 77

Tasmania . . . . 164 95 29 40 29 .. 30

Commonwealth .. 3,602 I 1,842 816 944 110 777

I

For the purpose of this and other tabulations, the Federal Capital Territory figures have been included with those of ew South Wales. 124. The type of bakery business in connexion with which the manufacture or sale of pastry, confectionery, small goods or other sidelines formed a substantial part of the business operations has been excluded, except where the bread figures could be segregated and separate detail costs of the bakery section were ascertainable.

125. Where the business was carried on by a limited company, the following additional information was asked for :-(a) Particulars of share capital in 1924, with details of all subsequent additions, reductions, or reconstructions.

(b) The amount to the credit of each Reserve Fund in 1924, vvith particulars of amounts since transferred to or withdrawn from each such Fund. (c) The net profits earned, dividends paid and amounts transferred from Profit and Loss Account to Reserve Fund in l924t and in each subsequent year up to

1934.

(d) -Copies of Trading, Profit and Loss Accounts and Balance Sheets for the ten years 1924 to 1933. 126. The Commission visited all capital cities and many country centres in each State, and representatives of the Master Bakers' Associations in each State gave evidence before the Commission; in addition many indiv-i.dual master bakers gave evidence and supplied information with regard to their bread -baking practices, the financial position of their businesses, and their general experience of the industry during recent years. These witnesses were drawn from those whose accounts had been investigated by the Commission's accountants, and also from among those who do not keep accounts in a form suitable to the requirements of the Commission.

127. The bakers' returns used for the preparation of the financial statements included in this report were carefully examined ; only those which were complete and, in the opinion of the Commission, accurate, were used. Investigations have shown that in a large number of bakeries, especially among the smaller businesses, proper books of account are not kept.

128. The adoption, throughout the trade, of a simple and effective system of bookkeeping on standard lines is considered most desirable in the interests of all engaged in the industry.

;

47

129. The Commission is satisfied that the range of bakeries used as a basis for estin1ating the economic position of the industry is sufficiently comprehensive, although the number of large bakeries included is proportionately greater than that of s1nall bakeries because comparatively few of the latter' were able to supply inforn1ation in the form required. The sarnples have been drawn from bakeries of various types and sizes operating in all the c:bief cities and suburbs and in many country centres throughout the Commonwealth.

130. Table 32 illustrates the extent to which the investigated bakeries represent the bread supply of the areas concerned:-TABLE 32.

BEING A COMPARISON OF THE TONNAGE OF FLOUR USED ANNUALLY BY BAKERIES WHOSE FINANCIAL RECORDS WERE INVESTIGATED BY THE COMMISSION, WITH THE ESTIMATED QUANTITY USED IN THE MANUFACTURE OF BREAD BY ALL BAKERIES DURING 1933.

(1) I (2) I (3) I (4)

Number of Bakeries ,', Quant!ty of Flour Estim, Quantity of Percentage Column (2)

I t! t d used Annually by

1

Flour Uoed A_nnu_lly Be"r' to Column (S)

nves ga e · · :Baker1'es Column (1). 11 13 k " s ·

a a eues.

1

I 'r I P t Tons.

New South Wales-

I

ons. . ,

1

er cen .

Metropolitan 73 42,148 97,440 43.26

Country .. 57 11,206 96,593 11.60

Victoria-Metropolitan 49 26,118 78,248 33.38

Country .. 20 8,407 58,688 14.32

South Australia-Metropolitan 28 8,592 24,659 34.84

Country .. 7 740 18,900 3.92

Western Australia-Metropolitan 26 6,156 16,364 37.62

Country .. 8 1,043 16,206 6.44

Queensland-Metropolitan 30 10,109

18

23,645 42.75

Country 3,760

Tasmania 29 4,280

45,713 8.23

17, 952 23.84

NoTE.-The quantities shown in column 3 are estimates and have been arrived at by multiplying population figures for the areas concerned (Census, 30th June, 1933) by the per capita consumption of bread figures as supplied by the Comm_pnwealth Statistician. In calculating figures for the country districts of the mainland States, it has been assumed that 10 per cent. of the country population bake their own bread.

131. For the purpose of an analytical survey of the various items of capitalization and cost, a sub-division of the bakeries investigated by the Commission was necessary. The size and extent of the 1nechanisation of the bakery are the two main factors influencing both capitalization and cost as between one business and another.

132. The Commission decided. upon the following sub-divisions under which the costs of the various bakeries have been grouped:-(i) "Hand" bakeries, comprising those without any mechanical plant whatever in the bake house.

(ii) "I\'Iachine and Hand" bakeries, comprising those where the mixing of the dough and/ or other work involved in the making and baking of bread is performed partly by hand and partly by machinery. (In such bakeries the machinery consists. of at least a doughmixer-usually motor driven-and perhaps in

other cases a divider and moulder are also employed.) (iii) " Semi-automatic " bakeries, comprising those where a considerable amount of machinery is involved. (In such bakeries the equipment includes a "prover," and in some cases ovens with moveable floors , while in others travelling

conveyors for bread or dough are also used.) (iv) "Automatic" bakeries, comprising those where travelling ovens are used in addition to other mechanical equipment mentioned in item (iii).

133. The "machine and hand" sub-divisions (i) and (ii) have been further subdivided according to the quantity of flour used· each week, viz. :-(a) Bakeries using up to 5 tons ; (b) those using from 6 to 10 tons, and

(c) those using 11 tons or more.

48

134. As the number of returns received fron1 bakeries of some of the larger groups was not sufficient to permit of the costs being displayed without reveaJing the confidential particulars of the business to which they related, it was necessary for the Commission to on1it fig ures in respect of a few large businesses. The costs thus excluded, however, did not show any marked variations compared with those referred to in the following sub-section.

(b) COSTS OF PRODUCTION, DISTRIBUTION AND ADMINISTRATION. (i) PROCEDURE ADoPTED IN A.NALYSING CosTs. 135. Costs have been computed on the basis of the 2-lb. loaf of bread. In respect of New South Wales, Victoria, South Australia and Western Australia, 1,330, Queensland, 1,345, and Tasmania, 1, 350 2-lb. saleable loaves, have been ac-cepted as being obtainable from each ton of flour used. The relationship between the weight of flour consumed and the number of loaves produced is discussed in Section V. (b) (ii).

136. The costs have been based primarily on the 1933 returns. Investigations showed that fl8ur and wages were the only items of cost in regard to which there were any material variations between 1933 and 1935 . . All amendments to the wages in terms of Arbitration Awards in each State up to June, 1935, were examined and all necessary adjustments were n1ade to

wages expenditure in each case to bring the costs to the basis of 30th June, 1935. The procedure which has been followed in dealing with the various items of expenditure and other costs is explained hereunder :-Production.

137 . Salaries and Wages .-These items include wages of foremen bakers, operative bakers, improvers, doughmakers, bakers' assistants, apprentices, and any other employees engaged in the bakehouse on bread-making. In cases where the proprietor of the business or any member of his family was employed in the bakehouse, but not in receipt of a reasonable salary or wage, an amount has been included in the costs at award rates either for a foreman baker, or a baker, according to the number of en1ployees engaged in the bakehouse or for the class of work upon which the individual was employed. If the person concerned was engaged only part time in the bakehouse the amount included to cover his salary, computed as above, was apportioned on the basis of the time actually spent in each section of the business .

138. Materials-Other I ngredients and actual expenditure on such items

as compressed or " spontaneous " yeast, improvers, malt, milk, salt, . &c., has been included under this sub-head. 139. Fuel (Fuel Oil, Coke, Wood, &c.).-This expenditure covers the cost of fuel for the bakehouse ovens only.

140. Power and Light, included Power and Light Used in the Bakehouse.-ln cases where separate meters are not installed master ·bakers were asked to make an apportionment on the basis of the estimated consumption in the' bakehouse. 141. Repairs and Upkeep of Bakehouse Plant and Machinery.-This expenditure covers all repairs to and/ or replacement of, bakehouse plant and equipment, including rnixers, troughs, dividers, ovens, tins and other small items of plant. Any items of expenditure of a capital nature have been eliminated.

142. Insurance.-This expenditure covers Workers' Compensation or any similar type of insurance premium paid to cover bakehouse employees ; also insurance against fire, explosion, and other risks associated with bakehouse plant, machinery and equipment. 143. Depreciation.-Depreciation has been included at the rate of 5 per cent. on the " reducing value " of the ovens, plant and machinery of the bakehouse.

144. In some bakeries, the ovens form part of the building and it was not possible to obtain fro m the accounts their book value as a separate iter.a. In such cases, depreciation was considered to be provicled for in the 2 per cent. allowed as depreciation on buildings. 145. Other production Costs.-Any items of expenditure considered to be properly chargeable to production and not included under any of the foregoing sub-heads have been treated as" other production costs ".

Distribution.

146. Salaries and -Wages.-This item includes wages of yard foremen, loaders, emergency men, carters (motor or horse-drawn vehicles), counter assistants and others employed solely in the distribution of bread. If the proprietor or any other member of his family was engaged on distribution but was not in receipt of a reasonable salary. or wage, an amount has been included

in the costs at the rate prescribed under the award applicable to the work upon which the person or persons concerned were actually engaged. If they were employed on distribution work not governed by any court a ward, the basic or living wage has been allowed ; if they were only employed part time on this section of the work, an appropriate apportionment of the salary or

49

waO'e charge computed as above has been included. Statements received from bakers showed that, in many instances, the wife or daughter of the proprietor rendered assistance by attending to shop sales as requir:ed throughout the day. ln all sueh cases an appropriate salary charge was included in the distribution costs.

147. Iforse Feed and Stable Expenses , &c.-This expenditure covers the cost of such items as fodder and bedding, shoeing, veterinary fees, replacement of horses, repairs to carts and harness, and insurance of stable assets.

148. The Commission did not allow depreciation of horses, but included their replacement as a charge against working expenses. Any purchased additions to the number of horses has been treated as capital expenditure.

149. Motor Expenses, &c.-These charges include running costs, repairs, registration, insurance, licence fees and all other expenditure incidental to the upkeep of motors used in connexion with bread distribution.

150. Power and Light.-In n1any cases it was impossi ble to ascertain the proportion of expenditure on power and light properly chargeable against distribution. Consequently, the , amounts have been allowed to remain as charges against production or administration, according to the allocation by the proprietors.

151. Insurance. - This expenditure includes insurance on distribution assets, other than horses, carts, harness and motors.

152. Depreciation.-Depreciation has been included 'at the rate of 10 per cent. on the reducing value in the case of carts, harness, &c., and 20 per cent. on the reducing value in the case of motors. ·

153. Other: Costs .. -Any items of expenditure COJ?-sidered to be properly

chargeable to diStributiOn and not Included under any of the foregmng sub-heads have been treated as " other distribution costs ".

Administration.

154. Salaries and Wages.-This expenditure includes all salaries and wages paid in connexion with the managerial or administrative side of the business, such as those of the manager, secretary, and office staff generally.

155. In cases where the proprietor performs a certain amount of managerial work, in addition to his duties in the bakehouse or on distribution work (provided the business is of sufficient size to warrant it) a nominal amount in addition to t hat included under production and/or distribution has been allowed against administration. Where the duties of the proprietor were not defined and he was engaged primarily in supervision, the living or basic wa ge has been

allowed as an administration cost if the flour used did not exceed 5 tons per week. Where a business was large and was carried on by a sole proprietor who performed on]y managerial duties, an allowance by way of weekly salary to cover his services has been rnade at the rate of £1 per ton of flour used per week, with a maximum salary charge of £10 per week. If the flour used exceeded 10 tons per week, the amount to be allowed by way of proprietor's salary in any such

cases has been determined by the Commission according to the merits of each case.The foregoing principles have been also applied where a member of the proprietor's family was engaged in a managerial capacity.

156. It was found that in some bakery businesses the wife or daughter of the proprietor renders assistance to the extent of writing up the books of account and other records, without monetary consideration. In · such cases, an amount has been .included as a charge against administration calculated on the basis of the prescribed living wage for females, according to the time actually employed on the work.

157. Directors' Fees.-Where considered reasonable, the amount paid by way of directors' fees been allowed as a charge against administration. ·

158. Printing and Stationery, Telepho ne , Travelling and Legal Expenses. -All expenditure on the above-mentioned items has been allowed as a charge against administration, unless examination of the books of account revealed the necessity for amendment. 1

159. Discounts.-Very little had been charged to working expenses on account of discounts allowed. 160. Advertising, Subscriptions to Tra_ de Associations, Audit and Accountancy.-Vnless considered to be unreasonable, all expenditure of this nature was allowed.

50

161. Bank Oharges.-These include only charges for keeping accounts; at this stage of the analysis interest on borrowed money was not included. 162. Bad Debts.-Amounts actually \VTitt en off on account of bad debts have been included as expense items. 1\iany bakers only include as earnings the amount actually collected and, consequently the Commission recognizes that t he amounts ascertained and treated as bad de bts cannot be regarded as fully including all losses under this head.

163. Other Ad1ninistration Costs.-Any items of expenditure considered to be properly chargeable to administration and not included under any of the foregoing sub-heads have been treated as "other administration costs".

Other Costs.

164. Rent.-The Commission has allowed 5 per cent. on the book value of the bakers' interest in the ownership of the property for the purpose of providing a rental charge, where the land and buildings are owned or partly owned, by the baker. ·

165. Rates and Taxes (other than Income Tax).-The actual amounts paid for local rat es and taxes have been included in the costs. Federal and State income taxes have not been t aken into consideration.

166. Depreciation on Buildings.-After careful consideration, the Commission decided to allow, as an item of cost to bakery proprietors who owned their business premises, 2 per cent. on the book values of brick buildings, and 3 per cent. where the premises are constructed of wood or partly of wood and partly of brick.

167. Interest on Borrowed Money.-This item represents interest actually paid on borrowed money used in the bakery businesses in respect of mortgages, loans, advances and bank overdrafts. No interest or return upon the baker's own capital or on share capital in the case of companies, is recognized or included under this head.

168. Flour.-The Commission is aware that many bakers are able to buy their flour in advance according to their judgment of the market and, in this way, sometimes are able to reduce the cost of flour . . On the other hand, many bakers are not able to take similar advantage of the market. Again, there are other bakers who, by paying cash within a specified time or for other reasons, are able to secure trade or special discounts. In view of the complications mentioned, the actual cost of flour has not been shown in the tabulated statement of costs.

Consequently, the Commission decided for co1nparative cost purposes, to include flour at a uniform price of £11 per ton, after allowing for the sale of bags, in respect of both metropolitan and country areas. The relation of the ,cost of flour to the cost of the loaf is the subject of detailed consideration in Table 35, paragraph 186.

(ii) THE NuMBER oF LoAVEs PRoDUCED FROM ONE ToN oF FLouR. 169. The matter is of major significance in the investigation because it indicates the measure of the baker's ability and because any discrepancy may appreciably affect the calculation as to costs and profits. The number of loaves obtained from each sack of flour depends on a variety of factors.

170. A certain number of burnt, broken or unsaleable loaves are made from time to time in every bakery business. This number should not be high when reasonable efficiency is maintained. Losses due to such causes are allowed for in the computations.

171. The amount of water which is worked into the dough during mixing varies. The inherent quality of the flour sets some limit to this amount; some flours absorb much more water than others without becoming unworkable. The strong flours typical of Canadian hard wheats are particularly good in this respect. In Australia, the flour from some wheats­ and especially when these are grown under appropriate conditions of climate and soil-are very satisfactory. Such varieties as Comeback, Mirnster and Pusa No. 4, particularly when grown in drier districts, give high quality flours especially when the climatic conditions happen to be favorable during the period of ripening and harvest. The subject was dealt with at some length in the Commission's Second Report (see pages 185 to 192.) A comprehensive survey of this

matter over a number of years is overdue (see Second Report, paragraph 311.) At present it can be said that most Queensland wheats and those grown in certain districts in New South Wales, Western Australia and South Australia are of high quality ; in Victoria, the production of high grades is very limited, and at present the flour from Tasmanian wheat is not well suited for bread-making. While in general it is to be expected that rather more loaves will be obtained

51

from the sack of flour in Queensland than in other States, the divergences are not as great as might be expected because many millers exercise considerable discretion in their wheat purchases in order to maintain the quality of their flour. This practice is not universal, so some degree of discrepancy in the number of loaves obtained per ton of flour is to be expected.

172. The legislation governing the weights at which bread may be sold varies from State to State and is detailed in Table 33. The first column shows the title of the Act concerned. According to these Acts bread may be sold in loaves of 1, 2 or 4 lb. in all States other than South Australia, where only the 2 lb. loaf is recognized. Column 2 of the table shows the extent to which special classes of bread are exempted frorn the general weight regulations. The notable exceptions relate to Vienna bread in the case of Victoria and to the lower weight standard in

Tasmania for all loaves baked singly, i.e., not in batches. As a result of these exceptions, Victorian data on loaves per sack of flour wi1l be higher wherever the proportion of Vienna bread is considerable. In Tasmania also the number of loaves per sack should be greater on account of the lower weight demanded for the type of loaf which is most fr equently made. Column 3 specifies the parties who are required to have accurat e scales and weights. Column 4 shows the maximun1 period which may have elapsed since baking, for the test to be valid. Column 5 shows the number of loaves which are to be weighed when a test is being made. Column 6 shows the penalties for infringement of the regulations and various special provisions.

TABLE 33.

LEGAL REQUIREMENTS IN THE VARIOUS STATES REGARDING THE WEIGHT OF BREAD.

State and Title of Act.

(1)

New South Wales,

Bread Act 1901,

amended 1923 and 1926

Victoria, Bakers' and Millers' Act 1928

Classes of breadstuffs exempt from Regulations.

(2)

French or fancy

bread and rolls

Rolls (less than 8 oz.) and Vienna bread

Queensland, Health Rolls (less than 8 oz.) Acts of 1900,

amended 1917 and 1922

South Australia,

Bread Act 1891,

amended 1893 and 1908

Western Australia, Bread Act 1903,

amended 1908, 1911 and 1915

Rolls or French rolls (less than 4 oz.)

Rolls (less than 8 oz.) Bread where spe­ cially ordered in writing by pur­

chaser

Parties required to have accurate scales , and weights.

(3)

Bakers, sellers, and deliverers

Bakers, sellers, and deliverers

Bakers ..

Sellers and de­ liverers

Sellers and deli­ verers

Maximum period aft er baking within which test of bread is valid.

(4)

24 hours .. ..

24 hours .. ..

18 hours

No specifications ..

Any bread on pre­ mises of bakers or sellers or in carts, &c., is deem ed to

be intended for

huma n con sump­ tion and sale

Tasmania, The sale of 1. Rolls (less 8 oz.) Bakers and shop 24 hours . .

the Bread Act 1896 2. Fancy bread sellers

baked separately and crusted all

over in loaves of wt. 14.30 and 60 I

oz. only

Number of loaves t o be weighed when t es t is being made.

(5)

Four of same denom­ in ation or size or

in any larger or

smaller quantity as may be found

convenient

Not less than six (if there are that

number) of same denomination or size or as to such

large number as is found convenient

Four of same denom­ ination or size or in any larger or

smaller q uan tity as may be found

convenient (Bread weighed only in bakeries)

No specifications ..

Penalties for infringe­ ments of Regulations and Special Provisions.

(6)

I. Maximum penalty 5s. per oz. deficient* 2. Onu:s of proof re­ garding time bread

has been baked is on baker

I. Maximum penalty 2s. 6s. per oz.

deficient 2. Bread, once de­

livered to cus­

tomers will not be tested for weight 3. t

I. Maximum p enalty, 5s. per oz. defi cient* 2. Onus of proof

regarding time

bread has been

baked is on baker

Maximum penalty, first offen ce 40s.

subsequent offence, £10

N ot less t han six if Maximum penalty, t here beth atnum- £20

her of same de­

scription and size and if not then as to as ma ny as there m ay be

Not less than six (if there a re that

number ) of same denomination or size or as to such

large number as is found convenient

Maximum penalty , 2s . 6d. per oz.

deficient*

• u ·nless accused t enders a valid excuse, e.g., that an accident in baking or otherwise occurred, or that t he condition was occasioned by or through some contrivance or confederacy to injure the party accused. t It is not sufficient to support a conviction that from this greater number a smaller number- though still greater than six-can be picked out and when weighed ahow a deficiency.

173. These regulations are framed for the prote?tion of the public in the matter of the weight of the loaves. The inspectors of the Departments occasional

and now and again prosecutions result. The ComilllSSIOn _has no .reason t o thmk that there 1s widespread evasion of the regulations, but as few housewrv s mgh t he loaves t hey buy, it is F.403.-4

52

clear that at tin1es of extensive and intensive competition and cut prices the weight of the loaf will naturally be as near the legal margin as it can be made. The present regulations leave much to be desired (see paragraphs 188 and 189 of this section). ·

174. Under normal bakehouse procedure, the dough intended for a 2 lb . loaf is cut off and weighed prior to the final moulding. The majority of bakers who gave evidence informed the Commission that they " weigh off" the dough at 2 lb. 4 oz., except in Tasmania, where the custom varies between 2 lb. 2 oz . and 2 lb. 4 oz., owing to the different legal requirements. In several States there have been individual bakers who have admitted that their practice was to use 2 lb. 3 oz ., or 2 lb. 3! oz. only.

175. The question of the actual composition of the· bread is also one of importance. The following is a de:finition of bread as laid down in the various Food and Drug Regulations in New South V'iales, Queensland, South Australia, Western Australia and Tasn1ania :-Bread is the porous substance obtained by the moistening, kneading, pani:fication and baking of flour, with provision for the mechanicsJ separation of the dough by air or carbonic acid gas, and properly baked. It shall contain not more than forty-five parts per centum of water in any part of the loaf; it shall yield not more than two parts per cent um of total ash, nor more than two-tenths of one part per centum of ash insoluble in decinormal hydrochloric acid. It shall not contain any foreign mineral substance except salt (sodium chloride) ; and ten grammes of the crumb taken from the centre of the loaf shall not contain more acid than is required for the neutralisation of two cubic centimetres of decinormal solution of sodium hydro:xide.

176. These provisions are intended to prevent fraud in connexion with the quality of the bread and the ingredients used. The maximum moisture content is specified ; flour adulterants are prohibited and unduly acid bread must not be sold. These regulations also have the effect of rendering illegal the use of some of the " improvers " which have come into vogue in recent years. The use of such substances for the purpose of improving the quality of the bread does not seen1 to be undesirable, provided that they are not of such a nature as to be injurious to health. The need for permitting their introduction into the dough has been recognized in Victoria in recent legislation under which the use of alkaline acid phosphate, ammonia chloride, bromates and calcium sulphate are permitted up t o specified amount. It

would appear that in other States the authorities adopt a tolerant attitude on the matter.

177. 'rhe baking trade com1nonly accepts the figure ·1330 as being indicative of the average number of saleable 2lb. loaves made from a ton of flour, and, although some bakers make careful checks of their output from tin1e to tin1e, a large number do not adopt such precautions. The attitude of the latter group .is that they "weigh off" the dough at 2 lb. 4 oz. under a "rule of thumb " procedure. -

178. The Comnussion obtained by letter the experience of a large number of bakers in this matter. The replies were varied; while some informants stated that their results varied widely from ti1ne to t ime vvithin defined limits, others stated an average figure . The result of the inquiry is set out in Table 34 in which :the replies have been sorted out into classes according

to the number of 2lb. loaves obtained from a ton of flour . TABLE 34.

Class limits, i.e., Number of bakers who obtained: New South Victoria.

I

South Western

I

Queensland. I

Tasmania. Wales. Australia. Australia.

Less than 1,280 loaves . . . . 5 2 .. 3 3 . .

Between 1,295 and 1,304 loaves . . 10 8 .. 7 7 2

Between 1,305 and 1,314 loaves . . 5 1 1 3 1 ..

Between 1,315 and 1,324 loaves . . 13 13 7 10 6 ..

Between 1,325 and 1,334 loaves . . 42 31 2 19 26 8

Between 1,335 and 1,344 loaves . . 13 5 .. 4 2 . .

Between 1,345 and 1,354 loaves . . 17 3 2 3 16 1

Between 1,355 and 1,364 loaves . . 6 2 . . . . 6 3

Between 1,365 and 1,374 loaves . . 7 1 .. . . 4 1

Between 1,375 and 1,384 loaves . . 1 . . .. . . . . 2

Between 1,385 and 1,394 loaves . . 2 4 1 1 4 ..

Between 1,395 and 1,404 loaves . . 1 . . . . .. 2 3

More than 1,404 loaves . . . . . . . . . . . . 1 1

122 70 13 50 78 21

179 . The frequency .distribution of the data illustrates either the wide differences jn efficiency between bakers in respect to the yields of loaves they obtain or the lack uniformity in the estimates which son1e of them are able to make on the matter. It may be Inferred that a figu:J?e of 1330 is reasonable for New South .but is a?- understatement for at lea.st a moderate number of bakers in Queensland. In V1ctona, 1330 IS an acceptable figure especially

53

having regard to the regulation 'vith reference to Vienna bread of which a considerable quantity is sold. In Western Australia, 1330 is a reasonable average; for South Australia the same figure is reasonable, but the data are not adequate. Finally, in Tas1nania the figure for the average should be higher largely owing to the lower legal weight of the loaf when crusted on all sides.

180. The Commission endeavoured to obtain other evidence on the point from the statistical information contained in the bakers' answers to questionnaires ; there were many complications owing to the amount of rolls, buns and ViennaJ loaves which can easily lead to an error of 5 per cent.

181. Actual witnesses when questioned on the 1natter gave varying replies of which 1330 was by far the most frequent. There were smne 1nen who boasted of larger figures obtained under test, but in several cases these men had omitted to record the amount of flour used in "dusting", i.e., the flour used to reduce the stickiness of the surfaces of the "divided" pieces of dough prior to baking. Officers in charge of bakehouses of government institutions stated that they were able to obtain somewhat better results. In some instances, however, they were referring to "batch" bread which loses rather -less weight during baking and, in most cases, their conditions of work are not quite so strenuous as in the average cmnmercial bakehouse ; a,nd there would be little or no rejection of bread on account of damage.

182. The present yield of saleable loaves rnust not be taken to be a final figure for all time. The average yield will increase in the future with improven1ent in the quality of the flour. Such an improvement will follow the more intense study of the problem which is long overdue and which the Commission elsewhere recon1mends.

183. In this connexion it is interesting to note that in England, the Royal Commission on Food Prices (1925) accepted the figure of 1335 loaves to the ton of flour as an average.

184. The general result is that, while 1330 2-lb. saleable loaves can be made from a ton of average quality Australian flour in most mainland States, the figure of 1345 is probably more accurate for Queensland, and in Tasmania, owing to rather different legal requirements, 1350 should be obtained. As the costs have been worked out for each State separately, the consequent corrections can be readily applied. It is noteworthy that the variation is of the order

of 1 per cent., so that in a 2-lb. loaf cost of 4. 5d., it represents . 045d.

185. The large majority of bakers fi11d it necessary to use improvers of fairly standard types such as sugars, malt or certain chemicals. Apart frmn these, sorne bakers also add other ingredients such as dried or fresh milk, oils, fats, &c. These have the result of increasing the yield of loaves as well as improving palatability. This extra yield is largely offset by the extra

cost.

186. Table 35 indicates the difference in flour cost per 2-lb. loaf when flour is at various prices between £8 and £15 per ton and the yield of loaves varies from 1310 to 1370-TABLE 35.

Loaves per ton of flour.

Flour per ton.

1,310. 1,330. 1,350. 1,370.

COST OF FLOUR PE R 2-LB. LOAF.

d. d. d. d.

£8 1.47 1.44 1.42 1.40

£8 2s. 6d. 1.49 1.47 1.45 1.42

£8 5s. 1.51 1.49 1.47 1.45

£8 lOs. 1.56 1.53 1.51 1.49

£9 1.65 1.62 1.60 1.58

£9 lOs. 1. 74 1. 71 1.69 1.66

£10 1.83 1.80 1.78 1.75

£10 lOs. 1. 92 1.89 1.87 1.84

£11 2.01 1. 98 1.96 1.93

£11 lOs. 2.11 2 .07 2.04 2.01

£12 2.20 2.16 2.13 2.10

£12 lOs. 2.29 2.25 2.22 2.19

£13 2.38 2.34 2.31 2.28

£13 lOs. 2.47 2.43 2.40 2.36

£14 2.56 2. 52 2.49 2.45

£14 lOs. 2.66 2 .61 2.58 2.54

£15 2.75 2. 71 2 .67 2.63

54

187. Naturally the question of yield becomes more important as tQe cost of flour rises. When that cost is £12 per ton, the extra profit to a man who obtains an extra twenty loaves to the ton is three-hundredths of 1d. per loaf or 3s. 4id. for every ton of flour used. This saving in cost is about one-eighth of the amount of profit determined by the Commission to be fair and

reasonable, viz., !d. per loaf or 27s. 9d. per ton of flour used.

188. The laws regarding the weight of loaves are in some respects unsatisfactory. As they now stand the baker has to take all the risks of the loaf drying out during the period shown in Table 33, Column 4. The result is that one baker " weighs off" the dough slightly heavier during dry, hot weather, while another baker n1ay be prepared to take a chance and "weigh

off " the dough at the normal figure. The result is that the public gets a greater weight of bread on a dry matter basis from the first baker, but the difference is not noticed.

189. The present laws are based upon unsound principles and require recasting. Loaves of bread may be well over the statutory weight when delivered to the customer soon after they have been baked, but may be under the statutory '\Veight at the end of a hot, dry day. The master bakers are justified in their criticisms of the present Jaws and regulations when they point out that the insistence upon a certain minimum weight of a loaf of bread at the end of a statutory period of hours tends to the underbaking of the ]oaf rather than the production of the best possible loaf by baking to the proper extent. The intention of the laws and regulations is to ensure to the purchaser a certain minimum amount of foodstuffs in the form of bread when calculated back to the moisture-free basis. Therefore, a recasting of the laws and regulations, to ensure to the consumer the mirumum amount of actual foodstuff and proper provision for the

variations in the moisture content of the loaf, would be advantageous both to the consumer and to the baker. Assuming that the 2-lb. loaf of bread in its most palatable and nutritious form should contain normally 33! per cent. of moisture and 66-§- per cent. of dry (moisture-free) foodstuff, then the loaf should be allowed to weigh less than 32 oz. as the moisture content is lower than 33! per cent. and should weigh more than 32 oz. when the reverse is the case. The

development of an instrument whereby the average moisture content of six or twelve loaves of bread could be determined rapidly should not be difficult, and the inspectors would soon be able to determine, with a close approximation of accuracy, the relation between the ascertained weight of a certain number of loaves and the moisture content, and further, the nett weight of

moisture-free foodstuff.

(iii) THE PRICE oF FLouR AS A FAcToR IN BAKERs' CosTs. 190. The amount paid for the :flour used in the bakehouse is the most important of the bakers' costs, and the Co1n1nission in its investigations has had to give careful consideration to the many factors and conditions operating in the industry, all of which directly or indirectly

affect this item.

. 191. Usually in each State there is a "declared price " of flour which is fixed by the Flour Mill-owners' Association, or by agreement between fiour-nullers. In Queensland, the Price-fixing Commission fixes the maximum price which may be charged for flour. The terms of sale vary from State to State in the following manner :-

New South Wales.-'The declared price of flour is the same throughout the State except ·for certain regions where there are no mills and long haulage is necessary. In Sydney, and in country towns where there is a mill, the price includes delivery at the bakery, but the baker has to pay the cost of stacking. In towns without mills the price is " on trucks " at the local

station. A discount of 2s. 6d. per ton is allowed for cash within seven days.

to 1st September, 1935, in the metropolitan area, the declared flour price

covers delivery and stacking in the baker's loft. In the country, the price is scheduled at particular stations and is virtually a basic price plus the freight frorn the nearest mill. This price includes delivery to customers' premises in the case of a mill town, but in towns without mills the price is "on trucks " at the local railway station,

Discounts for cash with order are :-7s. 6d. per ton for 100 tons or more. 5s. per ton for 50 tons or more. 2s. 6d. per ton for 25 tons or more. On and after 1st September, 1935, the following selling and deli very terms were adopted by the Victorian Flour Mill-owners' Association :-

Discount for cash with order-On a minimun1 quantity of 50 tons, 5s. per ton. On a n1inimum quantity of 12 tons, 2s. 6d. per ton.

55

If delivery is not taken within six months from date of the order and payment, the flour may be either delivered or a storage charge at the rate of 2s. 6d. per ton per month thereafter until delivery 1nay be imposed.

Loyalty Rebate-A loyalty rebate of-- ,

5s. per ton is made to every purchaser who delivers a Statutory Declaration stating that he has not purchased any flour or wheaten meal from any person or company other than a member of the Association or an approved miller. 2s. 6d. per ton to the Master Bakers' Organization representing the metropolitan

area in respect of every ton of flour delivered to every baker or pastry cook in the area defined as the metropolitan area, and 2s. 6d. per ton to the Master Bakers' Organization representing the country portion of Victoria on every ton of flour delivered to every baker or pastry cook outside

the metropolitan area. .

Cartage Allowance.-Delivery of flour n1ay be made to buyers in the metropolitan area of Melbourne and in towns where there is a flour mill and in such other towns as may be specially provided for in this respect or alternatively, an allowance not exceeding 2s. 6d. per ton be made to such buyers in lieu thereof. ·

Special Selling Arrangements.-There are special selling arrangements under which members may sell flour or wheaten meal to persons, firms or companies from time to time determined by a general meeting or by the Committee. These arrangements provide that the Association price be charged less a maximun1 discount of 12s. 6d. per ton, payment to be made within 30 days after delivery and delivery to be made within three months after date of order.

Western Australia.-In the metropolitan area, flour is sold "ex mill" or " on rail" or delivered cartage fre e to buyer's store or bakehouse. Where the buyer does his own cartage no allowance is made. The basic price is the same in Geraldton as in Perth but, at other country mills, it is 7s. 6d. per ton lower. Thus, there is a separate price for every siding in the State based on its relative position to the nearest mill.

A rebate of 2s. 6d. per ton is paid to the Master Bakers' Association on all flour sold to its members and a discount of 5s. per ton is allowed to the baker for cash within seven days.

South Australia.-In South Australia the declared price of flour is uniform "as. far as Quorn on the mainland ". This price includes delivery into the bakehouse and (in the metropolitan area) stacking. No differentiation is made between a mill town and a non-mill town. Outside the metropolitan area if the baker takes delivery " on trucks " or at the local mill, he receives an allowance of Is. 6d. per ton in lieu of cartage.

The price quoted from time to time includes 5s. per ton for "loyalty" rebate and cash discount. "Loyalty" means loyalty to the Association and not to any one mill within the Association. The 5s. provides for 2s. 6d. loyalty and 2s. 6d. discount within seven days of delivery in the metropolitan area, and within fourteen days in the country.

192. Many bakers prefer to have flour in their stores for a period before using it.· This is particularly the case at the beginning of the year when the mills may be using the new season's wheat. Apart from the question of " maturity " some bakers, who are in a position to buy quantities of flour, increase their stocks when, in their judgment, a rise in price is to be expected. Many millers make a practice of advising their customers of impending price changes and, in some cases, give three days' notice of variations as . part of their business policy.

193. In the past, millers sometimes made it easy for bakers to speculate on the price of flour by permitted" forward" purchases on a" payment on delivery" basis. However, difficulties arose in cases when the baker's judgment was at fault and the price of flour fell during the period over which he had contracted to take delivery of the flour, because in some cases this speculative practice led to default by bakers·. In effect, the millers were carrying the risks involved and the flour-millers' associations have now adopted a policy that no large orders are accepted unless

payment is made with the order.

194. In analysing the flour item in the cost records of the bakery businesses for the year 1932-33, it was found that in many instances the average price paid per ton was lower than the average market price quoted by the flour-millers' associations. In other cases, the average price paid was than the average of daily prices throughout the year. Table 36 is

indicative of the very considerable divergences which are disclosed by this examination. The explanations of these divergences are various. They are partly caused by successful or unsuccessful speculation by bakers as to the future course of flour prices, but in cases where the prices paid are low, they are sometimes due to the of flour at prices below , and often

considerably below, the price as declared by the flour-millers.

TABLE

36.

TABLE

SHOWING

THE

AVERAGE

HIGHEST

AND

LOWEST

PRICES

PAID

FOR

FLOUR

(LESS BAGS)

BY

THE

INVESTIGATED

BAKERIES

IN THE

VARIOUS

,GROUPS

AND

THE

AVERAGE

DEULARED

PRICES

FOR

T H E

FI N ANCIAL

YEAR

1932-1 9 33.

Hand-1-

5

ton s .

A rea .

P r i c es

pai d p e r

ton.

A v e r a g e o f gr oup. Low e s t

High

e st

a v e r age

m grou p . ave r age

m g r oup .

£

s. d.

£

s. d.

£

s. d.

Sydney

..

9 15 1 8 6 8 10 4 1

Melbourne

. .

8 1

1

6 5 2 9

0 0

Adel a ide

..

7 18 6

611

3 8 18 2

Perth

..

8 2

10

7 8 3

8 7 9

Brisbane

. .

10

8

1

10

1

1

11

0 0

Tasmania

· .

8 13 3 7 13 9

911

6

.

.

Ma c

hine

and

Hand-16

ton s

and

ov e r .

Area.

Prices

pa id per

ton.

Av e

rag e of group. Low

est in div

id ua

l H i ghest

ind iv

idu a l

ave r a g e in gr ou p . average i n g r o up .

£

s. d.

£

s. d.

£

s. d.

Sydney

..

9 8 1 8 16 2 10 14

0

Melbourne

..

7 8 1 6 19 7 7 13 1

Adelaide

. .

. .

. .

. .

Perth

. .

..

. .

. .

Brisbane

. .

10

5

10 10

3

4

10 11

4

Tasmania

. .

..

. .

. .

T y p e a n d T o

nn age.

Ma c

hin e

and

H a nd-1-

5

tons.

M 2 ch in e

an d

Hand--6

- 10

tons. Ma chine

and

Ha n

d-11-1

5 t o ns.

Pri ces

p ai d

pe r t o n.

P ri ces

p aid

p er t o

n.

Prices

pa i d p e r t o

n.

Low e

st

indiv

i d u al

High

e st individ

u a l A v erage of gr

oup

.

ind h

1d=

l i Hi g h " t

individ u al

.

! J, o w e

st

ind i v

idu a l

\Hi ghes t i

nd i v

idual

Av erage o f gro u p . ave r age i n

group

. a v e r age in group.

avera

g e m

grou

p .

average

m g r o u p. A v e r ag e o f g r o

up.

ave

r age i n gro u p.

av er ag e i n g r o

up .

£

s. d.

£ d . £

s. d.

£

s. d.

£

d.

I

£

d.

£

s. d.

£

s. d.

£

s. d.

s. s. s.

911

3 8 14 6 10

17

2

9 1 0 6 7 1 8 5 10

1

7 9 15 7 9 4

0

9 14 6

8 2 8 6 8 4

8 13 3 7 1 5 3 6 10 9 9 9

0

7 1 5 5 7

2 8 8

0

8

7 18 3 6 12 6 8

17

10

7 12 3 6 1 4 3

9

1

8 7 1 5

11

7 7 10 8 2 3

7 14 4 6 5 8 8 1 2 3

*

*

7 17 10 6 17 3 9 1 6

9 19

11

9 16

0

10 1 2

0

10 6 2 9

15

6

11

3

4

t t t

8

0

3

7

5 6

I

8

17

1

I

8 6

0

8 6

5 9

0

5

. .

I

. .

..

T ype

a n d T o

nn age .

Semi-Automati

c -11

- 15

tons.

S e m i - A

utomatic

a nd

Au to

m at

ic - 16 t o n s a

nd ov

e r .

I Average d ecla r ed R a n ge of d ail y d

ec l a r e d

Pric

e s p a

id

p e r t o

n.

Price s

pa id

p e r t o n.

pr ice pe r

to n

pri ces

pe r

to n ( le ss b ags

).

( l ess

ba gs

).

Av e r a g e o f g

roup.

Lowest

indi v

idu a l H i g h es t i n d iv i

du a l Average of g

rou p . Low e

st

i. n di

v i dua

ll H i g h e

st

ave r a g e in g

rou

p . a v e r age i n gr

ou p .

ave

r ag e

m g r o u p .

averag

e

m group

.

From.

To .

£ 9

s. d.

£

s. d.

£

s. d.

£

s. d.

2 10 8

3

4

911

4 9 9 8

. .

. .

. . . . . .

. . .

.

6 17

0

. .

. .

. . .

.

. .

. .

. .

..

. .

. . .

. .

.

•

Machine

and

Hand

6-10

tons

and

11-15

tons

combined.

t

Ma c hin

e

and

b a nd

11-15

tons

and

over 16

tons

combined.

;

Includes

State

Flour

Tax

at

£1 lOs.

per

ton.

£

s. d.

£

s.

9 3 2 9 15

6 9 10 7 8

. .

..

. . .

.

. . . . . .

. .

d.

£

s. d.

£

s. d.

£

s. d.

4

t9

13 4

t9

1 4

t10

6 4

6 8

0

3 7 3 11 9 1 5

7 17

11

7 1 1 8 16 1

8 1 2 7 7 3 8 17 3

10 4

5

9

3

7 11 8 1

8 16 3 8 9

0

9 9

0

Ot

57

195. Apart from any failure of members of the flour-millers' associations to adhere to the declared prices, there are other millers, not members of the organizations, who effect sales at lower than the fixed prices. In addition, certain millers financially interested in bakery businesses appear to a1low them special rebates, or price concessions, in one form or another. These may take a direct form or be allowed through a cancellation of outstanding past indebtedness. On the other hand, some bakers are financially interested in flour mills and are able to obtain their supplies of flour at lower than the declared market price.

196. In addition to the usual trade and cash discounts, there are other rebates and forms of concessions which directly or indirectly lead to a reduction in the flour price. Although not illegal, son1e of these allowances or price adjustments appear to be in contravention of the agreed policy of the :Millowners' Association. Allowances are also made to the baker on the return of empty flour bags.

197. It is consequently necessary that all these rebates, concessions and allowances should be taken into consideration when computing the flour cost for the purposes of determining a .fair and reasonable price of a loaf of bread to the consumer.

198. In view of all the ciroumstances to which reference has already been made and, owing to the many and marked variations in the prices actually paid by bakers for their flour, the Commission decided, for comparative cost purposes, to include flour at a uniform price when computing the costs.

199. Assun1ing the price of flour at £11 per ton net (i.e., after deducting the value of the bags) and that 1330 2-lb. saleable loaves are obtained from one ton of flour, the cost of the flour content in an ordinary 2-lb. loaf is l.98d. Any alterations in the price of flour to the extent of 27s. 6d. per ton represents 0. 25d. in the cost of a 2-lb. loaf. In paragraph 186 will be found a table which shows the fractional charges in the cost of a 2-lb. loaf with flour at different prices, and with varying numbers of loaves obtained from a ton of flour.

200. A further investigation into the prices paid by bakers in Sydney for flour during the period July, 1934, to June, 1935, confirmed these facts. The flour invoices for 27 bakers for the whole year were examined and it was found that-Two had obtained their flour at an average price per ton of £1 or more below the

declared price ; Twelve had obtained their flour at an average price per ton over lOs. and less than £1 below the declared price ; Eleven had obtained their flour at an average price per ton over 5s. and less than

1 Os. below the declared price ; Two obtained their flour at an average price per ton under 5s. of the declared pnce.

201. A further point brought out by the data of Table 36 is that, in general, the larger bakery businesses obtain their flour at lower average prices than the smaller.

202. In the event of the adoption of a fixed home consumption price for wheat in Australia, the declared price of flour would be stable within narrow limits. This would eliminate speculation in flour by bakers and would leave discounts and special contracts or arrangements as the only causes for differences between individual bakers in this factor in the cost of bread.

58

(i v) THE AvERAGE C osT OF THE 2-LB. LoAF IN THE METROPOLITAN

203. The costs of producing a saleable 2-lb. loaf of

TABLE

SHOWING-( a) THE TOTAL EXPENDITURE OF THE I NVESTIGATED BAKERIES IN THE METROPOLITAN (b ) OTHER CHARGES, I NCLUDING RENTS, RATES AND TAXES (EXCEPT I NCOME TAX) AND

(c) THEIR AVERAGE COSTS PER TON OF FLOUR USED AND PER 2-LB. SALEABLE LOAF

State. Sydney. Melbourne.

N urn ber of bakeries . . . . .. .. . . 73 49

Tonnage of flo ur used .. .. .. .. . . 42147 . 73 2611 8.41

Cost Items. E xpendi· Cost per Cost per Expendi- Cost per Cost per

ture. ton. loaf . ture. ton. loaf.

£ £ 8. d. d. £ £ 8 . d. d.

P RODUCTION .

1. Salaries and wages . . . . .. .. . . 118,686 2 16 4 .508 71,000 2 14 4 .490

2. :Materials (ot her t han flour) .. .. .. .. 44,583 1 1 2 .191 30,914 1 3 8 .214

3. F uel .. .. .. .. .. . . 24,339 011 7 . 104 11 ,336 0 8 8 .078

4. Power and light .. .. .. .. .. 4,286 0 2 0 . 018 2, 187 0 1 8 .015

5. Repairs an d maintenance bakery and plant .. .. 13,998 0 6 8 . 060 4,754 0 3 8 .033

6. Insuran ce .. .. .. .. . . 3,244 0 1 6 . 014 1,296 0 1 0 . 009

7. D epreciation bakery plant and ovens .. . . .. 10, 296 0 411 .044 4,788 0 3 8 . 034

8. Other production co st s .. .. . . . . 848 0 0 5 . 004 295 0 0 3 . 002

9. P roduction costs (except fl our) .. .. . . 220,280 5 4 7 . 943 126,570 4 16 11 . 875

DISTRIBUTION .

10. Salaries and wages .. . . .. .. . . 202, 135 4 15 11 . 865 106,61 7 4 1 8 .736

11. Hor se and stable expenditure . . .. .. . . 33,361 0 15 10 .143 20,754 0 15 11 .144

12. Mot or expenses .. .. .. .. . . 32,351 0 15 4 . 139 5,274 0 4 0 . 036

13. Power and light .. .. . . .. .. 229 0 0 1 . 001 331 0 0 3 .002

14. Insurance (except on hor se-drawn and motor vehicles) .. 2,850 0 1 4 . 01 2 1,068 0 0 10 . 007

15. D epreciation-Vehicles, &c. .. .. .. . . 9,581 0 4 7 . 041 4, 134 0 3 2 . 029

16. Ot her distribution costs .. .. . . . . 2,559 0 1 3 . 011 434 0 0 4 .003

17. Total di stribution cost s .. .. .. .. 283,066 6 14 4 1. 212 138, 61 2 5 6 2 .957

ADMINISTRATION .

18. Salaries and wages .. .. .. .. . . 39,769 0 18 11 . 170 26,401 1 0 3 . 182

19. Direct ors' fees . . .. .. .. . . 1,027 0 0 6 .004 318 0 0 3 .002

20. Print ing ; Stationery ; Telephone ; Travelling ; &c. .. 8,472 0 4 0 . 036 3,238 0 2 6 .023

21. Power andlight . . .. .. .. .. 224 0 0 1 . 001 \ 129 0 0 1 .001

22. Discounts ; Advert ising; Trade Subscriptions ; Audit, &c . 6,329 0 3 0 .027 2, 185 0 1 8 . 015

23. Bank charges . . .. . . .. .. 135 0 0 1 .001 42 . . ..

24. Bad debt s wribten off . . .. . . .. 8,079 0 3 10 . 034 3,567 0 2 9 .025

25. Depreciation- office furnit ure .. . . .. 173 0 0 1 .001 223 0 0 2 . 002

26. Ot her administration costs .. .. .. .. 6,019 0 2 10 .026 1,344 0 1 0 . 009

27. Total administration costs .. .. .. . . 70,227 1 13 4 .300 37,447 1 8 8 . 259

28. T oTAL PRODUCTION, DISTRIBUTI ON AN D ADMINISTRATIO N COSTS (AS ABOVE ) .. .. .. .. 573,573 13 12 3 2 .455 302,629 1111 9 2 . 09 1

OTHER COSTS.

29. Rents, rates and t axes paid (except Income Taxes) and depreciation of buildings . . .. .. .. 18, 106 0 8 7 .078 19,852 0 15 2 .137

30. Interest paid on borrowed money .. .. . . 10,265 0 4 10 . 044 9,883 0 7 7 . 068

31. F lour a t £II per ton (net less bags) . . .. . . 463,625 11 0 0 1.985 287,303 11 0 0 1. 985

32. Total other costs .. .. . . . . .. 491,996 ll 13 5 2 .107 317,038 12 2 9 2.190

33. GRAND TOTAL (ALL COSTS ) .. .. .. .. 1,065,569 25 5 8 4 .562 619,667 23 14 6 4 . 28 1

59

AREAS OF THE MAINLAND STATES AND IN THE STATE OF TASMANIA.

bread as at 30th June, 1935, are displayed in Table 37 .

37 .

AREA IN EACH STATE (IN TASMANIA FOR THE WHOLE STATE) ; FLOUR at £11 PER T

Adelaide. Perth.

I

Brisbane.

28 26 30

8,592 6156 . 5 10, 109

Expend!· Cost per Cost per Expendi- Cost per Cost per E xpend i- Cost per

ture. ton. loaf. ture. ton. loaf. ture. ton.

£ £ 8 . d. d. £ .£ 8. d. d. £ £ 8. d.

25,140 2 18 6 .528 22,292 3 12 5 . 653 39,548 3 18 3

8,618 1 0 1 . 181 6,840 1 2 3 .200 9,908 0 19 7

3,158 0 7 4 .066 2, 126 0 611 .062 3, 635 0 7 2

939 0 2 2 .020 459 0 1 6 . 014 1,193 0 2 5

749 0 1 9 . 016 735 0 2 5 . 022 1,472 0 211

493 0 1 2 .010 422 0 1 4 .012 710 0 1 5

1,009 0 2 4 .021 705 0 2 3 . 021 1,640 0 3 3

80 0 0 3 .002 60 0 0 2 .002 183 0 0 4

40,186 4 13 7 .844 33,639 5 9 3 . 986 58,289 5 15 4

31,929 3 14 4 .670 28,908 4 13 11 .847 44,212 4 7 6

6,103 0 14 3 . 128 5,096 0 16 7 .149 7,453 0 14 9

3,140 0 7 4 .067 4,225 0 13 9 .124 9,344 0 18 6

108 0 0 3 .002 32 0 0 1 .001 28 0 0 1

462 0 1 1 . 010 332 0 1 1 .010 336 0 0 8

1,153 0 2 8 .024 1,728 0 5 7 . 051 2,487 0 4 11

159 0 0 4 .003 81 0 0 3 .002 239 0 0 5

43,054 5 0 3 . 904 40,402 6 11 3 1 . 184 64,099 6 6 10

7,289 0 17 0 . 154 4,457 0 14 6 .131 10,011 0 19 9

.. .. . . .. .. . . 665 0 1 4

870 0 2 0 .018 1,291 0 4 3 . 037 1,511 0 3 0

67 0 0 2 .001 18 0 0 1 .001 24 0 0 1

382 0 0 10 .008 963 0 3 1 . 028 1,332 0 2 8

24 0 0 1 .. 5 .. .. 67 0 0 2

183 0 0 5 .004 121 0 0 5 . 004 1,134 0 2 3

45 0 0 1 .001 9 . . .. 6 . .

332 0 0 9 .007 138 0 0 5 . 004 862 0 1 8

9,192 1 1 4 . 193 7,002 1 2 9 .205 15,612 1 10 11

92,432 10 15 2 1.941 81,043 13 3 3 2.375 138,000 13 13 1

4,098 0 9 6 . 086 4,201 0 13 8 .123 7,261 0 14 4

670 0 1 7 .014 978 0 3 2 .029 806 0 1 7

94-,512 11 0 0 1. 985 67 ,71 2 11 0 0 1. 985 111,199 11 0 0

- --

99,280 1 1111 1 2.085 72,891 11 16 10 2. 137 11 9,266 11 15 11

- - .

191,712 : 22 6 3 4.026 153,934 25 0 1 4 . 512 257,266 25 9 0

__ ___ __ \ __

Cos t per loaf.

d.

.698 . 17 5 . 004 . 021

.025 . 013 . 028 .003

1. 027

. 780 . 132 .165 . 000 .006 .044 . 004

1. 13 1

.177 .012 .026 . 001 .024 .001 . 020 ..

. 015

. 276

2 . 43 4

. 129 .015 1. 96 3

2 . 107

4.541

Tasmani a.

29

4,279 . 8

Expendi- Cost per l Cost per

ture. ton. loaf.

----

£ £ 8 . d. d.

15,13 5 3 10 9 .629

4,01 5 0 18 9 . 167

2,077 0 9 9 .086

410 0 1 11 .017

556 0 2 7 .023

247 0 1 2 . 010

504 0 2 4 .021

78 0 0 4 .003

23,022 5 7 7 . 956

12,871 3 0 2 .535

2,786 0 13 0 . 116

1,039 0 4 10 .043

71 0 0 4 . 003

55 0 0 3 . 002

640 0 3 0 .027

180 0 0 10 . 007

17,642 4 2 5 . 733

1,996 0 9 4 . 083

20 0 0 1 .001

679 0 3 2 . 029

33 0 0 2 .001

244 0 1 2 .010

23 0 0 1 . 001

511 0 2 5 .021

23 0 0 1 . 001

128 0 0 8 . 005

3,657 0 17 2 .152

44, 321 10 7 2 1. 841

3,606 0 16 10 . 149

356 0 1 8 .015

47,07 8 11 0 0 1 . 95 6

51,040 ll 18 6 2. 120

95,3 61 22 5 8 3 .961

60

204. For the purposes of ready comparison the following summary of the costs under the various sub-heads has been extracted from Table 37 :--TABLE :58.

COMPARISON OF COSTS IN PENCE PER 2 LB. SALEABLE LOAF.

- Sydney. Melbourne. Adelaide. Perth. Brisbane. Tasmania.

Number of Bakeries 0 0 73 49 28 26 30 29

d. d. d. d. d. d.

Production 0 0 0 0 0.943 0.875 0.844 0.986 1.027 0.956

Distribution .. . . 1.212 0.957 0.904 1.184 1.131 0.733

Administration .. • 0 0.300 0.259 0.193 0.205 0.276 0.152

Other Costs • 0 0. 2.107 2.190 2.085 2.137 2.107 2.120

Total .. . . 4.562 4.281 4.026 4.512 4.541 3.961

I

205. The variations disclosed as between one area and another illustrate the nature and extent to which the conditions existing in the different centres affect the operations of this industry. Fig. II. shows the same data in graphic form.

206. Reference to Table 37 shows that the rrwst important items making up the costs are flour and salaries and wages. The price of flour has already been considered in sub-section v. (b) (iii).

207. Table 39 shows the relation which the combined item of salaries and wages bears to other items in each cost subdivision :-TABLE 39.

Costs in pence per 2 lb. saleable loaf, 30th June, 1935.

-

Sydney. Melbourne. Adelaide. Perth. Brisbane. Tasmania.

Production-(a) Salaries and wages . . .. .508 .490 .528 .653 .698 .629

(b) Other production costs (except flour) .. . . . . .435 .385 .316 .333 .329 .327

.943 .875 .844 .986 1.027 .956

Distribution- I

( o) Salaries and wages .. . . .865 .736 .670 .847 .780 .535

(d) Other distribution costs .. .347 .221 .234 .337 .351 .198

1.212 .957 .904 1.184 1.131 .733

Administration-(e) Salaries and wages and directors' fees 0. . . • 0 .174 .184 .154 .131 .189 .084

(f) Other administration costs .. .126 ·.075 .039 .074 .087 .068

.300 .259 .193 .205 .276 .152

Total salaries and wages costs (Items (a) (c) and (e) 0 0 0 0 0 0 1,547 1.410 1.352 1.631 1.667 1.248

Other costs (Items (b) (d) and (f) 0 0 .908 .681 .589 .744 .767 .593

Total 0. 0 . 0 0 2.455 2.091 1.941 2.375 2.434 1.841

208. These figures show that with .the exception of flour, labour is the largest single item in a baker's costs ; further that in all cases except Tasmania, it costs more to deliver a loaf than it does to make and bake it.

209. The extent to which mechanization within the bakehouse affects the output per employee, and consequently the labour cost per loaf, is shown in Table 40.

61 - 62

FIG. I I. Sf-10\/\111\/G PER

L? LB LOAF" /IV THe ME"TK'O,POL/7/41\/ OrTJ-1£" !WA/NLA/\10 sz;=q-rc-S

/1\/ A/

/.935-:

II PRooucT/ON cosTs (EXCEPTING FLOoR) cosr oF FL.ovR II 0/STR/8<.///0N COSTS D OTH£"R COSTS

COSTS

P£NC£ PENC.C

PER P.t:R

ZLB.L.OAF 2L.8.LOAF

.90 r------------------------, $0

4·s 4·5

¢4 44

4 · 2 4·2

4·1 4·/

40 3·9 3·9

3·8 3·8

8·7 3 ·7

36

S·S 3·5

2·0

/·0 /·0

0

SYON£Y AOELA/0£ B.R/S.BANe

MELBOGRNE PERTH

NOTES:---. /. FLOUR /S HERE -,;;.qK£N ,.....qr £/!·0 · 0 PER

SHORT /ON e. Y7£LO OF L0,..4V£S PER TON or FLOUR IS .,.....qs -DISCVSSEO IN SE:CT/ON V, B. (//.)

63

TABLE 40.

SHOWING THE QUANTITY OF FLOUR HANDLED WEEKLY PER BAKEHOUSE OPERATIVE EMPLOYED IN THE BUSINESSES INVESTIGATED BY THE COMMISSION.

' Group. Sydney. Melbourne. Adelaide. Perth. Brisbane. Tasmania.

Tons Tons Tons Tons Tons Tons

Hand- per week. per week. per week. per week. per week. per week.

1-5 tons .. . . . . 1.019 1.019 0.990 1.037 0.987 0.861

Machine and Hand-1-5 tons .. . . . . 1.186 1.141 1.102 1.128 1.010 1.015

6-10 tons .. . . . . 1.321 1.391 1.199 1.421 1.158 1.212

11-15 tons .. . . .. 1.565 1.564 . . 1.497 1 .. 379 . .

Over 15 tons .. . . .. 1.553 1.653 1.405 . . 1.121 . .

Semi-automatic-11-15 tons .. . . . . 1.703 . . . . . . . . . .

Semi-automatic and automatic-Over 15 tons .. . . . . 2.080 1.714 . . . . . . . .

210. The weekly tonnage handled per operative increases steadily with the volume of the weekly output and with the degree of mechanization. In considering these figures it is necessary to remember that the extent to which machinery has been installed in the "Machine and Hand " sub-groups varies very considerably.

211. The items "Horse and stable expenditure" and "Motor expenses" under the sub-heading Distribution are complementary. The difference in costs between .139d. per 2-lb. loaf for motor in Sydney and . 036d. in Melbourne is due largely to the more

general use of motors for bread deliveries in the former city. By combining horse and stable expenses, motor expenses and depreciation of horse-drawn and motor vehicles , the grouped figures per saleable 2-lb. loaf are :-Sydney . 323d., l\1elbourne . 209d., Perth . 324d., Adelaide .219d., Brisbane .341d. and Tasmania .186d. These differences may be attributable to a

number of causes, prominent among which are the nature of the terrain over which delivery has to be effected and the hours of starting work. 212. Sundry Iiems.-Table 37 shows in detail a number and variety of other items of expense, namely, fuel, power and light, insurance, bank charges , printing, stationery, advertising

and discounts. In the main , these charges are relatively uniform in most of the metropolitan areas and do not call for special comment, being ordinary recurring items of cost essential to most types of business. 213. Other Costs.-The next items for consideration are those which are consequent upon

the capital invested in the business. The matter is somewhat complicated as some bakers own the land and buildings used for their bakery business, whilst others rent the whole or part thereof. Those in the former group pay local rates and taxes, whilst in the latter these charges are sometimes included in the rent. In the same way depreciation of buildings is borne directly

by those owning their properties, while in the case of lessees this item is really provided for in the In view of these complications, the Commission has grouped rent, rates and taxes (except income tax) and depreciation on buildings in the Cost Tables. · 214. Table 41 shows, in respect of those bakeries whose financial affairs were investigated

by the Commission :-(a) the number who use rented premises; (b) the number who own the premises in which their bakery op erations are conducted ; and (c) the number who own portion of the premises.

TABLE 41.

- Rented premises. Own premises. Partly-owned premises . Total.

Sydney . . . . .. 26 44 3 73

Melbourne . . .. .. 17 22 10 49

Adelaide . . .. . . 7 19 2 28

Perth . . . . .. 6 19 1 26

Brisbane . . . . .. 8 21 1 30

Tasmania . . . . .. 11 16 2 29

Total .. . . 75 141 19 235

215. As mentioned in paragraph 167 the item " Interest on borrowed money " represents solely the interest charges on money which was employed in the busin ess by way of mortgages, loans, advances and bank overdrafts. 216. So far the average costs in each metropolitan area have been discussed as a whole.

The next line of inquiry concerns the way in which costs vary in bakeries when they are grouped according to size and degree of mechanization. _ 217. The range of variation of costs of the individual bakers investigated by the Commission is shown in Table 42.

64

TABLE 42.

SHOWING THE RANGE OF INDIVIDUAL BAKERS' COSTS AS AT 30TH JUNE, 1935, IN RESPECT OF THE AVERAGE GROUP COSTS INCLUDED IN TABLE 37. . (Expressed in pence per 2-lb. saleable loaf.)

Group. Sydney. MelJ?ourne. Adelaide. Perth. Brisbane. Tasmania.

-

Hand-1-5 tons .. . . 0. 3.945 3.607 3.799 3.825 . . 3 .616

3.948 3.919 3 .861 4.035 4.288 3. 779

4.417 3 .946 3 .886 4.443 4.365 3.811

4.527 3.963 3.911 4.506 4.454 3.943

4.697 4.004 3.933 4.571 4. 746 3.980

4.944 4.010 4 .359 4.650 5.225 3.999

4.959 4.201 4. 604 4.890 5.367 4.166

5 .188 4.527 .. 5.197 . . 4. 190

. . 4.728 .. 5.548 . . 4.401

. . 4.837 .. . . . . 4.467

.. 5.259 . . . . . . 4.654

.. . . . . . . . . 4.722

. . .. . . . . . . 4.860

. . . . .. . . . . 5.660

Machine and Hand-1- 5 tons 0 . 4.302 3.815 3.634 3.840 3.887 3.201

4.335 4.285 4.022 4.185 4. 007 3.205

4.489 4.322 4.089 4.209 . 4.478 3 .386

4.548 4.596 4.202 4.402 4.520 3 .407

4.588 4.798 4.214 4.403 4.737 3 .528

4.593 4.869 4.243 4.548 4.922 3.678

4.599 4. 987 4.380 4.732 5.548 3.729

4.674 5.242 .. 4.760 . . 4 .354

4.791 .. 4.465 4.949 . . 4.437

4 .920 . . 4.479 .. . . 4.748

. . . . 4.533 . . . . ..

5 .048 . . 4.616 . . .. 4. 842

5.141 . . 4.727 .. . . ..

5.184 . . .. . . . . . .

5.974 . . . . . . . . ..

Machine and Hand-6-10 tons .. 3.788 3.772 3.213 4.139 3. 898 3 .017

. . . . . . 4.307 . . ..

3.940 4. 170 3.522 4.335 4.125 3.976

4.183 4.171 3.745 4.521 4.181 4.141

4.278 4.209 3.978 4.616 4.424 4.403

4.393 4.279 4.224 4.741 4.441 ..

4.396 4.292 4.227 4.745 4. 452 ..

4.402 4.335 .. 5. 262 4.503 . .

4.476 (2) 4.387 .. .. 4.650 . .

. . 4.425 .. . . 4.778 . .

4.488 4.429 .. . . 4.916 . .

4.521 4.494 .. . . 4.978 . .

4.531 4.564 . . . . 5.163 . .

4.558 4.595 .. .. 5.442 • 0

4.753 4.656 .. . . . . . .

4.850 5.037 .. . . . . . .

4.899 . . .. . . . . . .

4.933 . . .. . . . . . .

4 .938 . . .. . . . . . .

4.964 . . .. . . . . . .

4.975 . . .. . . . . . .

5.066· . . .. . . . . . .

5.102 . . .. . . . . . .

I

Machine and Hand-11-15 tons 4.350 4.142 .. * t . . . .

4.374 4.252 .. . . . . . .

4.377 4.365 .. . . .. . .

4.381 4.390 .. . . . . . .

4.497 4.909 .. . . .. . .

4.532 . . . . . . . . . .

4.729 . . . . . . .. . .

4.832 . . . . .. . . . .

4 .955 . . . . . . .. . .

218. The degree of uniformity in costs is somewhat remarkable in view of the fact that the survey includes on the on e hand some bakeries with a large percentage of wholesale trade and low delivery costs and on the other certain firms with a high proportion of more or less specialized business in better class suburbs.

65

TABLE 42--continued.

Group. Sydney. Melbourne. Adelaide. Perth. Brisbane. Taamanla.

Machine and Hand-Over 15 tons .. 4.452 3.657 3.727 . . 4 .071 ..

4.491 4.132 4.113 .. 4.589 ..

4 .517 4.304 4.243 .. 4.755 . .

4.569 4.481 . . . . . . l ..

4.603 4 . 636 . . . . i .. I . . 'f 4 . 656 . . . . . . i . . ! .. 4 . 706 I I .. . . . . . .

I

. .

4.940 .. . . . . . . . .

5.041 .. . . . . . . . .

Semi-Automatic-11-15 tons .. 4 .377 . . . . . . . . . .

4.438 . . . . . . . . . .

4.445 .. . . . . . . . .

4.818 . . . . . . . . ..

Semi-Automatic and Automatic- 3 . 945 3 .729 . . . . .. . .

Over 15 tons 4 . 287 3 .890 . . .. . . ..

4.556 4.185 . . . . .. . .

4 .,700 4.272 .. . . . . ..

4.733 4.623 . . . . . . ..

* Included in Machine and Hand-6-10 tons. t Included in Machine and Hand-Over 15 tons. N.B.-The total number of businesses represented in the above list is 232. The discrepancy between this and the total shown in other tables (235) is due to the fact that one large firm operating three units is here costed as a whole, and in one other case the disclosure of the figures might have been unfair to the proprietor concerned.

219. Table 43 shows the costs per 2 lb . loaf of 117 bakeries (in both Hand and Machine, and Hand groups) using from one to five tons of flour per week. In considering individual items of cost in this subdivision, it is necessary to emphasize that the number of bakeries included in some of the groups is not large and, consequently, minor differences between individual items of

cost are not of such importance as in larger subdivisions. 220. Differences between the labour costs of smaller bakeries in the capital cities, as revealed by an analysis of the figures, do not reflect the appropriate award wages rates as the adjustment of the amount of labour to the work to be perforn1ed is more difficult in the small business than in the larger. /

221. The machine and hand group when compared State by State with the hand group shows a lower production labour cost per loaf ; this follows from the partial 1nechanization of the first-mentioned type of bakery. 222. The cost of 1naterials other than flour does not afford a very useful basis of comparison,

because the practice followed by individual bakers in the n1ixing of the dough varies ,videly, some preferring to add quantities of ingredients such as dried milk and prepared improvers, while others use nothing but yeast and salt with perhaps a simple improver. 223 . Table 44 shows the same segregation of costs for the larger bakery businesses. The

Commission regrets that it is unable to publish the figures for some groups individually owing to the confidential nature of the information. 224. In order to facilitate comparisons within groups and between cities, Table 45 has been prepared. An examination of its component figures suggests that the following general principles

apply:-(a) Production costs (excluding flour) decrease as the size of the bakery increases ; the difference between Machine and Hand 1- 5 ton bakeries (Table 43) and 16 ton bakeries (Table 44) is approximately 0 .1d. per 2 lb. loaf. (b) Distribution costs are somewhat variable because some of the larger businesses

concentrate on wholesale trade as a matter of policy and, consequently, much less cost is involved in distribution. There are, however, exceptions (see (/) below) . (c) Costs of administration are higher in the larger businesses . This is explained

by two facts : .

(i) that there is little administrative charge in the smaller units where the baker often works in the bakehouse and also runs his office and keeps very few books ; ( ii) in the larger businesses high er costs for salaries and wages are incurred

in the administrative section owin g to the greater detail work, wider administrative supervision and responsibility involved.

TABLE

43.

TABLE

SHOWING

THE ANALYSIS

OF

THE

COST

PER

2-LB. SALEABLE

LOAF

OF

CERTAIN

OF

THE

BAKERIES INCLUDED

IN

TABLE

37 HANDLING

FROM

ONE ·TO

FIVE

TONES

OF

FLOUR

WEEKLY.

I

Hand-1

to

5 Tons. Machine

and

Hand-

1

to

5 Tons.

-

Sydney. Melbourn e .

I Adelaide .

I

Perth.

Brisbane .

Tas

m ania.

Sydn

e y.

M e lbourne.

I

Adelaide.

Perth.

Brisbane.

Tasmania.

c

I

Numb

e r of

bakeries

. . . . . . . . . . . . . . . .

8 11 7

9

7 14 14 8

I

12

9

7

11

Tonnage

flour

used

annually

. . . . . . . . . . . . . .

1,068

1,502.25

537 1,026

77 5

1,232.5

3,063

1,732.6

1,97 9 1,

575.5

1 ,233

1,599.3

A.

PRODUCTION

(except

flour).

d.

d.

d.

d. d. d.

I

d.

d. d. d. d. d.

l.

Salaries

and

wages . . . . . . . . . . . . . . .

660

. 740 . 759 . 692 . 7

57

. 695

I

. 656 .

652 . 635 .

702

. 719 . 626

2. Mater

i a l s

(other

than

flour)

..

. .

.. .. .. ..

. 244 .177 .

206

.161

.176

.146 .153

.166

j

. 246

.152

. 13 5 . 205

3.

Fuel

.. ..

..

.. .. .. .. .. ..

.094 .094

. 086

.074

.072

. 105

I

.10 8

.077

.079

.064

.081

. 0 92

4. Power

and

li g ht

. . . . . . . . . . . . . . . . .

015

. 015

. 015

. 012

. 029

. 023 .

011

. 022

. 020

. Oll

. 027

. 017

5 . Repairs

and

maintenance

of

plant

and

machinery

. . . . . . . . .

037

. 012

. 021 .

019

. 009

. 027

1 •

028

1

. 016

. 024

. 017

. 012

. 03-1

6 . Insur

a n ce . . . . . . . . . . . . . . . . .

009

. 007

. 005

. 016

. 010

. 005

I

. 010

I

.

015

. 013

. OlO

. 010

. 009

7. Depreciation

. . . . . . . . . . . . . . . .

.018

.008 .012 .013 .013 .012

.024

. 024 . 025

.015 .025

.0 26

8. Other

production

costs . . . . . . . . . . . . . . . .

.002

. .

.006

.014

. 006

.004

.003

.00 2

. .

I

.001

9.TOT

A LPROD U

CTIONCosTs(exceptflour)

..

.. .. ..

..

1.077

1.055

1. 104

1

.993

!

1.080

1.023

.996

1

.9 76

I

1.045

.973

1.009

1.010

. B.

DISTRIBUTION.

..,

.

I

I _

r

I

10 .

Salanesandwages

. .

.. ..

..

.. .. ..

.81 5 .801

.55 1

.874

I

.6 93

1

.b57 . 861

I

.93U.

1

.726

.818

.749

.480

11.

Hors

e

expenses

..

.. .. ..

.. ..

..

..

. 134

.133

.102

.125

.120

I

.115

.170

.182

I

.136

. 200

. 084

.117

12.

Motor

ex pens

e s . . . . . . . . . . . . . . . .

.114

.027 .067

.190

.113

.079

.110

.042

.038

.096

.229

.018

13.

Power

and

light

. . . . . . . . . . . . . . . .

.003

.002 .002

.001

1

. .

.008

.002

.001

.003

. . . . . .

g;

14.

Insurance

(other

than

horses

and

motors)

. . . . . . . . . .

.007 .003

.004

.007

.00 3

.003 .012

.009

.012

.0 11

.004

.001

15.

Depreciat

ion

on vehicles . . . . . . . . . . . . . .

.046

.024

.039

.080

.026

.043 .044 .036

.024

.052

.066

.023

1 6.

Other

distribution

costs . . . . . . . .

· · · · · ·

. .

.001 . 002 .007

.004

.003

.003

.005

.004

,

.

.003

. 010

17.

TOTAL

DISTRIBUTION

COSTS

..

.. .. ..

..

..

l.

179

· 991 . 767

l.

284 . 959 . 808

l.

202

l.

205

. 943

1.177

1.135

. 649

C. ADMINISTRATION.

1 8 .

Salaries

and

wages

.. .. ..

..

.. .. ..

.059

.079

.094

.036 .067

.050

.146

.

.109

.144

.084

.109

.030

19 .

Dire

ct ors'

fees

..

· ·

..

..

..

.. .. ..

..

..

.. ..

..

..

. .

. 001

..

..

. .

.003

20 .

Printing,stationery,telephonecharges,travellingexpensesandlegalexpenses

..

.040

.032

.017

.040

.025 .033

.040

.026

.027

.054

.032

.025

21.

Power

and

light

.. .. .. .. ..

.. ..

. .

.002

.004

.001

. .

..

.002

.002 .003

.001

..

..

..

22.

Discounts,

advertising,

subscriptions

to

Trade

Protection

Associations,

audit

and

accountancy

fees . . . . . . . . . . . . . .

.014

.007

.002 .035

.013

.007

.022 .017

.009

.025

.020

.Oil

23.

Bank

charges . . . . . . . . . . . . . . . .

.002 .002

.001

. .

.002

.002

.003

. .

.002

. .

.002

..

24.

Bad

debts

written

off . . . . . . . . . . . . . .

.037 .009

. .

.016

.Oil

.039

.076

.024

.006

. .

.020

.Oil

25.

D e preciation

on office

furniture

and

fittings

. . . . . . . . . .

.002

. . . . . . . . . .

.001

.004

.002

. . . .

.002

26.

Other

administration

costs . . . . . . . . . . . .

.024

.005

.001

.004 .010

. .

.028

.021

.005

•

.001

. .

.006

27.

ToTAL

Am.nNISTRATION

CosTs

. . . .

. . . . . . . .

.180

.138 .116

.131

.128

.133

. 318 .

205

.196 .164 .183

. 088

28.

TOTAL

PRODUCTION,

DISTRIBUTION

AND

ADMINISTRATION

COSTS

(as

above)

. .

2.436

2.184

1.987

2.408

2.167

1.964

2.516 2.386 2.184 2.314 2.327

1.747

OTHER

CosTs.

29.

Rents,

rates

and

taxes

paid

(except

Income

Taxes)

and

depreciation

on buildings..

.166 .198 .149

.165

.143

.279

.173

.147

.114

.094

.147

.105

30.

Interest

paid

on borrowed

money

. . . . . . . . . . . .

.042 .037

.003 .036

. .

.028 .058

.084

.007

.020 .029

.014

31.

Flour

at

£11

(net)

per

ton

. . . . . . . . . . . . . .

1.

985

l.

985

1.

985

1.

985

1.

963

1.

956

1.

985

1.

985

1.

985

1.

985

1.

963

1.

956

32.

ToTAL

OTHER

CosTs

.. .. ..

..

.. .. ..

2.193

2.220

2.137

2.186

2.106

2.263 2.216

2.216

2.106

2.099

2.139

2.075

33.

GRAND

TOTAL

(ALL

COSTS)

. . . . . . . . . .

• •

4.629

4.404

4.124 4.594

4.273

4.227

4.

732

4.602

4.290 4.413

4.466

3.822

I

j -

TABLE

SHOVVING

THE

ANALYSIS OF

THE

COSTS

PER

2-LB.

SALEABLE

LOAF

OF

CERTAIN

OF

THE

BAKERIES

INCLUDED

IN

TABLE

37.

HANDLING

OVER

FIVE

TONS OF FLOUR

WEEKLY

.

I

Machin e

and

Hand.

I

M a ch i n e a n d

Ha nd.

Semi-

A utomat.ic.

6-10

To n s

11 - 1 5

To n s

Group

and

Tonnage .

6

to

10 Tons.

11· : 15

Tons.

16 Ton s

and

ove r .

and

11-1

5

and

16 Tons

11-15

T o ns .

16 Tons

and

over.

T o n

s.

and

O v er.

Sydney. Melbourn e . Adelaide. Bri s bane. Tasmani a . Sydn e y. \

M e lbomne.

Sydn

e y. Melbourne. Adel a ide.

P ert

h.

B ri sb an e .

Sydn

e y. Syd n ey

I

-----

i I

Nu m b e r

of

b a . ke

ri es c o s

ted

..

..

. .

22

1 5 6

13

4

91

5

ll

5

3

8

3

4

5 5

To n n

age

o f fl

o ur

u s e d

annu

a lly

..

..

. .

9,148 5,588 2,238 4,836 1,448 515.1 2,992. 5 14,879 4,883 3,

83 8

3,5 5 51

3,26 5 2,801.

73

6,037 9,420

,

----

-----

----

A: P

RO D

UC TJON

(ex c ept

flour).

d. d.

d.

d.

d.

d .

d. d. d.

d.

d.

d .

d.

d .

d.

l.

S a l a ri e s a n d

wage

s

..

..

. .

. .

.587 .532 .446 . 7 4 2 .575 .553

.480

.469 .406 .488

.621

I

. 610 .469 .363

.444

2. M a t

er i a l s

(o ther

th a n flour)

.. . .

. .

.163 .188 .189 .173 .

142

.201

.162 .193 .

233

.1 39

. 234 .193 .230 .211

.250

3. Fu

el

. . .. . .

. .

..

. 099 .081

.0 58

.06 2

.0 64

.104 •

.067

.105 .067 .062

.oss

I

.061 .091

.117

.084

4 .

Po w

er

a n d li g

ht

.. . .

..

..

.018 .014 .016 .021

. 013 . 020 .014 .020 .024 .022 . 015

.017

. 009

.021

.Oll

5. Rep

a i rs

, & c ., t o b a k e

house

plant

.. ..

.052

.034 .016 .024 . 008 .0

60

.033

.074 .052

.Oll

.0 2 4

I

.038

.044 . 065

.028

6. In

sur a n c e

..

..

. .

..

..

.012 .007 .010 .014

.016

.015 .008

.015

.009

I

.010

. 012

.O ll

.01 4

.017

.009

7. D ep r ec i a t i

on on

p l a nt,

m a chinery,

&c. . .

..

.0 29

.026 .0 24

.021

.023

.035

.012

.0 5 4

.023 . 019 .02 5

.0 4 6

.043

.066

.0 54

8. O t h e r

pr od

u c t io n

cost

s

..

.. ..

.0 05

.001

I

. 004 .00 2

. .

.002

. .

.001 .002

..

.0 0 1 .004

..

.010 .003

- - - -

- - -

9 . PRO

D UC

T I O N C osTS

( excep

t flour)

.965

.883 .763

1.059

. 8 41

. 990

.776 .931 . 816

I

.7 5 1

.9 90

.98 0 .900 . 870

. 88 3

..

..

--

---

---

-·---

- -

B .

D I S

TRI

BUT

ION.

10.

S a l ar

i e s a n d

wa g e s

..

..

..

. .

.823

.819 .528 .7

67

.576 .852 .879

.992

.685 .7 4 2 .

85 3 .

773

.674 .623

1 1 .

Hor

se ex

p e n ses

..

. .

. .

..

.177 .150 .099

.14 1 .116

.llO

.164

.155 .172 .1 4 4

. 1 3 4

.138 .126

.0 85

.ll2

1 2 .

1\i o to

r

expe

n ses

..

. .

..

. .

. 089

.0 29

. 050 .

19 8 .040

.llO

. 044

.165

.024

.08 9

. 117

.105

. 088 .215

. 045

1 3.

P owe r

a nd

l i g ht

. . . .

. .

..

.00 1 .00 4 .

001

.. ..

.001 .

002

..

.003

.0 0 3 . 0

01

..

. . .

.

.001

1 4.

I n sur

a . nce

( e xcept

on ho r s e s a

nd mot

or s)

..

. 012

.007

. 00 6 .006 .002

.01 2

.0 06

. 013 .005 .0 1 2 .01 0 .008 . 013 .012 .010

1 5.

D ep r e c i

at i o n o n

veh

i c l e s

. . .

.

..

. 034

.027

. 027

.05 4 .

018

.032

. 026 .053 .029

.0 21

. 0 4-2

. 025 .024 .03 6

.030

1 6 .

Othe

r

d i s t

ribu

t i o n c o

st s

..

. . ..

. .

.002

.009 . 004 .009 .

001

.001 .025

..

. .

.002 . 005

. 015

.0 07

.00 6

----

- -

--

----

- - -

--

----

--

--

----

-

1 7.

T o T

AL

D I S'l'RIBUT

I ON

Cos T s

.. . .

. .

1.136

1.038

. 720

1 . 170

.7 61

1.118 1.122

1. 4 03

.91

8

l.O ll

1.15

9 1.114 1 . 039 1 . 029

.8 2 7

- -

---

----

----

----

C . ADMI

N I S TR

A T I

ON .

1 8.

Sn. l a

ri e s

a nd

w ag

es

. .

. .

..

..

. 1 9 7 .175

.190

.18 5

.16 9

.199

.227

. 113

-208 .14 5

.1 7 8

.217 .2

51

. 2 10 .190

1 9 .

Dire

c to r s ' f e e s

..

..

. .

..

. .

. . .

.

.. . .

.OlO

. 0 0 7

. .

. .

. .

. 0 3 6

.0 13

. 007 .003

20.

Pr int

i ng ,

St a t io n e r y , &c.

.. . .

..

. 0 2 5

.0 21

.021

.0 25

.0 28 .029 .017 . 0 3

·1:

. 020

.OJ . 2

. 030 .029 .044

.0 58

.023

2

1. P o w e r

a nd

li g ht

. . . .

..

. .

.00 2

. .

.001

. .

.00 2 . 0

02

.. ..

. .

. 002 .00 1

. .

..

. .

. .

22.

D i sco u n t s ,

Adve

rt i s ing ,

&c .

. . . .

..

. 0 28

.010 .003

.0 2 1 .

01 2

.020 . 010 .01 5 . 016

. O il

.0 27

.030 . 043 .049 .

021

23 .

B a n k

c h a r ges

.

. . . .

.

..

.001

..

. .

.002

. .

..

..

. .

.. . . ..

. .

. .

.001

. .

24.

Ba . d

cl o b

ts

w r itt

e n off

. .

..

..

. 034

.037

.0 10

.021 .018

.0 44 . 036 .03 2

.0 25

..

. 0 02

. 0 2 0 . 003

.0 2 6

.017

2G .

D eprec i

at ion

- office f

urnit

ur e

an d

fitt ing s

..

..

.00 2 .001

. . ..

. 001

.001

..

. 0 01

. 0 0 1 .001

..

.00 3 .001 . 0

02

26 .

Oth

e r ad

mi n i s

tr a t i o n c o

st s

..

. .

..

.02 4

.00 9 .0 0 3 .

012

.00 8

.0 28

.01 2 .0

28

.01 2

.Oll

. 006

. 027

.0 18

. 024 .006

2 7 .

T O TAL

A D M I N I

ST R A

TION

CO S TS

..

..

.3ll

. 254 .2 2 9

. 26 6

.23 7 . 323 . 3 1 3 .2 4 9 . 28 2 .1 82 . 245

.3 5 9 .375 .376 .262

- - -

- -

--

-

28 .

T O TA

L

PROD

U C TI

O N ,

DI S TRIBU

TI O N

AN D

AD J\

II N IS

'rR.A

T I ON

Co s

Ts

( a s

ab o

ve ) . .

..

2.41 2 2.175

l.

71 2

2. 49

5 1 . 8

39

2 , 431

2.211

2 . 5 8 3 2 .

01 6

1 . 944 2 . 3 9 4

2.453 ' 2.314

2.27

5 1.972

O niE

R C

os T s .

29 .

Rent

s , r a t e s a . n d

ta xe s p a id ( exce

pt

in c ome

ta x es)

a

nd d e

pr ec i a

tion

o n buil

di n g s

. .

..

.1 31

.139

.0 66

.1 2 2

.091

.128 .133 .1 5 6 .11 2

.074

. 124 .127 .171 .139 .1 3 8

3 0.

I nte

r est

pa i d

on b o r rowe d m o

ney

..

..

.0 32 .086 .007

.Oll

.009 . 015

.067

.049 .109 . 0

25

.0 3 0

.017

.042 .068 . 0 4 1

31.

F l o

ur

a t

£ 11

( n e t ) pe r t o n

..

. .

. .

1.9 8 5 1.985 1.985

1.9 6 3 1 .

95 6 1 . 985 1 . 9 8 5 1 . 9

85

1 . 98

5 1 . 9

85

1. 985 1 .

963

1 . 985

1.98

5

1. 9 8 5

3 2 .

T O T A L

OTH

ER

COSTS

.. ..

. .

2.148

2.210

2 . 058

2.0 9 6

I

2 . 056 2 . 128 2 .

185

2 . 190

2 . 206 2 . 0 8 4 2 .

139

2.107 2.198 2 .

19 2 2.164

3 3 .

GR AN

D T O T

AL

(ALL

OOSTS)

..

..

..

4.560

I

4 . 385

3.770

4.591

I

3.895

4.559 4 396 4 .

773

4 . 222

I

4.028

I

4 . 533

4 . 5 6 0

4.512 4.467 4.136

.....:}

68

TABLE 45.

SUMMARIZING RESULTS OF MAI N ANALYSES OF COSTS PER 2-LB. LOAF OF BAKERIES WHEN SEGRE GATE D ACCORDING TO CLASSES WITHIN THE AREAS.

Group and Tonnage . Sydney. Melbourne. .Adelaide. Perth. Brisbane. Tasmania.

A. P R ODUCTION (except fl our). Hand-1-5 t ons . . . . . . 1.077 1.055 1.104 .993 1.080 1.023

Machine and Hand-1-5 tons . . . . . . .996 .976 1.045 .973 1.009 1.010

6-10 tons . . . . .. .965 .883 .7 63 l. .990 1.059 .84J 11- 15 tons . . . . . . .990 .776 .. f } .980 16 tons and over . . .931 .816 .751 .. . . . . . . Semi-automatic- 11-15 t ons . . . . . . .900 . . . . . . . . . . 16 tons and over . . . . .870 .883 . . .. .. . . B. DISTRIBUTION. Hand- 1-5 tons .. . . . . 1.179 .991 . 767 1. 284 .959 .808 Machine and Hand- 1- 5 tons . . .. . . 1.202 1.205 . 943 1.177 1.135 .649 6-10 t ons . . . . .. 1.136 1.038 .720 } 1.159 L. 1.170 .761 11-15 tons . . . . . . l.ll8 1.122 .. 1.114 16 tons and over 1. 403 .918 1.011 f .. . . . . . . Semi-automatic-11-15 tons . . . . . . 1. 039 . . . . . . .. . . 16 tons and over . . . . 1.029 .827 . . .. .. . . C . A DMINISTRATION. Hand- 1-5 t ons . . . . . . .180 .138 .116 .131 .128 .133 Ma chine and Hand- 1-5 tons . . .. . . .318 .205 .196 .164 .183 .088 6-10 tons . . . . . . .311 .254 .229 } .245 .266 .237 11-15 t ons . . . . . . .323 .313 .. } .359 16 tons and over .249 .282 .182 .. . . . . . . Semi-automatic- 11-15 tons . . . . . . :375 .. . . . . .. . . 16 tons and over . . . . . 376 .262 . . . . .. . . D . OTHER CosTs-Hand- 1- 5 t ons . . . . .. 2. 193 2.220 2.137 2.186 2.106 2.263 Machine and Hand- 1-5 tons . . . . . . 2.216 - 2.21 6 2.106 2.099 2.139 2.075 6-1 0 tons . . . . . . 2. 148 2.210 2.058 } 2.139 2.096 2.056 11- 15 tons . . . . . . 2.128 2 .185 .. } 2. 107 16 tons and over 2.190 2.206 2.084 .. . . . . . . Semi-automatic-11- 15 tons . . - . . . . 2. 198 .. . . . . .. . . 16 tons and over . . . . 2.192 2.164 . . . . .. . . E. G RAND T oTAL (A ll costs). Hand- 1- 5 tons . . . . .. 4.629 4.404 4.124 4.594 4.273 4.227 Machine and Hand- 1- 5 t ons . . . . . . 4.732 4. 602 4. 290 4.413 4.466 3.822 6- 10 t ons . . . . . . 4.560 4.385 3.770 L. 4.533 4.591 3.895 11- 15 tons . . . . .. 4.559 4.396 .. f } 4.560 16 tons and over . . 4.773 4.222 4.028 . . . . . . . . Semi-automatic-11-1 5 t ons . . . . . . 4.51 2 . . .. . . .. . . 16 tons and over . . . . . . 4.467 4.136 . . . . . . . . 225. The following more detailed comparisons also emerge :-(d) Generally speaking, costs of a 2-lb. loaf in t he group of bakeries which are operated solely by hand and havea weekly output of 1 to 5 tons are less than the costs in similar sized bakeries which are operated by hand and some machinery. This feature is noticeable in all areas except Perth and Tasmania. In this section of t he· t rade some of the smaller bakeries employ little or no labour outside the baker and his family and in a number of cases the conditions under which manufacture is carried out leave much to be desired. (e) The costs in Sydney in each group of bakeries are usually higher than in the similar group in the other metropolitan areas.

69

(f) In Sydney the highest total costs are shown in the machine and hand-operated group using over 15 tons per week, namely 4. 773d. per 2-lb. loaf, but this is explained by the high distribution costs of this group caused by the policy of its members in covering a large area to obtain customers in order to dispose

of their large output. (g) In Melbourne the lowest costs are shown in the semi-automatic bakeries having an output in excess of 15 tons. The highest costs are displayed for those bakeries with an output of I to 5 tons wee kly, operated by hand with some

machinery.

(h) The Adelaide costs are relatively lower than those of Sydney, Melbourne and Perth and generally bear the most favorable comparison of any costs displayed in this table. (i) The Perth costs are high compared with those of Ad.elaide and Tasmania in each

group of bakeries, but usually lower than those of the other capital cities. 226. In the Report of the R.oyal Commission of Inquiry into Bread Prices in the State of New South Wales (metropolitan area-62 bakeries) the average total cost per saleable 2-lb. loaf is shown to be 4. 47ld. Table 46 compares the results of the two investigations.

Number of bakeries . . . .

Tonnage flour used . . . .

Number 2 lb. saleable loaves made

PRODUCTION.

1. Salaries and wages . . . .

2. Materials (other than flour) ..

3. Fuel . . . . . . . .

4. Power and light . . . . . .

5. Repairs and maintenance bakery plant 6. Insurance : . . . . .

7. Depreciation-bakery plant . .

8. Other production costs . .

. .

9. Total Production Costs (ex flour)

DISTRIBUTION.

10. Salaries and wages ..

11. Horse and stable expenditure 12. Motor expenses . . . .

13. Power and Light . . . .

14. Insurance . . . .

15. Depreciation . . . .

16. Other distribution costs ..

17. Total distribution costs

ADMINISTRATION.

18. Salaries and wages . . . .

19. Directors' fees . . . . . .

Printing; Stationery; 'Phone ; Travel

·21. Power and light . . . . . .

22. Discounts; Advert; Trade Subs; Audit 23. Bank charges . . . . . .

24. Bad debts written off . . . .

25. Depreciation-Office furniture .. 26. Other administration costs . . . .

27. Total administration costs ..

TABLE 46.

28. Total Production; Distribution and Administration Costs

OTHER CosTs .

29. Rents; Rates and Taxes (excluding Income Taxes) Depreciation on Buildings . . . . . . . . . . . .

30. Interest on borrowed money . .

. . . . . .

31 {Flour at £10 13s. lOd . per ton (net) . . . . . . . .

· Flour at £11 per ton (net) . . . . . . . .

32. Total other costs ..

33. GRAND ToTAL (ALL cosTs)

F.403.-5

New South ·wales Report.

62

34, 823.6 46,315,388

Per 2-lb. loaf. .534 .183 .102 .019 .059 .013 .044 .003

.957

.904 .150 .146 .001 .013 .041 .014

1.269

.139

.052

.034

.055

.280

2.506

.036 . .

1.929 . .

1.965

4.471

{

This Commission's Investigations.

73

42,147.73 56,056,480

Per 2-lb. loaf. .508 .191 .104 .018 .060 .014 .044 .004

.943

.865 .143 .139 .001 .012 .041 .011

1.212

.170 .004 .036 .001 .027 .001 .034 .001 .026

.300

2.455

.078 .044 ..

1.985

2.107

4.562

70

227. The :figures compiled by this Commission relate to 73 bakeries, as compared with 62 in the New South \Vales State Report. The cost statements prepared by this Commission show the position for the year ended 30th June, 1935, whereas in :New South Wales the State figures were compiled some months earlier. This resulted in certain slight alterations in costs owing to changes in price levels. Further, the additional data now included is not composed of

quite the same range of businesses in the same proportions, so that the dissection of labour costs between Production, Distribution and Administration is not quite the same.

228. The flour costs are slightly higher in the :figures cornpiled by this Commission, owing to that item having been brought in at a uniform price of £11 net per ton; whereas in the New South Wales costs flour was included at £10 13s. lOd. net per ton.

229. In the New South Wales State Commissioner's :figures 8 per cent. on the capital invested, representing . 288d. per 2-lb. loaf, was included to cover rent or the interest on the value of the land and buildings, rates and taxes, income taxes, interest on borrowed money and a return upon the proprietor's invested capital. This Commission has shown rents, municipal rates and taxes and interest on borrowed money .as separate items in the cost figures, but has made no allowance in costs for interest on the proprietor's capital.

(v) THE AvERAGE CosT oF THE 2-LB. LoAF IN CouNTRY DISTRICTS oF AusTRALIA.

230. Considerable difficulty was experienced in obtaining reliable information from bakers in provincial cities and country towns regarding their costs and business affairs generally, owing to the absence or incomplete nature of the records in their possession. Comparatively few country bakers keep their business accounts on recognized commercial lines, and further, the majority of country bakers include the manufacture and sale of pastry, cakes, confectionery, small goods and other side lines, or the conduct of refreshment rooms as part of their bakery business and do not keep separate records so as to enable the costs and other financial returns of the bread­ baking section, to be ascertained.

231. Most of the 1,163 returns received frmn country bakers were lacking in essential particulars and had to be discarded. The remainder were closely examined and in many cases amended as a result of investigation or correspondence.

232. In all, 110 returns were found to be satisfactory for the Commission's purposes, the number for each State being: New South Wales 57, Victoria 20, South Australia 7, Western Avstralia 8 and Queensland 18. As the costs for Tasn1anian bakeries have been already reviewed with those of the 1nainland metropolitan only the country districts of the majnland States are dealt with in this sub-section. ·

233. The costs relate to the year ended 30th June, 1935, and were compiled on lines similar to those followed in connexion with the 1nainland metropolitan areas and Tasmania, as explained fully in sub-section (b) (iv) of this section.

234. The Com1nission has not attempted to collate the costs of country bakeries in groups of various types and sizes because the number of returns received from certain centres was comparatively small, and country bakeries are usually neither large in size nor mechanized.

235. The costs of country bakeries have therefore been grouped geographically. Each area has been given a distinguishing number, and the figures have been arranged so as to show the average cost per 2-lb. saleable loaf without revealing the identity of any individual business.

236. Table 47 shows the data for the various States. The range of variation is considerable, but this was only to be expected in view of the variety of circumstances in which the businesses were operating. The range in costs of distribution is especially wide and for varying reasons. Thus, in Broken Hill (New South Wales District 10) competition is intense and uneconomic. There are sixteen bakeries handhng a total of 37. 5 tons of flour a week, and each bakery endeavours to serve customers in every part of the city. In other cases where delivery costs are low this is largely due to the practice of arranging distribution of large part of the output through the medium of local carriers often at no expense to the baker. Administration expenses also show considerable variation, because, in some instances, the expenses under this subhead are very small.

71

TABLE 47.

TABLE SHOWING COSTS PER 2-LB. SALEABLE LOAF OF THE INVESTIGATED BAKERIES IN CERTAIN PROVINCIAL CITIES AND COUNTRY DISTRICTS OF THE MAINLAND STATES AS AT 30TH JUNE, 1935.

1 ..

2 ..

3 ..

4 ..

5 ..

6 ..

7 ..

8 ..

9 . .

10 ..

11 ..

12 . 0

13 ..

14 15 0.

16 ..

17 ..

18 . .

19 ..

20 ..

1 ..

2 ..

3 ..

4 ..

5 ..

6 ..

7 ..

8 . .

9 0.

1 ..

2 ..

3 ..

4 ..

5 ..

6 ..

7 ..

8 ..

9 ..

10 ..

11 ..

12 ..

1 ..

2 ..

., v ..

4 ..

5 ..

6 . 0

7 ..

1 ..

2 0.

3 . 0

District. Production.

d.

1.861 1.034 1.195 1.097 1.019 1.043 1.667 1.052

1.440 1.356 0.904 1.087 1.052 1.077 0.973 0.961 1.104 0.825

1.172 1.221

1.384 1.871 0.937 1.355 1.087 1.730 1.161

1.559 1.127

0.888 1.592 1.017 1.294 1.192 1.313

0.921 1.840 1.162 1.564 1.207 1.172

1.198 1.062 1.475 1.142 1.167 1.327 1 .107

1.179 1.045 1.626

Distribution. I Administration.

d.

NEW SoUTH vV ALES.

1.176 1.531 1.346 1.164 0.498 1.067 1.175 1. 172 1.691 1.559 0 .962 1.042 1. 119 0.457

1.408 1.092 0.821 0.792 1.026 0.896

VICTORIA.

0.978 0.976 1. 401 0.925 0.933 0.440 1.089 1.198 1.283

QUEENSLAND.

0 .950 1.142 0.854 1.316

1.223 1.055 1.167 1.1 62 0.968

1.552 1.055 0. 774

SouTH AusTRALIA.

0.612 1.099 1.010 1.189

0.856 0.776 0.733

WESTERN AUSTRALIA.

1.222 0.803 1.055

d.

0.131 0.297 0.800 0.104 0.143 0 .204 0.347 0.044 0.702 0.272 0.328 0.099 0.284 0.181 0.057 0.218 0.366 0 .05 1 0.258 0.141

0.437 0.117 0 .325 0.163 0.218 0.534 0.177 0.445 0.484

0.405 0.325 0.149 0.359 0.362 0 .229 0.408 0.054 0.057 0.337 0.293 0.290

0.063 0.040 0.158 0.227 0.067 0.087 0.293

0.294 0 .11 1 0 .204

Other Costs.

d.

2.090 2.261 2.646

2.086 2.151 2.551 2.148

2.454 2. 257 1. 994 2.183 2 .1 69

2 .091 2 .11 2 2 .255 2 .354 2.236 2.099 2.145 2.253

2.159 2.232 2.304 2.373 2.145

2.345 2.292 2.191 2.276

2.067 2.060 2.036 2.086 2.082 2.183 2.128

2.074 2.196 2.287 2.078 2.217

2.247 2.167 2.213 2.252 2.152 2.089 2 . .140

2.067 2.293 2.365

Total Costs.

d.

5.258 5.123 5.987 4.451 3 .811

4. 865 5.337 4.722 6.090 5.181

4.377 4.397 4.546 3.827

4.693 4.625 4.527 3.767 4.601

4.511

4.958 5.196 4.967

4.816 4.383 5.049 4.719 5.393 5.170

4.310 5.119 4.056 5.055

4.859 4.780 4.624 5.130 4.383 5.740 4.633 4.453

4.120 4.368 4.856 4.810 4.242 4.279 4.273

4.762 4.252 5.250

237. Table 48 ,shows the individual bakers' costs arranged in order of increasing magnitude for each State, while Table 49 has been drawn so as to indicat e in a rouo-h way, the range of costs in the country with those in the appropriat e metropolitan area . This is done by showing the cost of the loaf in the case of bakeries with the lowest , median, and highest costs in metropolitan

and country areas in each mainland State.

72

TABLE 48.

STATEME NT SHOWING THE RANGE OF INDIVIDUAL COUNTRY BAKERS' COSTS AS AT 30TH JUNE, 1935, IN RESPECT OF THE DISTRICT COSTS SHO,VN IN TABLE 47.

(Expressed in pence per 2-lb. saleable loaf.)

New South Wales. Vi ctoria. South Australia. Western Australia. Queensland.

3.767 3.470 4.120 4.252 3.994

3.811 4.084 4.242 4.600 4.275

3.827 4.202 4.273 4.602 4.072

3.835 4.243 4.279 4.635 4.310

3.908 4.399 4.368 4.750 4.336

4.008 4.816 4.810 5.002 4.373

4.153 4.837 4.856 5.128 4.397

4.158 4.838 .. 5.885 4.539

4.195 4.867 . . .. 4.624

4.221 4.899 . . .. 4.633

4.259 4.958 .. . . 4.780

4.348 4.979 . . .. 4:790

4.376 5.049 . . .. 4.971

4.397 5.084 . . .. 5.055

4.405 5.196 . . .. 5.119

4.418 5.196 .. . . 5.130

4.511 5.207 . . .. 5.566

4.527 5.286 .. . . 5.740

4.551 5.393 . . .. . .

4.601 5.935 . . . . ..

4.607 . . . . .. . .

4.609 .. . . . . . .

4.625 . . . . .. . .

4.658 . . . . .. . .

4.676 . . . . .. . .

4.693 .. . . . . . .

4.715 . . . . .. . .

4.722 . . . . ... . .

4.755 . . .. . . . .

4.802 . . . . .. . .

4.816 . . . . .. . .

4.826 . . .. . . . .

4.893 . . .. . . . .

4.915 . . .. . . . .

4.981 . . . . .. . .

5.123 .. . . . . . .

5.148 .. . . . . . .

5.216 . . .. . . . .

5.258 . . .. .. . .

5.337 .. .. . . . .

5.987 . . .. . . . .

6.090 .. . . . . . .

TABLE 49.

238. Showing, for the n1ainland States, the costs per loaf of the bakers whose

returns sho.w·ed lo west, median and highest costs respectively. Number of bakeries Lowes t. Median. Highes t. State. concerned. (1) (2) (3) (4)

.

d. d. d.

New South Wales-Metropolitan . . .. 71 3.788 4.558 5.974

Country . . ... . . 42 3.221 4.608 6.090

Victoria-Metropolitan . . .. 49 3.607 4.322 5.259

Country . . . . .. 20 3.470 4.929 5.935

South Australia-Metropolitan . . .. 28 3.213 4.158 4.727

Country . . . . .. 7 4.120 4.279 4.856

Western Australia-Metropolitan . . .. 26 3.825 4.535 5.548

Country . . . . .. 8 4.252 4.693 5.885

Queensland-

4.520 Metropolitan . . . . 29 3.887 5.548

Country . . . . .. 18 3.994 4.629 5.740

73

239. In general, country costs show a wider range than metropolitan. The median costs are slightly higher than corresponding median city costs, except in Victoria where the divergence exceeds 0. 5d. When the small number of country cases investigated is taken into account, the correspondence is generally satisfactory, in fact surprising.

(c) CAPITALIZATION OF THE BREAD BAKING INDUSTRY.

240. The figures for the capital invested in the industTy have been gathered from the bakers' replies to questionnaiTes and from balance sheets. As pointed out elsewhere in some detail the accountancy side of the bread industry is frequently poorly conducted, and conse quently the number of cases regarding which satisfactory information in connexion with which capital and detailed costs were available, are surprisingly small and include, of course, a large percentage of the bigger and better conducted bakeries.

241. The Commission considers that the. information collected and set out in the tables which follow is accurate for the bakeries concerned, but, for reasons which will appear later, it is clear that some caution must he exercised regarding the results as an average, representative of the industry as a whole.

242. In cases where the individual businesses have gradually increased in size the proprietors have adopted various policies in respect to capitalization. In some instances, especially where the bakehouse has remained in the control of the same fan-lily or partnership for many years, improvements have been effected out of profits or from the personal labour and resources of the proprietor and/or his family, and the amounts shown as capital and assets on the balance sheets have been kept low. In others, especially where th

on the various kinds of assets, especially the intangible item of "goodwill ".

243. Particulars of capital employed have been summarised for the financial year 1932-33 from the questionnaiTes, balance sheets and other financial statements of bakers in the metropolitan areas, provincial cities and country towns in the various States of the Commonwealth. The book values have been accepted in all cases; the Commission has made no attempt to assess the

present day value of the assets for the reason that the industry, generally, is passing through an unusual period of instability and that conditions are therefore abnormal.

244. Table 50 gives the result of this survey. In this table the data for the various investigated groups are assembled geographically, and for each group the liabilities and assets are segregated under various sub-heads in columns (4) to (7) and (9) to (13) respectively. In cases where the returns of bakeries disclosed the possession of sums invested outside the businesses

such sums have beeri held to be extraneous to the industry and have been deducted from columns (5) or (4).

245. Column 15 of Table 50 shows that the average capital invested increased with the size and degree of mechanization of the bakery.

246. Column 18 indicates the varying extent to which the potential capacity of the units comprising the groups is actually used. The low percentage shown by some groups indicates the extent to which capital is idle in some classes of bakeries. The wide variation between the groups in this respect reflects the extent to which either bakeries have been constructed in

excess of requiTements whether actual or anticipated, or have lost business. In some cases long established bakeries have refused to cut prices in order to retain trade, and consequently theiT output has diminished in recent years ; in others new bakeries have been constructed with the expectation that the business would increase and such increase ·has not yet occurred.

24 7. An analysis of liabilities in Table 50 shows :­

Total liabilities of investigatedbakeries Loans, advances and overdrafts from-Of which shares including reserves undistributed profits or proprietors' capital is ..

(i) flour millers ( ii) other sources Other creditors

£

2,013,898

1,390,718 121 ,000 339,982 162 198 -

- 69 per cent.

6 per cent. 17 per cent. 8 per cent.

TABLE

50.

SHOWING

THE

BAKERY BUSINESS LIABILITIES

AND

ASSETS, BAKEHOUSE CAPACITY, TONNAGE OF FLOUR USED WEEKLY,

AND UNIT

AVERAGES

IN

RESPECT OF

THE

VARIOUS GROUPS

OF

INVESTIGATED

METROPOLITAN

BAKERIES,

ARRANGED

ACCORDING

TO

AREAS,

AS

AT

30TH

JUNE,

1933.

M etro

­

politan Area. or State

.

B a k e

ry

Group.

0

I

I

'0

I -

....

'8

'8

(3

s

§'

Liabilities. Assets.

""'

"'

....

b

o

0

l'l

""'

gr

,&

,&

::1

.....

8 ·

§

§

5

;8

2

§

;a .s

·s:g

·s. '8

oe!:l

.

'd

.:,

"'

8o..S.

1lo

a-::5

'".!<:

't3

.

'd

SP<

-b

i=l

8'-'P<

Sop.

.....

r;;;

0

o:l .5

-d

.;

gj .s'd

a

g1

2

.;

0

3

0

>,

>.

:Ss

>.

>.

gf'O

.gr'8

::0

8

'B

E rri

-:

.r:c!

t'

8

Total.

->i 'd

§

.s

o:l .8

'd

rri

Zl

8

Goodwill.

Total.

'8

e

;::J

'2l

'2l

'2l

l'l

;a §

§

:g §

i-

z

OJ

Q)

8

15 t5

t

+>

en

'"d

"dE

'<:I "d

,.d '"d

·s

0

'"d

cd

Q.)

I

ce

±::

'"CI

't$

¢.!

5

..=; +J

"0

0

,.!:4

§'5

.s§{3

§'B

r:q

@

gbbi:J

rn 0

H!Xl

H..:

...:

or:c!

0

E-<

r"< i@o

...:oe!:lo ...:oe!:lo

...:::::!-P<:::J

(1) ( 2 ) ( 3 ) (4) (5) (6) ( 7 ) (8) (9) (10) (11) (12) (13) (1 4 ) (15) (16) (17)

I

(18)

(19)

(20) (21)

(22)

--

-------

-----------

---

£

£

£

,

l.

£

£ £ £ £ £ £ £

Tons.

Tons.

%

£ £ £ £

Sydney

. .

H.-1

-5

tone

. .

8

7,9 4 9 . . 4,553 1, 713 14,215

I

3,886

5,296

144

3,

784

1,105

1 4,215

I

1, 777

37.675

21.075

I

55.938

377

348

674

622

·

M .

& H . - 1 - 5

tons.

. 14 24,589 . . 14,430

13,934 52,95311

10 , 527 14,177 1,935 11,739 14,575 52,953 3,782

99.85

57.45

5 7.5

36

530

384

922

668

Melbourne Adelaide

..

Perth Brisbane

..

JVf.

& H .

-6-10

tons

22 1 41,9 38 . . 33,029 10,557 18 5

,524

40,218 57,546

10,4 59

29,135 48,166 185,524 8,433

257.5

180.33

70.030

720

1

533 1,029 762

M .

& H.-ll

- 15

tons

9 70 , 352 . . 12,73 4

11 ,659 94,745

24,306 21 ,

080

2,601 27,2 53 19,505

9 4 ,7 4 5

10,527

133.75

109.18

81.629

708

562

86 8 689

M.

& H .

-Ov

c-rl5

t o ns

ll

272 ,900 53,406 80,894 23,918 431,118 144,211 164,036

6,464

51,402

65,005

43l,ll8

39,193 3

04.

1 2 5 272

.23

89 . 512 1 ,4 18 1,204 1,584 1,345

S.A

.--11 - 15

tons

. . 4

50,4-10 5,507

14,549 6,574 77,040

16,016

27,348

35

8,812 24,829

77,040 19,260

77.

5

1

54 . 5

70.3

2 2

994

674

1,414

958

Auto

. an

d

S .A.

--Ov

e r

1

1 5 tons

. . 5 1 2 3,25 5 . .

43,039

18,321 184,61 5

69,450

53,375 2,315 34,681

24,794

184,615 36,923

, 210

114.4

54.4

75 879

,

761

1,614

1,397

H. - 1

-5

tons

..

M . &

H . - 1 - 5

t ons . .

M.

& H . - 6

-10

t ons

l\1.

& H.-ll-15

t o ns

M . &

H.-Over

15 tons

S.A.-O

ve r

15 tons

H.-l

- 5

tons

M .

& H.

- 1

-5

tons

M .

& H.-6

- 10

ton s

M.

& H.-Over

15 ton

s

H.-1

- 5

ton s

M.

& H.-1-5

tons

73 ll

8

15 5

5 5

49

7

12 6 3

9

9

M .

& H.-6-10

tons

/}

8

M.

& H.-11-15

tons

26

691,393

158,913 1203 ,2 28 18 6,676 11,040 ,2 10 11308,614 1342,858 123,953 1166,806

11,418 2

1, 4 91 70 ,5 39 44,715 45,888

5,448 16,084 51 ,833 24 ,555

56,243 43,622

1,120.400

1

929 752

I

1, 2 86

I

1,041

167,540

361,591

2,919 25,260 18,762 17,645

678 2,229

4,653

3,562

5,076 12,506 8,922

4,734 11,167

7,560

1197,785 145,967

50 1,850 1,568 10,479

229 771

810 5,173

20,4 2 8 42,651 135,556 80,421

106,865 226,982

612,903

3,198 27,881 21,140 33,297

2,9 4 6

8,360 22,650 7,454

;

18,464 65,727

5,383 13,467 28,722 19,812 27,525

65,173

125,601 160,082

-------

1,196

1,016

7,504

13,516

8,124

5,351

588 683 2,256 927 109

451

4 ,505 4,778 23,466 13 ,0 78 26,902 38,361

7,006 15,363 58,462 39,150

33,865 57,270

20,428 1,857

4

5 29

0

26

65.022

454

298 698

459

.,4 2,651

I

5,331 42

.42

34.48

81.282

]

,005 643

1,237 791

135, 556

9,037

19 5 . 7 5

1 111 . 18

56.7

9 6

692

394

1,219 693

80,421 16,084 82

1

61.95

75.54

7 959

503

1 ,29 8 666

106,865 21,373 124 92 74 . 193

862

589

1,162 793

226,982 45,396

I

321.5

1 187.6

58.351

I

706 528 1,210 905

5,014

ll1,090

211,116'

612,903 99,078

810.67

63 .

756 496 1,187

·

778

587 399 . . 3,198 457

12.87

10 . 16 78

0

943 249

248

315

315

216 6,449

1,000

21,140

3,523

57.5

38 0

8

67.477

368

3.50

545

519

1,371

4,990

500

27,881

2,323 1

101.5

37.8

37.241

275

270 .

7381

724

331 9,038 . . 33,297 14,839

91.5

69

75.409

364 364

483 483

9,995

13,933

:)Rf)

1

GA'7

I

l!

(\()<)

I

or-•

"'"'

II

I

I

I

- .

I

!I

1---1--

1--

•--•--

64, __

_

13,947

I

6 ,983 85,516

II 26,819

I

33.816

I

2,505

I

20,876 85,516

II 21,142

I

263.37

1 155

.7 6 1 .59.141

6,749 15,903

37,805

60,457

5,322 3,724

11,908

1,982 776

3,036

14,053 20,403

52,749

3,212 5,160 13,354

7,558 6,333

19,984

183 2,267

307

2,346 4,570 12,950

14,VO,j 20,403

°

52,749

1,561 2,267

17,233

23.25 39.0 105.75

19.57 31.97 72.44

84.172 81.974 68.50

325 604 523 498

319 572 470 441

549 718 638

539 680 573 728 643

I

1---1

II

I I

1----11

H.-1

- 5

tons

20,954

I

5,794 87,205

II 21,726

I

33,875

I

2,757

I

19,866 8,981

168

1-1

I I

5,173

••

I':AP:(l

II

1

l'lal

I

0

>H>n

I I

J--1--•--

87,205

II 21,061

123.

98

I

73.

797

519

466

703 631

7

7

13

3,262 9,157

5,456 17,660 62,304

1,661

5,530 19,585 2,432 6,833 21,464

600 93 872

763 3,354 14,465

5,456 17,660 62,304

779 2,523 4,793

M.

& H.-l-5

tons

M.

& H.-6-10

tons

M.

& H.-ll-15

tons

M.

& H.-Over

15 tons

l_ 3

J

11,938 45,968

48,486

2,460 7,179 8,950

1,584

59,020

21,218

2'l,7l6

198

9,888

1,850 5,918

59,020

50,980

25.65 36 . 5

154

. 5

131

14 21.93 86.34 67.75

54.580 60.082 55.883

51.718

213 484 403

213 433

365

390 8 05 7 ')<

)

390 721 653

451 451 871 871

---1---1

1---1

II

I I

II

, ___

, ___

, __

_

30

1111,565

18,589

114,286

I

144,440

II 47,994

1

58,445

1

1,763

I

28,470 7,768

I

144,440

II 59,075

I

347.65

1 190.02

I

54.658

-----

1 1

---1

1---1

I I I I

1---1

II

415

393

760

719

Tasmania

I

H.-l

- 5

tons

.

·1

14 5,088 . . 3,166 1,130 9,384

3,590

3,413 377

2,004

. .

9,384

1

670

j

33 . 25

24.03

72.270

282 282 391 391

lVL

& H.-l-5

tons

ll

15,994 . . 2,270

384

18,648

6,373 7,560

2 ,21 8 2,057

440

18,648 1,695

42.5

31.55

74.235

439

428

591 577

M.

& H.-6

- 10

tons

4

11,246 2,325 1,043 978 15,592

3,828

7,268 1,087 1,809

1,600

15,592

3,898

42.5

26.9

63.294

367

329

580

520

.....:(

29 32,328 2,325 6,479 2,492 43,624 13,791 18,241 3,682 5,87o

2,o4o

43,624 6,263

us.25

I

82.48

69.75o

369

352

s29

504

I

---

Grand

.-[235-

1,321

,920

68,798

460,9

82

162,198

2,013,8981544,545

647,317

39,674

352

,978

429,384

2,013

,89R

. 8 ,

570

2 ,8 28.34-

11 877

66.394

-712

----,;;;;}

1 , 0 7 2

-844

TABLE

50A.

SHOWING TURNOVER, BOOK DEBTS

AND

PERCENTAGE THE

AMOUNT

OF BOOK DEBTS BEARS

TO

TURNOVER OF

THE

INVESTIGATED

BAKERIES­

FINANCIAL

YEAR

1932-33.

Sydney. Melbourne. Adelaide.

Perth.

Brisbane.

Tasmania.

Type

and

Tonnage Percentage

Percentage

Turnover.IBook

Debts.

Percentage

Percentage

Pe r centage

Percentage

Group.

Turn

over. Book Debts. Book

Debt

s

Turnover.

Book Debts. Book

Debts

Book D e bts

Turnover.

Book Debts. Book

Debts

Turnover.

Book Debts.

Book

De"Qt

s

Turnover. Book Debts. Book D e

bts

to

to to

to

to to

Turnover.

Turnover.

Turnover

.

Turnover

.

Turnover

.

Turnover.

£ £

%

£

£

%

£

£

%

£ £

%

£ £

%

£

£

%

Hand

1-5

. .

..

25,035 2,196 8 .771 26,694 2,967

ll.ll5

7,592 215 2 . 832

20,075

1,652 8 . 229

9,700

557

5.743

16,031 1,560

9.731

M.

and

H .

1-5

..

69,970 6,225

8.893

29,691 2,984

10.050

37,594 2, 7 59

7.338

33,893 2,871

8.470

27,303 2,772

10.152

18,589 1,621 8

.7 20

M.

and

H.

6-10

..

177 ,618 1

4,3ll

8.0 5 7

ll7,216

11,377

9 . 705

38,723 5,142

13.278

45,344 3,575

7.884

1 08 , 312 10,881

10.045

23,296 1,3 95

5.988

M.

and

H .

11-1

5

. .

104,663 6,978

6.667

63,092 4,874

7.725

..

..

. .

27,142 2,718

10.014

15,636 2,030 12

.98 2

..

. . . .

16 and

over

.

.

286,676 20,494

10.

978 98,190 15,525

15.8ll

71,408 4,723

6.614

..

. .

..

64,033 4,762

7.437

. .

. .

. .

Semi-Auto

11-15

. .

71,3 92 5,485 7 . 683

..

. .

..

. . .

.

.. ..

. .

..

.. . .

. .

. .

. . .

.

Auto.

and

Semi-Auto

.

I

16 and

over

..

178,926

10,899

6 . 091 186,205 18,584

9.980

. .

..

. .

. . ..

..

. .

..

. .

..

. . . .

I

-l Cl

l

7'6

248. Table 51 shows a similar dissection of data for the country districts in the various States. For reasons given when discussing costs, no attempt has been made to segregate the figures into groups according to size or degree of mechanization. TABLE 51.

SHOWING THE BAKERY BUSINESS LIABILITIES AND ASSETS, BAKEHOUSE CAPACITY, TONNAGE OF FLOUR USED WEEKLY, 'AND UNIT AVERAGES IN RESPECT OF THE INVESTIGATED COUNTRY BAKERIES AS AT 30TH JUNE, 1933.

Liabilities. Assets.

State.

(1)

New South Wales ..

Victoda . ·1 South Australia .. Western Australia Queensland ..

State.

New South Wales Victoria ..

South Australia .. Western Australia Queensland ..

Number Share

of Capital Reserves

Bakeries. · or Pro- and Un- prietors distributed Capital Profits.

Invested.

(2) (3) (4)

£ £ £

57 ll0,094 1,136

20 53,919 ..

7 4,517 ..

8 8,977 ..

18 35,384 ..

Average Capacity of

Amount of Bakehouse

Capital per expressed in

Bakery. Tons of Flour

per Week.

(14) (15)

£ Tons.

3,043 333.10

5,112 107 . 55

1,335 20.75

1,291 22.95

2,591 91.85

Advances Mort-gages, Bank

Over-drafts, &c. (5)

£

41,867 33,599 4,414 780

5,114

Tonnage of Flour used Weekly.

(16)

Tons. 198.03 74.99 14.29

21.55 74 . 39

. Fixed Sundry Assets Land Stocks Credi· Total. (exclurting and JAquid and Assets. Sundry Goodwill. Total. tors. Land and Buildings. Debtors. Buildings). (6) (7) (8) (9) (10) (11) (12) (13) £ £ £ £ £ £ £ £ 20,370 173,467 46,673 52,813 4,235 46,074 23,672 173,467 14,722 102,240 22,867 26,473 1,859 22,941 28,100 102,240 412 9,343 3,256 4,368 78 1,491 150 9,343 573 10,330 3,829 1,365 749 3,5ll 876 10,330 6,139 1 46,637 I 14,771 8,496 1,756 18,323 3,291 46,637 Average Average Amount of Amount of Flour used Amount of Amount of Capital (includ- Capital (exclud- Weekly as a Capital Capital ing Goodwill) ing Goodwill) Percentage of (including (excluding per Ton of per Ton of Capacity. Goodwill) per Goodwill) per Flour used Flour used Ton of Ton of Weekly. Weekly. Capacity. Capacity. (17) (18) (1 9) . (20) (21) Per cent. £ £ £ £ 59.45 520 450 876 756 69.725 950 689 1,363 989 68:867 450 443 654 643 93.894 450 412 479 439 80.982 508 472 627 583 249. The variations shown by the country data are illustrative of the variety of circumstances existing within this industry; for instance, the high figure shown for Victorian businesses is explained, firstly, by the difficulty of obtaining sufficient reliable data, secondly, by the number of cases drawn from provincial cities, and, thirdly, by the inclusion of certain bakeries from irrigation areas where abnormal conditions in regard to capitalization have prevailed in the past. 250. The only basis which can be used for comparison between bakeries is the capitalization per ton of capacity or per ton of through-put and the figures in the appropriate columns of Tables 50 and 51 and the columns of Table 52 show these two units for each classification o£ bakeries in each particular State. The ,capital per ton of through-put has been calculated both including and excluding goodwill. 251. Goodwill at any time is more or less intangible. Despite its intangibility the industry has in the past recognized it as an asset in connexion with sales of bakery businesses under certain circumstances in certain districts. Whatever may be the attitude of any assessor or authority towards the item of goodwill when valuing a business for purposes of sale or compensation, the Commission has decided to take no cognizance of the goodwill item in the balance sheets when making calculations as to the capital upon which interest or profit should be determined. The admission of the tangible assets at 20s. in the£ seems ample recognition of goodwill for this purpose, irrespective of what premium a purchaser may be prepared to pay by way of goodwill to secure any particular bakery business.* GOODWILL :• In an earlier part of this section it was shown that goodwill represented a substantial proportion of the invested capital. Evidence has been given to the Commission that goodwill is recognized for the purpose of a sale of a bakery business in certain centres as being worth £50 per sack of 150 lb. of fl our used per week, or approximately £666 per ton. There are, however, variations in different centres. In practice, in bakery businesses in the metropolitan areas of from 1-10 tons weekly, the average amounts paid for goodwill range from £75 to £24-1 per ton and, in the groups of bakeries of greater output, the amount paid ranges from £203 to £720 per ton. The present position of bakery businesseH which have been inves tigated reveal that, in some instances, too much has been paid for goodwill in past years of prosperity. Witnesses representing the industry have stated the value of goodwill has disappeared in certain centres owing to price-cutting and keen competition within the industry. . Investigations into the affairs of individual bakery businesses have supported this statement and indicate that, at the present time, there would be diRicnlty in establishing a value for goodwill in many bakery businesses in the metropolitan areas. Jn this survey, goodwill has been included as part of the capitalization of the bakeries investigated only where t he item was actually purchased and stlll remains part of the assets of the business. At the beginning of 1927 the values of bakery businesses in Melbourne were in the vicinit y of.£70 and £80 per J:>ag of flour(= to £1,064 per ton per week). For a little while after, a period of all round prosperity co ntinued and so did the prices pa1d for bakery busmesses . GoodWill has decreased in value, however, in later years until today and it can only be assessed at the price one is able to obtain for hi s I! he can find a The of trade, .i.e., wholesale or retail, the type of district in which the business is located, closeness of its deliveries, the length of tn;ne 1t has been the perwds the vanous customers have been supplied and whether the concern is progressing or declining are also factors that are taken mto account when assessmg the value of a bakery business . . In Adelaide, the representative of the Master Bakers' Association stated in evidence that the basis of goodwill in South Australi_a is now £250 per ton according to the quantity of flour used per week. In the peak period it was higher, but not more than £350 per ton per we ek. If the pnce of bread is too low, goodwill is worth nothing. . . In Brisbane, it was the practice for the purchaser of a bakery business to pay an for accorcling t_o t he C?f bags of flour J?er week. The Commission was informed in evidence by the representative of the :!\laster Bakers Associatwn that there IS no goodwill m the Industry m that City today. This was supported by other witnesses. . In Perth, the representative of the Master Bakers' Association stated that the amount paid for goodWill is much smaller than In the eastern States. There is no generally;;recognized practice for the value of goodwill, a.nd the amount mnges from £10 to £15 per bag.of flour per (= £1 33 to £200 per ton) and Is paid over and above the purchase price of the fixed assets. There has not been much fluctuation ln the amount pa1d for goodw 11m recent year!. \ In Hobart, the sales of bakery busiues&ell <;luring the· last few have beeil negligible and it would be ditficult to assess the value of goodwill as applicable to the Industry in Tasmania. ·

T A

BLE

52•

SHOWING

THE

BAKERY

BUSINESS

LIABILITIES

AND

ASSETS,

BAKEHOUSE

CAPACITY,

TONNAGE

OF

FLOUR

USED

WEEKLY

,

AND

UNIT

AVERAGES

IN

RESPECT

OF

THE INVESTIGATED METROPOLITAN BAKERIES, ARRANGED

IN

TYPE

AND

TONNAGE

GROUPS ,

AS

AT

30TH

JUN

E, 1933.

I

"'

....

=

.....

...

0

P.

L iabilitie s .

As se

ts.

»

....

.... 0 0

c;i

...

- o

::s

1:)

::s

.;.::

-o

0

"'"'

::>.O

::S

o

...

g

...

f:;.;

•

::s -g-::

g-g ...

Cl!oo

CI!OO

...

o

t:

IXI""':Jl

i:t.S

>.

M e trop o litan

"' l'l

s&

SC325..

Bakery

Group

.

Ar e a

bCrc

.....:..

"d oo

"d

c;.S

i:t

'0

c;

....

;;;l

'tl

ctJa

<

o:;t::

»

"d

or S t at

e.

abO

:

"'"'

z ·5

0 P.

,....

Q)

ai

Total.

Goodw

ill .

Tota l .

»

i3·r;:a

g:g § ;

"d .8

"d;a

"doo

"'p.

...

5 .8 .£

-d

i=l <>i!J

...

·s"t3

.!<:

·o-+>

'"' "'"'

i1

O'E)

....,"d

! "d

0

l"l a;>

§=§

l':l ::::l

ol':l..::l

CI>Q.!<:

P.::>.o

C)

S"''"'"'

"' P.;;.

., ...

o<"'

IXl

..c: ...

l"l,..

000

a;::l

woo

....

;:Jp.;

HiXI

( 1 ) ( 2 )

( 3 )

( 4 )

(5) ( 6 ) ( 7 ) (8) (9)

( 10 )

( 11 )

(1 2) (13 )

(14)

(1 5) (16 ) (17) (18) ( 1 9)

( 2 0)

( 21 )

(22

)

---

- - - - - - -

£ £ £ £ £ £ £ £ £ £ £ £

T o ns. T ons .

%

£ £ £

£

H.-1-5

tons

. .

S y dne

y . . 8 7 ,949

. .

4,55 3 1 , 713 1 4,2 1 5 3 , 886 5 , 2 9 6 1 44 3,7 84

1 , 10 5

14,2 1 5 1,777 37 . 67 5

2 1.

075

55.938

37 7 34 8 67 4 622

Melbourne

11

11 ,4 1 8

..

5,448 3 , 562

2 0, 428

2 ,94 6 5 ,3 8 3 588

4, 505 7,006 20, 4 28

1, 857 4 5

29.26

65.022

45 4 29 8 6 9 8 4 5 9

A d e l a ide 7 2,9 1 9

..

50

229 3, 1 98 1 , 1 96

1, 0 1 6

58 7 399

. .

3, 1 98 45 7 1 2 . 8 7

10 . 16

7 8.94

3 249 248

31 5 315

Pe r th

. .

9 6, 7 49

..

5,3 22

1 , 9 82

14 , 05 3

3,2 1 2 7 ,558 1 8 3 2 ,3 4 6 7 5 4

1 4, 0 53

1 ,56 1

23.

25 19

.5 7 8 4

.17 2

6 0 4

57 2 718

• 680

B ri s b

ane

7 5, 1 7 3

..

..

283 5,456 1 ,6 6 1 2,432

600

7 6 3

..

5,456 779 25

.6 5 1 4

54.580

2 1 3 2 13

390

390

T asmania

1 4

5,088

..

3 ,1 66

1 , 1 3 0

9,3 8 4

3, 5 90

3, 4 1 3 377

2 ,004

. .

9, 3 84

6 70

3 3.

2 5

2 4.03

7 2.2

7 0

282 28 2 39 1 391

--

- - - -

---

5 6 39,29 6

. .

18 ,5 39 8 , 899 6 6 ,73 4 1 6,49 1

25, 0 98

2 , 4 7 9 13, 8

01

8 , 86 5 6 6,73 4 1,1 92 171

.695

11 8.09

5

6 6.459

3 7 6 3 2 6 5 6 5

4 90

--

- -

--

---

M .

& H .

-1 - 5

t o ns

..

Sydney

. . 1 4 24,589

. .

1 4 , 430

1 3 , 934 52,95 3

10, 52 7

1 4 ,177 1,9 35 11,7 3 9 1 4,5 7 5 52,95 3 3 , 7 82 9 9 . 85 5 7

.45

5 7. 5 3 6

5 3 0

3 84 922 6 6 8

Melbourne 8 2 1, 49 1

..

1 6,084 5,076

4 2,65 1

8 ,3 60

1 3 , 46 7 683 4 ,778 1 5 , 3 63 42 , 65 1 5,33 1

42.42

34.48

8 1.

282

1 ,005

643 1 ,23 7 7 9 1

Ade l aide 1 2 25,260

..

1,85 0

771 27,88 1

7, 5 0 4

1 3,5 1 6 1,371

4, 99 0 5 00

2 7 ,88 1 2 , 32 3

101. 5

3 7.

8 3

7. 24 1 2 7 5

2 70

7 38 7 2 4

Perth

..

9

1 5 , 903

. .

3 , 7 24 776

20 , 4 0 3 5 ,16 0

6 , 3 3 3 2 , 2

67

4, 5 70 2 ,073 20,40 3

2,26 7 3 9

31.

97 8 1. 974 523

4 70

6 3 8 5 73

Br isbane

7

11 ,938

. .

2,460

3 ,262

17 ,6 6 0 5 , 5 3 0

6 , 8 3 3 93 3,3 5 4

1,8 5 0

17 , 6 6 0

2,523 3

6. 5 2 1

.9 3

6 0.082

484 4 3 3

8 0 5

7 2 1

T

asmania

11

1 5,994

..

2 , 2 7 0

384 1 8,648 6 ,3

73

7, 56 0

2 , 2 18

2 , 057 440

1 8 ,6 48 1, 695 42 . 5 3

1. 55

74.235

439 428 59 1 5 77

--

----

---

6 1

11 5,

17 5

. .

4 0,8 1 8

24 , 2 03 180 , 1 96

43 ,4

5 4 6 1, 88 6 8 , 56 7 31, 48 8

3 4 ,801 1 8 0 , 1 96

2 , 954 3

61.77

2 1 5.

1 8

59.4

7 9 498

4 0 2

8 37 676

---

- - -

M .

& H.

6-10

tons

. .

Sydney

..

22 1 41,938

. .

33 , 029

1 0 , 557

1 85,524

40 , 2 1 8

5 7, 546

1 0,459

29 ,1

35 48, 166 1 85,524 8,433 25 7. 5

1 80.33

70.030

720

533

1, 029

762

Melbourne 1 5

70,539

678 5 1 ,833

12,506

1 35,556

22 ,6 50

28,722 2,256 2 3 ,466 58,4 6 2 1 35,556

9,03 7

1 95 .7 5

11 1.18

56.796

692 394 1 ,219 693

Ade l aide 6 1 8,762

..

1 ,568

810 2 1 , 1 40

8, 1 24 5 , 35 1 216 6 ,4 49

1, 0 00 2 1 , 1 40

3,523 57 . 5 38 . 8

67.4

77

368

35 0

545 5 1 9

Perth

..

6 1 9,785

..

8 , 630 1 ,90 1 3 0,316

6,587 1 5,655 1

73

5,242 2,659

3 0 ,3 1 6 5,053

7 2.5

45.75

63.103

418 381 663

605

Brisbane 1 3 45,968

..

7 ,1 79 9

,1 5 7

62,304

1 9,585 2

1, 464 8 7 2 14, 465 5,9 1 8

62,304

4 , 793

154.5

86.34

55 . 883

403

365 7 22 653

Tasmania

4

11 ,246 2,325

1 ,043

978 1 5,592 3,828 7 ,268

1 ,08 7 1 ,809 1 ,600

1 5,592 3,898

42.5

26.9

63 . 294 367 329

580 52 0

- -

--

--

---

-

66

308,238 3,003 1 03,282

3 5,909

4 5 0

,4 3 2 1 00 , 992 1 36,006 1 5,063 8 0, 566 117, 8 0 5 45 0 ,432

6 ,825

780.25

489.30

62 .711 577 42 6 921

6 8 0

---

---

M .

& H .

-11-15

t ons

Sydney

..

9

70,352

. .

1 2,734

11 ,659 9 4,745

24,306 2 1 ,080 2,6

01

2 7, 253 1 9,5 0 5 94,745

10,527

1 33 . 75

1 09.

1 8

81 . 629

708

562 868 68 9

Melbourne 5 44,715 2,229 24,555 8 , 922

80,42 1

7 ,454 1 9,8 1 2 92 7

1 3 , 0 7 8 3 9 , 1 5 0 80,42 1 16,084

82 6 1

.95

7 5.54

7 959

5 0 3

1 ,298 666

P e rth

..

} 3 30,167 3,484 1 , 7 4 1 3 5,392 11, 569

8 , 930

278 11,1 2 0 3 , 495 35,392 24,

17 5 63 . 25 4

1. 69

65.9

1 3

1,107 504

849 7 65

Brisbane

. .

---

---

--

-

17

1 45,234 2,229

40, 77

3

22,322

2 1 0,558

43,329 49,822

3,806

5 1, 45 1

62, 1 50 2 10 ,558

12,386

'

2 7 9

212.82

7 6.279

7 55 532 989 69 7

---

---

---

M.

& H.

- Ov

er

1 5 ton

s Sydney . .

11

272,900 53,406

80,894 23,918 43 1 ,

11 8 144,2

11

1 64,036

6,464 5 1 ,402

65,0 0 5 .

431,

11 8 39,193

304 .1 25

272.23

89.512

1,418

1,204

1 ,584 1 ,345

Me l bourne 5 45,888

. .

56,243 4, 7 34

106,865

1 8,464 27 , 525

1 09 26 , 902

33,865

1 06,865

2 1, 373 1 24

92

74 . 193 862 589 1,1 62 7 93

Ade l a ide } 5 53,984 1 9 , 223

6, 1 5 1 7 9,358 26,4

11

37 ,0 48

385 1 5 , 5 1 4 79,358

34,130

1 92.5

1 2 1

.75

63.24

7

820

4 1 2 652 6 52

Brisbane

. .

. .

---

---

- - -

21

372,772 53,406

1 56,360

34,803 6 1 7,34 1 1 89 , 086

228,609

6,958 93,8 1 8 98 , 8 70 6 1 7 , 34 1 29,39 7

620.625

485 . 98

78.304

995 835

1 ,270 1, 06 7

---

---

--

-

S.A.-

11 -15

to n s

. .

Sydney . . 4

50,410 5,507

1 4,549 6,574

77,040

1 6, 01

6 2 7 ,348 35 8 , 8 1 2 24,82 9

77 ,040 1 9 , 260

77.5

54.5

70.322

994 6 7 4 1

,4 1 4 9 5 8

---

---

--

-

S. A. - O ver

1 5 tons

. .

Sydney

..

5 123,255

. .

43,039

1 8,32 1 184,615

69,450

53,375 2 , 3 1 5 34,681 24

,7 94 1 84 , 6 1 5 36 , 923

210

11 4.4

54.475

879

76 1 1 ,6 1 4 1, 39 7

M e lbourne

5

167,540

4,653 43,622 11, 1

67

226,982 65,727 65, 1

73

45 1 38,36 1 5 7 ,27 0 226,982 45,396

321.5

1 87.6

58.351

706

528

1 ,2 10 905

---

---

--

-

10

290 , 795 4,653 86,66 1 29,488 4

11 ,59 7 135, 1

77

118,548 2 , 76 6

73 , 042 82,064

4 11

,597

4 1 , 1 60

53 1

.5

302 56 .82 0

77 4

6 2 0

1 ,363

1, 09 1

---

---

---

Gra

nd T

ota l s

. .

. .

235 1,321,920 68,798 460,982 1 62,198 2,0 1 3,898 544,545 647,3

17

39,6 7 4 352,9 7 8 429,384 2,013,898

8,5 7 0

2,828.34

1,87 7 .875 66 . 394

71 2

560 1 ,0 7 2

84 4

-.! .:a

, ,

78

. . 252. Table 52 .shows the same data as Table 50 grouped accordi!lg to types and capacity. This enables comparisons to be made between the areas concerned .m respect to comparable bakeries. In a broad way t he increase of caoitalization, with corresponding increase in size and wechanization is shown in Column 21, but the divergences between the figures for the capital cities in respect to bakeries of every type are considerable.

253. Although the broad trend is discernible the figures for individual groups frequently show considerable variations from the average for the class whether the class is based on geographic or "type " consideration. The reasons for this variability are numerous: (i) The investigations dealt only with the actual capital of the bakery businesses

concerned. Some master bakers own the land and premises and some are renting them. The values of land and buildings have been included as assets only where the premises are owned by the baker, and in respect to that portion of the property actually used in the conduct of the business. Rent has been included as an item in the cost survey. (ii) It is difficult t o determine the present-day market values of land and buildings.

For the most part, bakeries have been erected economically on moderately priced land, but there is considerable variation in respect to the value of the land as well as in the cost of the buildings. (iii) The bakeries investigated are going concerns and, for the purposes of this survey,

the values appearing in the bakers' records have been used. Manifestly this method could not be expected to lead to uniformity in the result disclosed. (iv) Among the small bakeries a residence frequently forms part of the premises. The estimated value of this residence has been excluded on the ground that it

is an asset outside the business. 254. It follows that a general figure for the capital invested by bakers in their businesses can only be an estimate. In making this estimate the capitalization per ton of flour used per week (i.e. the weekly "through-put") has been adopted as a basis of calculation.

255. On this basis the group capitalization varies in metropolitan areas and Tasmania from £315 to £791 in the small, and from £652 to £1,397 in the larger and more expensive units, while for all country districts the average is about £750 for all units investigated-and these are mostly for the larger bakery businesses.

256. As a matter of comparison the group capitalization per ton of capacity varies from £213 to £643 in the case of small, and from £412 to £1,204 in the larger businesses in metropolitan areas and in Tasmania. 257. An approximate average of capitalization £750 per ton of weekly through-put can be regarded as a rough estimate applying-to the metropolitan areas throughout Australia, and, with even greater variations, the figure of £600 per ton of weekly through-put applies in the districts of Australia beyond the metropolitan areas.

258. These figures have been taken in spite of the possible criticism that they are higher than they should have been, in view of the admitted and recognized excess capacity of the industry. 259. Theoretically the capitalization per ton of capacity should be taken rather than the capitalization per ton of through-put; but having regard to all circumstances, the latter is the fairer basis to adopt when considering the industry as a whole. However, the capitalization per ton of through-put should not be adopted for the purposes of arriving at a fair return on the capital in any individual enterprise because if the bakery has been built on too large a scale for the business it has obtained that is the affair of the person who provided the capital and not the affair of the consumer who purchases the product.

260. The notional figure of £1,000 per ton adopted by Sir Herbert Gepp in his Sydney · report allowed for a margin of capacity beyond that at present in use, and also for an anticipated additional capital expenditure based upon the necessity for improvement in the standard of many of the smaller bakeries in Sydney. It is to be noted that Sydney capitalizations are higher than those in other St ates and that the figures given in this report are approximations to the present actual position of the capitalization of the industry throughout Australia without any allowance for the anticipated and necessary impro:vements allowed for by Sir Herbert Gepp.

261. In determining a fair price for bread in the various centres of Australia, which determinations should be one of the duties of the Boards which the Commission recommends in this report, recognition will need to be given to the actual figures in each particular area. 262. The w0ekly consumption of flour for bread in Australia is approximately 10,000 tons, divided more or less equally between the metropolitan areas and the country

79

. 2?3. Adopting the c_apitalization figure of. £750 per ton of weekly through-put for applicatiOn to the metropohtan areas and Tasmarua, the total reasonable capitalization of the baking industry therein would therefore be £3,750,000. For the provincial towns and cities and all other parts of the Commonwealth, exclusive of the metropolitan areas and Tasmania the capital invested in the industry is £3,000,000 if a figure of £600 per ton of weekly through-put is adopted. The total capital exclusive of goodwill invested in the bread industry is therefore of the order of £6,750,000.

264. The Commission suggests that a margin for interest and profit at the rate of 6 per cent. on the capital legitimately involved in the business would be reasonable, so that if the capital is per ton through-put this margin would represent .16d. per 2-lb. loaf, but, naturally,this margm must vary perhaps between .ld. to . 3d., according to the circumstances of the case.

265. Herbert Gepp, in his report on the bread prices in the metropolitan area of Sydney, made an estimate of the capital invested and allowed 8 per. cent. per annum on this capital to provide for rent of premises, rates and taxes and profit. He pointed out that this rate of 8 per cent. should be reduced as and when the economic position of the industry improved and its stability became more evident. This Commission has adopted the same principle, but has slightly modified the method of calculation in that costs in this report include rent and rates and taxes.

266. Excluding ·the item of goodwill, to which reference has been made above, the Commission has made a survey of the capital costs as compared with the· actual capitalization of the industry and has come to the conclusion that there is no serious over-capitalization except so far as capacity exceeds through-put. The baking industry of Australia has remained,

comparatively speaking, a small-man's industry, and there has been little company formation and very few instances of watering of capital by the issue of bonus shares or otheT means. 267. On the other hand it cannot be overlooked t hat in any re-organization of the industry, in the interest s of the community considerable capital would be required to raise the standard of the bakery establishments to meet reasonable minimum structural necessities, and sooner or later

writing-off in many cases and re-capitalization in other cases will have to be faced.

(d) THE FINANCIAL RETURNS FROM THE INDUSTRY. (i) THE PRICES AcTUALLY RECEIVED FOR THE 2-LB. LoAF. 268. In respect to the prices which the baker obtains for his product, the industry is comparable with many others in which there is free competition. The vendor sells his wares for as much as he can get for them. At times when, and in places where, competition is fierce . the margin of profit is very low. At other times and in other places when conditions of life

are not particularly exacting, and when bakers are able to come to price agreements, profit margins may become wide. Throughout the historical record there have been times at which the general populace has complained of the price of bread and during certain epochs it was customary for governments t o deal with such situations by hanging one or two bakers. Nowadays, the results

of popular clamor are expressed in different ways and governments have occasionally attempted to fix maximum prices for bread. It was done throughout the Commonwealth during part of the war period. In Queensland at the present time, a maximum price for bread is fixed by a Prices Commission. In New South Wales, the Government has also intervened during the last two years with the idea of limiting the price charged for bread.

269. From time to time, in various areas, master bakers' associations (and in some centres master bakers by mutual arrangement) have fixed minimum prices below which bread should not be sold. The degree of success achieved by these price-fixing agreements has varied considerably and has been largely influenced by the intensity of competition.

270. The Commission endeavoured to ascertain the various prices at which bread was being sold during the first half of 1935. With this end in view, a special form was sent to a large number of bakers, including from whom details of working costs had been ascertained. This form asked for a detailed return of the operations of a single week in respect to the number of lo aves sold wholesale, retail, and in the form of relief bread, and the prices obtained for the bread sold

under each category. Table 53 shows for the capital city of each mainland State and for Tasmania, the number of loaves sold by the bakers concerned during the week covered by the return, the percentage which this number of loaves is of the estimated bread consumptio!l of the area concerned, and the percentages of the bread sold by the bakers concerned at varwus

prices as revealed by the returns. 271. The number of cases represented in the Sydney figures is relatively small because .the same point had been investigated in the State Special Inquiry about five :noJ?-ths and it was considered unnecessary again to subject the same individuals to a searchmg mvest1gatwn

on this matter. The bakeries which constitute the sample dealt with in this section were, however, very carefully selected as regards type and geographical location.

TABLE

53.

SHOWING FOR

A NUMBER

OF

BAKERS

IN

EACH METROPOLITAN

AREA AND

TASMANIA

THE

PERCENTAGE OF LOAVES SOLD

AT

A RANGE

OF

PRICES DURING

A WEEK

OF INVESTIGATION

IN

1935.

Estimated

Number

of 2-lb .

Percentage

Percentage of

bread

sold

at

the

various prices

per

2-lb. lo

af

by the

bakers

concerned. which

output

oonsumption

Number

of loaves so

ld

by

of bakers

in

--

of 2-lb. loaves

bak

er ies

in

bakers concerned sample bears

per

week

in

sample. during

the

to

est imated

the

area.•

week cov e

red

consumption

in

Over

2d.

and

Over

2td.

and

Ov er

3d.

and

Over

3td.

and

Over

4d.

and

Over

4td.

and

Over

5d.

and

I Ove< !>id.

and

by the

returns.

area

concerned. 2d.

and

nnder

.

up to

2ld.

up to

3d.

up to

3td.

up to

4d.

up to

4td.

up to

5d.

up to

Std.

up to

6d.

Sydney

..

2,492,215

21

442,516 17.75

..

0.1

22.7

5.5

9.4

17.5

'

18.7

24.7

1.4

Melbourne

..

2,001,343

49

686,043 34.28

..

0.1

2.3

10.0

18.5

15.1

52.6

1.4

..

Adelaide

..

630,701

20

171,850

27.25

..

0.6

7.0

16.4

30.7

45.3

.. ..

..

Perth

..

418,541

29

191,666 45.79

0.2

0.1

..

1.5

2 3.2

9.1

60.7

4.8

0.4

Brisbane

..

609,313

29

263,500

43.25

0.2

..

2.0

8 .6

14.4

9.0

65.6

..

0.2

Tasmania.

..

464,335

29

130,319

28.07

..

10.0

13.1

23.7

49.0

3.8

0.4

..

..

Totals

..

6,616,448

177

1,885,894

28.50

-

-----------

•

These estimates were

obtained

by multiplying

the

appropriate figures

in

Column (3):

Table 32 ,

Section

V. {a)

by 1330

for

Sydney,

Melbourne, Adelaide

and

Perth;

1340

for Brisbane

and

1345 for

Tasmania,

and

by

dividing

each

by

52 to

arrive

at

a

weekly figure .

00 0 ·

- 81-82

I

ShOIMNG

ELB

SOLO DURINC3 ON£ WEEK /NTHE PRIC£ RANGES SHOWN.

W.s_ w.

eo t-----+--+--+---

60

so

40

30

(!j

10

0

'/SBANE; I QLV.

/'0

60

so

40

90

20

/0

0

I

AND OVE"R 0 I

4 4.L s sj

:e - -

3} 4 4J s-

PENCE

riG. 111.

·'

83-84

SHOW#VG

THE PERCENJ?!iGEOr ELB. LOAVES SOLD DURING ONE \IVEEK /NTH£ PRIC£ RANGES SHOWN.

60 t------t-----t----t-----tr----t------1f---+--

40 t------t---t----t-----t---t-------t----t--

0

1 I I I

HOBARr ANO

(!j 7?1S.

" u q: /0 t-------1-----t--

5V t----+-----+-

. 40

I

ANDOVER 0 I

FIG. IV.

36'

85

272. For comparative purposes the data for each capital city have been set out in Figures III. and IV., which show that in most cities between half and two thirds of the bread is sold at one price or within a price range. The bulk of the remainder is sold at lower prices. · 273. The severe competition which was in progress in Sydney .and Adelaide at the time

of the inquiry is shown by the lack of uniformity in the prices obtained for bread sold in retail deliveries. 274. The results of the investigations, whilst approximately correct, are not necessarily a perfect statement of the facts, because there was no means of ensuring the complete accuracy

of the sample and, as already stated, the investigations included a rather large proportion of returns from the larger bakeries. 275. The wide range of prices at which bread is sold in each city is at first sight somewhat surprising. Some of the low-price sales are due to price-cutting for the retail trade, but a great

deal of it is normal contract production. Table 54 shows for each price group tmder consideration the percentages of bread sold at prices within the group when segregated under the four heads­ Retail, Wholesale, Retailed at the baker's own shop or bakehouse, and Relief. TABLE 54.

- Wholesale. Retail. Retailed Relief. Total. Wholesale. Retail. Retailed Relief. Total. own shop. own shop.

% % % % % % % % % · %

SYDNEY. MEI.BOURNE.

2d. and under .. .. . . .. .. . . . . . .. .. ..

Over 2d. and up to 2!d. .. 0.1 .. .. .. 0.1 0.1 .. .. .. 0.1

Over 2!-d. and up to 3d. .. 22.7 .. .. .. 22.7 2.3 . . .. .. 2.3

Over 3d. and up to 3!d. . . 5.2 .. 0.3 .. 5.5 9.8 0.1 0 . 1 -. .. 10.0

Over 3!-d. and up to 4d. . . 7.2 2 . 1 0.1 .. 9.4 15.7 2.0 0.3 0.5 18.5

Over 4d. and lip to 4!d. . . 7.0 8.6 0.3 1.7 17.6 0 . 7 13.7 0 .6 0.1 15.1

Over 4!d. and up to 5d. . . .. 18.5 0 . 1 0.1 18.7 .. 52.4 0 .2 .. 52.6

Over 5d. and up to 5!d. . . .. 24.6 .. .. 24.6 .. 1.4 .. .. 1.4

Over 5!d. and up to 6d ... .. 1.4 .. .. 1.4 .. . . .. .. ..

42.2 55.2 0.8

I

1.8 100 . 0 28.6 69.6 1.2 0.6 100.0

-

ADELAIDE. PERTH.

2d. and under .. .. .. .. .. . . 0.1 . . .. .. 0.1

Over 2d. and up to 2!d. . . 0.6 .. .. .. 0.6 0.2 .. .. .. 0 .2

Over 2!-d. and up to . . 6.0 0.4 0.6 .. 7.0 .. .. .. ..

Over 3d. and up to 3!d. . . 15.4 0.1 0.9 .. 16.4 1.5 .. .. .. 1.'5

Over 3!d. and up to 4d. . . 1.4 14 . 1 3.2 12.0 30.7 22 .3 0.1 .. 0 . 8 23.2

Over 4d. and up to 4!d. . . .. 45.3 .. .. 45.3 3 .7 4.4 0 .7 0.3 9.1

Over 4!d. and up to 5d. . . .. .. .. .. . . 0 . 7 59.8 0.2 .. 60.7

Over 5d. and up to 5!d. . . .. .. .. .. .. .. 4.3 . . .. 4.8

Over 5!d. and up to 6d ... .. .. .. ..

I

. . . . 0.4 . . .. 0.4

23.4 59.9 4 . 7 12.0 100 . 0 28.5 69.5 0.9 1.1 100 .0

BRISBANE. TASMANIA.

2d. and under .. 0.2 .. .. .. 0.2 .. . . . . .. . .

Over 2d. and up to 2!d ... .. .. .. .. 7 .7 .. 1.5 0.8 10.0

Over 2!d. and up to 3d. . . 2.0 .. .. .. 2.0 5.7 2.3 4.3 0.8 13 . 1

Over 3d. and up to 3!-d ... 8.3 .. 0.3 .. 8.6 9 .0 12 .0 2.6 0 . 1 23.7

Over 3!-d. and up to 4d. . . 13.6 0.5 0.2 0.1 14.4 0.1 47 .5 1.4 .. 49 .0

Over 4d. and up to 4td. . . 5.3 3.1 0 .5 0 . 1 9.0 .. 3.2 0.6 .. 3 .8

Over 4!d. and up to 5d. . . 0.1 64.2 0.9 0.4 65.6 .. 0.4 .. .. 0.4

Over 5d. and up to 5td. . . .. .. .. .. . . .. . . .. . . . .

Over 5!d. and up to 6d. . . .. 0 . 2 .. .. 0.2 .. . . .. .. . .

29.5 68.0 1.9 0.6 100 .0 22.5 65.4 10.4 1.7 100.0

276. The wholesale prices call for some comment because, although it mayseem that some bread is being supplied at very low prices, there are special features in the contract business which sometimes make it a particularly satisfactory form of business. These are-fa) It may suit the special circumstances of a baker to accept a lower figure for part

of his product, especially when he can increase his output without extra cost except for the raw rna terials ; (b) the baker can frequently make savings in costs when a number of loaves is delivered at one time to one purchaser. The simplest t ype of contract is that which

exists between a baker and an institution such as a hospital or school. In some contracts with shops, however, several deliveries' during the day are demanded and the attractiveness of the contract is reduced; (c) contracts for large supplies on a firm basis with specified times of delivery are

particularly valuable provided they fit in with the general organization of the working of the business;

•

86

(d) in certain contracts the purchasers are prepared to accept a relatively high percentage of " stale " bread ; (e) most contracts involve no risk of bad debts ; (j) the standard hours of labour make a considerable difference in this connexion. In

Melbourne, where the bread is baked during the night, much of the delivery to private houses can be carried out during the early morning before some of the cafes and shops are prepared to receive their supplies . In Sydney and other cities, where the bread deliveries must begin later, there is less opportunity for an economical arrangement of the carters' work in respect of wholesale and retail trade. ·

277. Some bakers make a practice of competing extensively in the wholesale trade, whilst others sell most or all their bread on a retail basis. To some extent the type and size of the bakery influence the policy which is adopted by its management; consequently the price-range data have been segregated in Table 55 according to the type and size of the bakeries concerned. In order to avoid the risk of revealing any confidential data the variations have been shown by means of a comparative statement of the average prices received for the whole output by the bakers in each group. As the investigations were not quite simultaneous in the various regions the cost

of flour in the 2-lb. loaf (assuming that it had been bought at the declared price) at the time when this specific inquiry was made, is also shown. TABLE 55.

SHOWING THE AVERAGE PRICES IN PENCE PER 2-LB LOAF RECEIVED BY THE VARIOUS TYPES OF BAKERIES DURING ONE WEEK'S OPERATIONS IN 1935.

Class.

Wholesale Retail delivered . . . .

Retail own shop and bakehouse Relief

All classes ..

Wholesale Retail delivered . . . .

Retail own shop and bakehouse Relief

All classes ..

Wholesale Retail delivered . . . .

Retail own shop and bakehouse Relief

All classes ..

Wholesale Retail delivered . . . .

Retail own shop and bakehouse Relief

All classes ..

Wholesale Retail delivered . . . .

Retail own shop and bakehouse Relief

All c) asses ..

holesale . . . .

etail delivered .. ..

w R R R

etail own shop and bakehouse elief . . . . . .

All classes .. ..

H and 1-5 I

tons.

d.

..

..

..

..

..

3.859 4.866 4 .347 4.033

4.688

3.226 4.305 3 .210 3.635

3.845

4.022 4.919 4.586 4.024

4.749

3.547 5.000 3.674 4.541

4.297

3 .246 4.040 3.944 3 .. 090

3.838

Machine and Hand.

1-5 t ons. 6-10 tons. 11-15 tons. Over 15 tons.

d. d. d. d.

SYDNEY.

3.404 3.376 3 .227 3.424

5 . 191 5.237 5 .031 5 .069

4 .500 3. 945 3 . 978 3 .976

4.257 4 .298 4.490 4.243

4 . 607 4.684 4 .353 4 .290

MELBOURNE.

3 .437 3.722 3.795 3.785

4 .742 4.754 4.814 4.820

3 . 977 4.458 4 . 827 4.500

3.994 4.005 3 .880 3.958

4.530 4.599 4.628 4.550

ADELAIDE.

3 .500 3.464 .. 3 .279

4.479 4.423 .. 4.302

3.915 3. 925 .. 3.650

3.662 3.635 .. 3.636

4 .207 4.098 .. 3.918

PERTH.

4.082 4 .063 .. ..

4.918 4.985 • ..

4.719 4 .536 .. ..

4.143 4.063 .. ..

4.713 4 . 644 .. . .

I

BRISBANE.

4.018 3 .772 .. ..

I 4.990 4 .959 .. .. 4.759 4.737 • • 4.444 4.455 .. .. 4.804 4 .634 .. ..

TASMANl.A (HOBART AND LAUNCESTON).

2.753 2 .925 .. ..

3.651 3.971 ..

• 2.995 3.215 ..

2.573 2.773 .. ..

3 .321 3 .642

I

.. ..

• Not avallable for publication.

I Cost of fl our Semi-auto- in a 2-lb. matic-over All types. loaf at date 15 tons. returns were prepared. d. I d. d. 3.694 3.436 2.018

6.321 5.125 2.018

3. 998 2 .018

4 .250 4.279 2.018

4.528 4.388 2.018

3.622 3.670 2 .035

4.692 4.763 2.035

4.060 4.294 2.035

4.000 3.982 2.035

4.197 4.440 2.035

.. I 3. 343 2.105

. . 4.371 2. 105

.. 3.726 2.105

.. 3.639 2.105

. . 4.012 2.105

.. 4.019 2.184

• 4.935 2.184 .. 4.598 2.184 .. 4.073 2.184 . . 4.662 2.184

.. 3.795 2.215

. . 4.972 2.215

.. 4.536 2.215

.. 4.406 2 .215

. . 4.613 2.215

.. 3.018 1.701

.. 3.904 1.701

.. 3.268 1.701

.. 2. 192 1.701

.. 3.620 1.701

87

(ii) THE MARGIN OF PROFIT PER 2-LB. LoAF IN :METROPOLITAN AREAS AND IN TAsMANiA.

278. The preceding paragraphs have demonstrated the divergences bet ween the prices, averaged over the full output, which bakers receive and the prices which the ordinary householders pay for the loaf either delivered to the ho1ne or bought over the counter. These prices paid by the householders determine in the public mind what is known as " the price of bread. "

279 . The Commission has prepared tabulated comparisons bet ween both-(a) the weighted average of costs of production, and t he weighted average of prices received in respect to certain selected groups of bakeries, and (b ) the cost of production and the weighted average price received in t he case of each

of a larger number of individual businesses in t he n1etropolitan areas.

280. The average costs are based upon the results of the Commission's investigation into the costs of production.

281. The prices received are based upon returns covering one wee k during the second quarter of 1935-not necessarily the same week in different areas.

282. In the case of (a), the information supplied covers the number of loaves sold wholesale, retail, contract and "for sustenance" and the respective prices received.

. 283. In the case of (b), the information_ supplied covers only the weighted average price recmved per 2 lb. loaf sold, as some of the master bakers concerned do not keep the more detailed records regularly.

284. Table 56 refers to (a) above:-

TABLE 56.

SURVEYING THE AVERAGE MARGIN BETWEEN COSTS AND RECEIPTS IN METROPOLITAN AREAS AND I N TASMANIA .

- I Average cost per 2-lb . Output of bakeries as Number of businesses per centage of estimated loaf, assuming fl our at Weighted average Average m argin Metropolitan Area. which supplied total consum ption average of declared price r ecei ved per per 2-lb . loaf. information. in the area . prices over 2-lb. loaf. previous three months. % d. d. d.

Sydney .. . . 21 17 .75 4 .595 4.388 - .207

Melbourne . . .. 49 34.28 4.331 4.440 + .109

Adelaide . . . . 20 27 . 25 4.146 4.012 - .134

Perth . . .. 29 45 .79 4 .711 4 . 662 - .049

Brisbane . . . . 29 43.25 4.793 4.613 - .180

Tasmania (State) .. 29 28.07 3.706 3.620 - .086

285. The average cost of flour in the 2 lb. loaf when calculated on the basis of the " declared price " over the previous three months in the areas concerned was as follows :-Sydney 2. 018d. Melbourne 2. 035d.

Adelaide 2 . I 05d. Perth . . 2 . 184d.

Brisbane 2 . 215d. Tasmania 1. 70ld.

286. Although the number of businesses in Sydney which supplied returns is comparatively less than other areas, the Commission is satisfied t hat t he information received represents a fair sample of the industry. ·

287. Table 57 refers to (b) above. Its results are set out in graphic form in Figure V. Bakers who were obtaining supplies of flour at prices below the average declared price were in a better position than is here shown . This diagram also illustrates the difference which would be brought about by a change of 16s. 6d. per t on in t he price paid for flour. The variations between the

average declared price and actual prices have already been dealt wit h in ectio n V. (d) (i). Recent checks in Sydney and Melbourne have indicated t hat the margin bet ween the e prices is as wide, and possibly somewhat wider, than it was in 193 2- 33.

88

TABLE 57 .

SHO WING THE MARGINS BETWE EN THE COST AND PRICE RECEIVED PER 2-LB. LOAF-IN THE CASE OF INDIVIDUAL BAKiERS-MAY-JULY, 1935.

METROPOLITAN BAKERIES IN SYDNEY.

Cost with fl our ad justed Margin bet ween weighted average price and cost.

to average declared price Weighted average

Bakery group and tonnage. £11 3s. 9d. per t on net price received.

(less bags) J une Quarter, 1935.

Plus. Minus.

d. d. d. d.

Hand-1-5 tons . . . . . . 4.730 5.000

.270 ..

5.221 5.000 .. .221

4.992 4.638 .. .354

Machine and hand-1-5 tons . . . . .. 4.522 3.750 . .

.772

5.174 4.875 .. .299

4.626 3.800 .. .826

4.632 4.660 .028 ..

4.621 4.040 .. .581

4.335 4.250 .. .0815

4.953 4.770 .. .183

5.081 5.450 .369 ..

6-10 tons . . . . . . 4.509 4.006

.. .503

4.554 4.681 .127 ..

4.997 4.841 .. .156

4.435 4.820 .385 ..

4.786 5.282 .496 ..

5.099 4.750 .. .349

4.429 3.750 .. .679

4.216 3.430 .. .786

5.008 3.920 .. 1.088

5.135 4.540 .. .595

4.509 3.550 .. .959

4.426 3.700 .. .726

4.591 4.400 .. .191

4.521 4.292 .. .229

4.971 4.929 .. .042

4.966 5.351 .385 ..

3.821 3.750 .. .071

11-15 tons . . . . . . 4.865

4.802 .. .063

4.565 3.900 .. .665

4.414 4.750 .336 ..

4.383 4.500 .117 ..

4.410 3.800 .. .610

4.988 4.438 .. .550

4.762 3.662 .. 1.100

Over 15 tons . . . . .. 4.636

3.992 .. .644

4.524 4.189 .. .335

4.689 3.847 . . .842

4. 973 4.600 .. .373

5.074 4.456 .. .618

4.739 5.050 .311 ..

4.485 4.070 .. .415

4.550 4.160 .. .390

Semi-Automatic- 11-15 to ns . . . . .. 4.471

3.802 .. .669

4.478 4.750 .272 ..

4.410 4. 250 .. .160

Semi-Automatic and Automatic-Over 15 tons . . . . . . 4.733

{).060 .327 . .

4.589 4.050 . . .539

4'.320 3.620 . . .700

4.766 4.611 . . .155

89 3

TABLE No . 57-continued .

METROPOLITAN BAKERIES IN MELBOURNE.

Cost with fl our adjust ed Margin between weigh t ed a verage price and cost .

Bakery group and tonna ge.

t o average declared price Weighted average £11 5s. 7d. per ton net (l ess bags) June Quarter , price r eceived.

1935. Plus. Minus.

d. d. d. d.

Hand-1-5 tori s . . .. . . 4.251 4.870 .619 . .

4.060 4.562 .502 ..

3 .996 4.810 .814 ..

3.657 4.646 .989 ..

4 .013 4.550 .537 ..

- 5 .309 4.968 .. .341

3. 969 4.810 .841 ..

4.054 3 .930 .. . 124

4.577 4.790 .213 ..

4.887 4. 704 .. .183

4.778 4.563 .. . 215

Machine and Hand- 1-5 tons . . 4 .646 4.265 .. . 381

4.335 4.444 .109 ..

5 .292 4.750 .. .542

5.037 4.400 .. .637

3 .865 4.060 . 195 ..

4.919 4.617 .. .302

..: 4.848 5 .000 .152 ..

4.372 4.667 . 295 ..

Machine and Hand- 6- 10 tons . . 3 .822 4.508 .686 . .

4 .220 4.470 . 250 ..

4.329 4.650 .321 ..

4.544 4.980 .436 ..

4.475 4.490 .015 ..

4 .342 4.410 .068 ..

5.087 4.730 .. .357

4.385 4.356 . . .029

4 .614 4.641 .027 ..

4 .437 4.903 .466 ..

4.645 4.450 . . .195

4.221 4.550 .329 ..

4 .259 4. 890 .631 ..

4. 706 4.549 . . .157

4.479 4.562 .083 ..

Machine and Hand- 11- 15 tons . . 4 .440 4.809 .369 ..

4.302 4.510 .208 ..

4 .415 4.796 .381 ..

4.959 4.480 .. .479

4.192 4 .600 . 408 ..

Machine and Hand-O;ver 15 tons . . 4 .686 4.544 . . .142

4.531 4.555 .024 ..

3 .707 4.230 .523 ..

4 .354 4.526 . 172 . .

4.182 4.876 . 694 ..

Semi-automatic and Automatic- Over 3 .940 4.135 . 195 ..

15 to ns .. . . . . . . 3.779 3.596 . . . 183

4.673 4.687 .014 . .

4.322 4.480 . 158 ..

4. 235 3.981 .. . 254

F.4.-03.- 6

90

i. I

f·

i

I

TABLE No. 51-continued.

METROPOLITAN BAKERIES IN ADELAIDE.

Cos t with flour adjusted Margin bet ween weighted average price and cost,

to a.verage declared price Weighted average B akery gr oup and tonnage. £11 13s. 4d. per tori net (less bags ) J une Quarter, price received. 1935. Plus. Minus. d. d. d. d.

Hand-1-5 tons . . .. . . 4.053 4.090 .037 . .

4.724 4.320 . . .404

4.006 3.470 .. .536

4.479 3.536 . . .943

Machine and Hand-1-5 tons .. 4.363 4.304 . . .059

4.599 4. 134 .. .465

4.322 4.061 .. .261

4.736 4.383 .. .353

4.585 4.075 .. .510

Machine ·and Hand-6-10 tons .. 4.098 4.083 . . .015

4.344 4.058 .. .286

4.347 4.304 .. .043

achine and Hand - Over 15 tons .. I

4.233 3.508 . . .725

4.363 4.114 .. .249

M

METROPOLITAN BAKERIES IN PERTH.

Cost with flour adjusted Margin bet ween weighted average price and cost .

. ' to average declared price Weighted average Bakery group and tonnage. £12 2s. 1d. per t on net price r eceived. (less bags) June Quarter , Plus. Minus. 1935. -------- -d. d. d. Hand-1 tons . . .. . . 4.849 4.951 .102 . . 5.747 4.797 .. .950 . . 5.396 4.956 .440 .. '. 4.024 4.655 .631 .. 5.089 4.983 .. .106 4.705 4.582 .. .123 4.770 4.605 .. .165 4.234 4.823 .589 .. 4.642 4.569 .. .073 Machine and Hand- 1-5 tons . . 4.039 4.768 .729 .. 4.384 4.751 .367 .. 4.408 4.939 . 53 ( .. 5.148 4.733 .. .415 4.747 4.562 .. .185 4.931 4.707 .. .224 4.959 4.'733 .. .226 Machine and Hand-6-10 tons .. 5.461 4.358 .. I 1.103 4.815 5.001 .186 .. 4.940 4.699 .. .241 4.338 4.501 .163 .. 4.720 4.849 .129 .. 4.534 4.551 . 017 .. Machine and Hand-11-15 tons . . 4.9.44 4.655 .. .289 4'.506 4.693 .187 ..

91

TABLE No. 57-continu.ed.

METROPOLITAN BAKERIES IN BRISBANE.

I Cost with flour adjusted Margin betwee n we ighted average price and cost.

Bakery group and tonnage.

t o average de clared price Weighted a verage £12 83. 4d. per ton net price received. (less bags) June Quarter, 1935. Plus. Minus. d. d. d. d.

Hand-1-5 tons .. . . . . 4.998 4.915 . . .083

5.619 4.936 .. .683

4.617 4.023 .. .594

2.938 3.238 .300 ..

5.477 4.979 .. .498

4 .706 4.930 .224 ..

Machine and Hand-1-5 tons .. 4.730 4.963 .233 . .

4.989 4.962 .. .027 - 5.800 4.970 .. .830 4.772 4.827 .055 .. 4.259 4.919 .660 .. 4 .139 3.989 .. .150 5 .1 74 4.936 .. .238 Machine and Hand-6-JO tons . . 5.415 4.961 . . .454 4.902 4.945 .043 .. 5.030 3.993 .. 1.037 5.230 4.988 .. .242 5.694 4. 767 .. .927 5.168 4. 927 .. .241 4.150 3.828 .. .322 4.693 4.918 .225 .. 4.755 4.947 .192 .. 4.433 4.651 .218 .. 4.704 4.791 .087 .. 4.676 4.911 .235 .. 4.377 4.878 .501 .. Machine and Hand-11-15 tons .. 4.323 4.385 .062 . . :Machine and Hand_:_Over 15 tons . . 5.007 4.530 .. .477 4.841 I 4.697 .. .144 METROPOLITAN AND CouNTRY BAKERIES IN TASMANIA. Cost with flour adjusted Margin between weighted average price and cost. to average decl:ued price Weighted average Bakery gr?up and tonnage. £9 lls. 5d. per ton net price received. (less bags ) June Quarter , 1935 . Plus. Minus. d. I d. d. d. H and-1-5 tons .. . . . . 3.744 3.750 .006 . . . 5.405 3.937 . . 1.468 4.399 3.928 .. .471 3.935 4.398 .463 .. 4.146 3.837 . . .309 4.605 4.172 . . .4:33 3.361 3.099 .. .262 3.911 3.731 .. .180 4.467 3.490 .. .977 4.212 3.740 .. .472 3.556 3.905 .349 .. 3.688 4.625 .937 .. 3.524 3.701 .177 .. M achine and Hand-1-5 tons . . 4.099 3.043 .. 1.056 2.946 2.500 .. .446 4.587 3.544 .. 1.043 3.423 3.488 .065 .. 3.131 2.855 .. .276 3.474 3.257 .. .217 3.273 3 .1 25 .. .148 2.950 3.200 . 250 .. 3.152 3.667 . 515 .. Machine and Hand-6-10 tons . . 2.762 2.772 . 010 .. 3.886 3.920 .034 .. 3.721 3.804 . 083 .. 4.148 3.920 .. .228

92

288. Table 58 shows an analysis of the margins as detailed in the preceding table. TABLE 58.

PERCENTAGE OF CASES SHOWING-I Profit per loaf of- Loss per loaf of-

Metropolitan Area.

I Mo" thon 0 . 25d. I than 0 . 25d. Between 0 . 25d. Less than 0. 15d . Less than 0 .15d. Between 0 .15d. and 0.15d. and 0. 25d. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent.

Sydney .. . . . . 18.00 . . 6.00 8.00 14.00 54.00

Melbourne .. .. . . 36.74 16.32 14.28 6.12 10.21 16.33

Adelaide . . .. . . . . . . 7.14 21.43 7.14 64.29

Perth . . . . .. 20.83 12.50 12.50 12.50 20.83 20.84

Brisbane . . . . .. 10.34 20.69 13.80 10.34 13.80 31.03

Tasmania (State) . . .. 15.38 7.69 19.24 3.84 11.54 42 .31

In Adelaide and Sydney, and to a lesser extent in Brisbane and Tasmania, a large proportion of bakers were not only failing to make any profits or interest on their own capital invested in their businesses but were actually losing money. However, it must be appreciated that this survey is to be regarded only as a rapid birdseye view of the industry at a given period when intense price competition prevailed in various areas.

Table 59 gives a similar analysis of the margin assuming that the bakers were using flour for which they had paid 16s. 6d. per ton less than the " declared " price :- · TABLE 59.

Profit per loaf of- Loss per loaf of-

Metropolitan Area.

Bet we en 0.25d. More than 0. 25d. Less than 0 .15d. Less than 0. 15d. Between 0 .15d. More than 0. 25d. and 0 . 15d. and 0.25d.

Per cent. Per cent. Per cent. Per cent. Per cent. Per cent.

Sydney . . . . .. 22.00 2.00 8.00 16.00 10.00 42.00

Melbourne .. . . .. 55.10 12.24 4.08 10.20 8.16 10.20

Adelaide . . . . .. . . 14.28 14.28 14.28 14.28 42.85

Perth . . . . .. 41.66 4.16 12.50 25.00 . . 16.66

Brisbane . . .. . . 31.03 17.24 10.34 10.34 3.45 27.58

Tasmania (State) . . .. 23.07 19.23 3.84 19.23 3.84 30.77

289. During the general economic depression profit margins have frequently been low, and at times non-existent, for large sections of the baking trade, but it is not to be assumed that this condition has been either general or continuous. The history of the industry in Sydney during the last two years is illustrative. In the first half of 1934, owing to competition and the complications introduced by the flour tax of £4 5s. per ton, financial results were, on the whole, unsatisfactory. With the lifting of the flour tax on 1st June, 1934, and a diminution of price-cutting, the results for the greater part of the second half of 1934 were satisfactory. At the beginning of 1935, price-cutting intensified and the results were unsatisfactory except for

a period of about four weeks shortly after the issue of the Report of the State Royal Commission about the end of March. Thereafter the position became worse until in August/ September a number of the larger bakers cut the "cutter" and bread was sold as low as Is. 6d. per dozen 2lb. loaves delivered. In August, a company called Bread Manufacturers Limited was formed and

most of the master bakers in Sydney, numbering over 300, joined it. Under its by-laws autocratic power was given to a committee to impose heavy penalties for breaches of agreed prices. At the time of writing this Report, results are satisfactory and profitable prices are being obtained.

(iii) THE MARGIN oF PROFIT PER 2 LB. LoAF IN THE RuRAL AREAS oF MAINLAND STATES.

290. The profit margins in the extra-metropolitan districts of the mainland States show considerable variations. The number of cases which could be satisfactorily investigated was relatively small, but the results set out in detail in Table 60 show that, in general, the profit margins were larger than in the cities and, in a number of cases, frequently in well-defined localities, very satisfactory. In certain areas where cutting was taking place losses were in evidence. The results. of the extra-metropolitan survey are shown in Table 60.

93 3

TABLE 60.

STATEMENT SHOWING THE MARGINS BETWEEN INDIVIDUAL "EXTRA-METROPOLITAN" BAKERS' COSTS AND PRICES RECEIVED PER 2-LB. LOAF-MAY-JULY, 1935.

l.Jiatrlct.

1 .. . . . .

2 . . .. . . . .

3 . . .. . . . .

4 .. . . . . . .

5 . . .. . . . .

6 . . .. . . . .

7 . . .. .. . .

8 .. .. ..

9 .. .. .. ..

11 . . .. .. . .

12 . . . . . . . .

13 . . . . . . . .

14 . . . . . . ..

15 . . . . . . . .

17 . . . . . . . .

- -·-·--· - -

District.

1 . . . . . . .. .

2 . . . . . . . .

3 . . . . . . . .

5 . . . . . . . .

6 . . . . . . . .

7 . . . . . .

<

8 . . . . . . ' .

9 . . . . . . . .

NEw SouTH WALES.

Cost with fl our a djusted to average declared price £11 3s. 9d. per ton net (less bags) June Quarter,

1935.

d.

5.291 5.156 6.020 3.868 4.849 3.844 4.926 4.835 5.370

6.123 4.584 4.381 4.430 4.254 4.041 4.409 4.451

4.292 4.642 4.228 4.186 3.941

4.191 4.691 4.788 4.859 4.748 5.014 5.249

4.709 4.948 4.640 3.860

4.726 4.560 -- - .. --- --

VICTORIA.

Cost with flour adjusted to average declared price £11 5s. 7d. per ton net (less June Quarter,

1935.

d.

5.008 5.246 5.029 4.888

5.134 4.887 4.134 4.449 4.293 5.099

4.949 4.917 4.252 5.443 3.520 5.336 5.257

5.985

Weighted averaie price received.

d.

5.870 5.960 4.700 4.000 3.950

5.240

5.713 5.320 5.310 5.350

4.890 4.950 4.841 5.170

4.976 5.000 4.006 4.864 5.034 5.104 5.084

4.760 4.736 5.004 4.900

4.978 4.820 4.471 4.855 4.839 5.000 5.300 '5.250

Weighted average price received.

d.

5.31 5.5 5.3 5.42 5.45 5.46

4.46 5.23 5.37 5.13 5.47 5.46 5.42

5.47 4.59 5.42 5.22

4.66 .

I

l

Margin between weighted average price and cost.

PlUJ.

I· MinUJ.

d. d.

.579 . .

.804 . .

. . 1.320

.132 . .

.. .899

1.156 . .

.481 . .

.405 ..

.. . .

.958 . .

. . .803

.726 . .

.969 ..

.460 ..

.696 ..

.800 ..

.761 ..

.525 ..

.708 ..

.. . 636

.636 ..

. 848 ..

1.163 ..

. 893 ..

. 069 ..

.. . 052

.145 ..

. 152 ..

.. . 036

.. .429

.. .238

.. .093

. 199 ..

1.140 ..

.574 ..

.690 ..

Margin between weighted average price and cost.

Plus. Minus.

d. d.

.302 ..

.254 ..

.271 ..

.532 ..

. 316 ..

. 573 ..

.326 ..

. 781 . .

1.077 I .. .031 .. .521 . . .543 .. 1.168 .. . 027 . . 1.070 .. .084 .. .. . 03 7 1.325

District.

1 . . . . . . . .

2 . . . . . . . .

3 . . . . . . . .

4 . . . . .. . .

5 . . . . .. . .

6 . . . . .. . .

7 . . . . .. . .

District.

I

2

3

District.

1 . . . . .. . .

3 . . . . .. . .

4 . . . . .. . .

5 . . . . .. . .

6 . . . . . . ..

9 . . . . . . ..

11 . . . . .. . .

12 . . . . .. . .

94

TABLE

SouTH AusTRALIA.

Cost with fl our adjusted to average declared price Weighted average £11 13s. 4d. per ton net price received. (less bags) June Quarter, 1935. d. d.

4.240 4.5

4.488 4.75

4.976 4.0

4.930 4.34

4.362 4.75

4.399 4.5

4.393 4.8

WESTERN AusTRAiriA.

Cost with flour adjusted t.o average declared price £12 2s. ld. per ton net

(less bags) .Tunc Quarter , 1935.

d.

4.870 5.390 4. 862 4.383 4.766

Weighted average price received.

d.

5.023 5.551 5.565 5.613 5.446

Q UE E NSLAND.

Cost with flour adjusted to average declared price Weighted average £12 Ss. 4d. per ton net, price rece ived. (less bags) June Quarter, 1935. d. d.

4.562 4.97

4.324 4.8

5.307 5.39

5.042 5.38

5. 81 8 5.4

4.527 4.49

5.223 4.92

5.032 5.17

4.649 5.5

4. 885 4 .94

4.791 5.48

Margin between weighted a verage price and cost.

Plus. Minus.

d. d.

.260 . .

.262 . .

. . .976

. . .590

.388 . .

.101 . .

.407 . .

Margin between weighted average price and cost.

Plus.

d. .153 .161 .703 1.230

.680

Minus.

d.

Margin bet ween weighted average price and cost.

Plus. Minus.

/

d. d.

.408 . .

.476 . .

.083 . .

.338 . .

.. .418

.. .037

.. .303

.138 . .

.851 . .

.055 . .

.689 . .

Table 61 shows an analysis of the margins detailed in Table 60. 61.

PERCENTAGE OF _ CASES SHOWING:-Profit per loaf of- Loss per loaf of-

State.

More t han 0 · 25d. Between 0 · 25d. Less t han 0 · 15d. Less than 0 ·15d . Between 0 ·15d. More than 0 · 25d. and 0·15d. and

Per cent. Per cent . Per cent. Per cent. Per cent. Per cent.

New South Wales . . .. 60 .00 5. 71 8.57 8.57 .2.86 14 .29

Victoria . . . . .. 72. 23 . . 16.67 5 .55 . . 5.55

South Australia . . .. 57 .15 14.28 . . . . . . 28.57

West Australia . . .. 60. 00 40.00 . . . . . . . .

Queensland . . . . . . 45 .46 . . 27.27 9.09 . . 18.18

(iv) A SuRVEY OF P R OFIT AND L oss AccouN'l'S oF CERTAIN BAKERIES DURING THE YEARS 1931, 1932 AND 1933. 291. The absence of complet e an d· reliable records of the business operations of many bakeries rendered the analytical survey of their fin ancial progress during the last few years particularly difficult . Whereas it proved practicable t o obtain accurate costings in the cases of 345 bakery businesses only 154 had records which enabled a financial survey of the transactions of previous years t o be made. Of these, 128 were located in capital cities, 24 in provincial cities and country centres in. the mainla.nd Stat es and t wo in Ta&mal).ia ,

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IND

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the

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97

292. In all cases the figures refer to profits or losses of the business as a whole and not necessarily to the bread section only ; although bread baking was the main line of activity. A detailed analysis did not therefore reveal as much information as was desired. However a tabulated dissection of the data obtained from the 154 bakeries supplied the following information:-

Twelve businesses showed increased profits from 1931 to 1933. · Forty-seven businesses showed a fairly consistent level of profit over the years 1931, 1932, 1933.

Twenty-three businesse1:3 showed a decline in profits during the same period, and for three or four years previously. Three businesses showed a stationary position with little profit or loss during the • years 1931, 1932 and 1933. ·

Forty-nine businesses showed losses consistently during the years 1931, 1932 and 1933. Twenty businesses showed small profits in 1933 as c01npared with losses in 1931 and/ or 1932. ·

(e) SUl\1:MARY OF THE FINANCIAL POSITION OF THE I NDUSTRY.

293. A critical examination of all tbe available information leads to the following conclusions :-294. For a considerable number of years prior to the advent of the economic depression in 1929-I930, the bread industry of Australia yielded results which were, on the whole, reasonably profitable. In a number of cases, the profits were considerable and such as to render the industry an attractive medium for investment of private capital. During this period, businesses frequently changed hands at prices which included considerable sums for goodwill. From 1929-1930 onwards, the position changed and became less satisfactory. In the capital cities and certain

country centres competition became much more intense. Roughly, the intensity of competition and price-cutting was proportional .to the size of the population in each centre. As a result, serious difficulties developed and caused a large reduction in the profits of the industry as a whole, some individual units being more· seriously affected than others.

295. During the past five years, the situation has been the net financial results varying rapidly from time to time in different localities. Generally speaking, it can be said that the majority of the bakers in the capital cities of the Commonwealth have suffered serious reductions of net income and, in a number of definite losses during varying of

these five years. 296. Nevertheless, in some of the better districts o£ the main capital cities well organized and managed individual businesses have suffered comparatively little loss, except for short of time when the aotivities of price-cutters have been extended into their territories.

297. In provincial cities and towns, the industry showed a somewhat better situation than in the metropolitan areas, but in some centres the same ruthless competition existed. 298. In country districts the intensity of competition is generally much less and no critical position exists, or has existed, in the bread industry in these districts except in special

cases and for particular reasons. To some extent the fact that most country bakers are also pastrycooks and tea-room proprietors accounts for the better economic position of the baking industry in country centres.

•

SECTION VI.-FACTORS GOVERNING THE ECONOMIC STABILITY OF THE INDUSTRY.

PAGE.

(a) THE POSITION OF THE INDUSTRY AS DESCRIBED BY THOSE ENGAGED IN IT 101

(b) COMPETITION WITHIN THE INDUSTRY 101

(C) PRICE-CUTTING IN ITS RELATION TO PROFIT MARGIN IN THE BREAD-BAKING TRADE 102

(d) METHODS BY WHICH THE LEGAL ENACTMENTS GOVERNING EMPLOYMENT ARE AVOIDED OR INFRINGED 111 (e) SHOP SALES AND SPECIAL PRICE-CUTTIN G METHODS . . 112

(f) GENERAL CONSIDERATION OF THE PROBLEM OF DELIVERIES 113

101

VI.-FACTORS GOVERNING THE ECONOMIC STABILITY OF THE INDUSTRY. (a) THE POSITION OF THE INDUSTRY AS DESCRIBED BY THOSE ENGAGED IN IT.

299. At the time when the Commission was taking evidence, representatives of employers and employees' organizations in every capital city were emphatic as to the difficulties of the situation in the baking trade. Individual bakers, their organizers, flour-millers and representatives of labour were in agreement in their description of the position which had developed during the past few years. A further confirmation was the fact that, on many occasions, prominent bakers and the officials of their organizations definitely asked the Commission to recommend a policy of control. They freely admitted that they did not like control but stated that they had been forced to realize the necessity for it in the conditions obtaining. An industry which is largely operated by individualists does not ask for control when it is in a healthy condition.

300. There were no complaints in some local centres where prices had remained at a level and the number of bakeries had not In the cities some few individuals maintained they were reasonably satisfied with the position, but a closer examination of their specific circumstances showed in all cases that , either they were exceptionally well placed owing to particular factors such as the production of special lines in which there was little or no competition, or they were working small businesses with or without farnily assistance and were thus able to avoid certain restrictions as regards conditions of labour. •

301. The difficulties of the individual baker were usually associated with a decrease in profits due to a variety of causes. The chief of these was the reduction in the amount of output which he was able to sell at a profit. This might be due to one or more of a number of factors such as an increase in the local cornpetition, a decrease in the per capita consumption of bakers' bread, an increase in the amount of price-cut ting, or an increase in the an1ount of bread sold in shops or markets resulting in a diminution of the demand for delivered bread. This last n1atter is of importance because it results in an increase in the average cost of distribution of that portion

of the bread which is delivered to householders . . 302. The Commission has made a detailed analysis of each of these factors in its endeayour to ascertain the true economic position of the industry.

COMPETITION WITHIN THE INDUSTRY.

303. In Section II. of the Report the statistics obtained from various official sources confirm the contention of the representatives of the industry that competition within the industry has increased in recent years and that this competition has mostly taken the form of an jncrease in the number of small bakeries.

304. From a theoretical stand -point the baking industry is comparable with many other industries (which are solely concerned in the supply of local markets) insofar as efficiency of production, distribution and management govern the success or failure of the individual enterprise. Viewed a master baker who makes a g?od loaf, has an

factory and employs ciVIl and dihgent carters, should be able to Wlthstand any legitimate competition. of wages and of work do not harm his business because his

competitors are similarly affected. He may at t1mes, usually for personal reasons, lose a customer here or there, but will obtain new ones at about the same rate. The only event which could destroy his business would !llaterial reduction in the popu!ation of area w_hich he New men opening fresh businesses would have very considerable difficulty In estabhshmg themselves in competition.

305. In contrast with this theoretical picture is the proved fact that in most Australian centres numerous new bakeries have been opened during recent years and many of them are apparently more or less successful. The master. b!1kers alleged that unfai! competition has been in evidence in many cases, but the CommissiOn considers that the problem Involves more than one factor. The first step in its analysis is a consideration of the factors which govern the

possibility of the invasion of the industry by new proprietors. 306. The factors which have decided whether the baking industry in any district is capable of successful attack by new businesses are numerous. The firs t of these is t he presence of men who are both capab!e of as and. ready to do .so .. The introduction of

yeast and of "Improvers . has made It easie! for men with httle of the

technicalities of bakin& to start on their own account as mdependent bakers. In additwn, the depression threw out of employment a number ?f men who been iJ?- the industry at time or other. Such men faced with the alternative of accepting occaswnal casual or relief work or sustenance or of obtaining employment jn some ?ther in whi ch they were only partially skilled, frequently chose to start independent baking businesses .

102

· 307. However, no such man would be willing to launch a new enterprise unless he saw some prospect of success. His first need would be a bakehouse and eqUipment. Here the presence of old, unused baking ovens in most of the larger cities and townships was a definite factor. These premises were presumably worth more to their owners .if rented as bakehouses than as ordinary dwellings . Rent could be paid weekly and sometimes very little had to be done in the wa y of alteration or improvements to enable· the premises to pass the somewhat lenient requirements of the Factories A?ts. Second-hand equiJ?ment sufficient to comply with the low level demanded by the regulatiOns could often be obtamed for a very modest sum.

308. The acquisition of equipment for delivery could be avoided altogether or kept to a minimum if the man concerned concentrated on wholesale sale to shops, or over the counter at the bakehouse, and either made deliveries with the aid of a "contractor" or used such vehicle as might be more or less adapted for the purpose.

309. Some working capital would usually be necessary, but in small amount. A man .opening a new business would normally concentrate on cash sales and would frequently buy his flour in small quantities as occasion demanded. In districts where flour-millers were competing extensively for t.he sale of their flour on the local market, credit could be obtained if the prospects

of the new business appeared at all promising. 310. Given the possibility of setting up in business as an independent baker, a man, in order to make a living for himself, might be prepared to work for longer hours than he could demand of a:a employee, or to accept a lower cash return than he would have to pay such an operative.

311. Even then, the newcomer would be unlikely to embark on the business unless he believed he could undersell the established master baker and still have a margin of profit as wages for his own work. This question of the profit margin within the industry is a fundamental one and is the key factor governing a great dea.l of the present disturbance in the baking trade.

312. In the preceding paragraphs an attempt has been made to give a rapid survey of the pertinent factors, and it is clear that profit margins, avoidance, and/ or infringement of awards and debasement of the wage reward to the proprietor, the abundance of available credit, the meagre nature Of the necessary equipment for a bakehouse, have all played their part in introducing the complications referred to above. A review of these matters in detail in the light of the actual evidence obtained is necessary because, unless those within the industry and those concerned with its regulation approach the problem with a full understanding of all the pertinent

points any action will be relatively impotent. It is clear that no single remedy will rectify the position.

(c) PRICE-CUTTING IN ITS RELATION TO PROFIT MARGIN IN THE BREAD­ BAKING TRADE. 313. The survey of the returns of bakers given in paragraphs 268 to 277 illustrates the wide range of prices over which bread is sold. At first glance this suggests that some bread is sold considerably below the cost of production whilst in other cases there is a handsome margin

of profit. Although this is partly true, there are modifying factors. Much of the bread which is sold at low prices is delivered under contracts which offer favorable conditions, reduced production and delivery costs compensating for the low price. Additional production in a bakehouse working under capacity involves little more than cost of raw materials. Bulk deliveries are usually less costly than house-to-house distribution ; delivery can often be made. at convenient times of the day; some contract purchasers are prepared to take stale bread as part of their

quota. On the other hand, some of the bread delivered at high prices may represent unprofitable trading. In some districts the houses are relatively far apart, the length of time required for an individual call by a carter is considerable and occasionally the average number of loaves sold does not justify the expenditure of that amount of time. If a shop or institution obtaining its bread at a very favorable price is occasionally being served at less than cost, it is equally true that some housewives are not paying as much for the services of their bakers as those services really cost.

314. Thus, while it is often difficult to determine whether any particular transaction is profitable or unprofitable, it is in general clear that there is a considerable variation in the margin of profit contained in the prices at which various purchasers, wholesale or retail, are served. Further, as the actual costs of delivery per loaf to shops and institutions are naturally less than those incurred when distributing to householders, it is economically reasonable that there should

be a difference in the prices charged to the shops and to householders. Theoretically, that difference should be the difference between the cost of the two types of delivery. If it is not, then either the shop and institution trade is more profitable than the private trade or the reverse is the case. In actual fact the difference is difficult to determine because some shops and institutions make rather exacting demands on the master baker by calling for several deliveries per day. This matter is further considered in paragraphs 337-344 where shop sales are discussed

at

!_ 00 ()":)

"""' 0 -I

C'0 0 -

FIG.

VI.

DIAGRAM

TD

ILLUSTRATE

THE

EFFECT

DF A

PRICE CUTTER IN

A LOCALITY.

A, B, C

and

D are

four lar

ge bakeries whose delivery runs

to

householders

aud

shops

radiate

!Tom

their bakeries. The shops are indicated by black

dot s.

A new

b2ker

starts

at

E

and concentrates on

tra de with five shops. He

cnt.s

th e

pr i Ce in order

to

obtain

tlu i

bu siness,

and

the shops do

the

same.

The influence of this zone of low-price, shop-s

old

Lr cad

extends outwards and spreads

into

adjac

ent

areas of the busin

es ses

of A, B, C

and

D.

r

105

c_;g r v

315. The point at issue at the present juncture is the approximate size of the margin which would make it practicable and reasonable for a man to start in the business . Such a man is often prepared to take less than award rates for his own labour, and his family may be prepared to assist on a similar basis. Many bakers have informed the Commission that t hey have preferred to work under such conditions rather than accept sust enance relief as unemployed. In some cases, they have stated that they have made about half award wages; in ot hers, they have stated that their earnings approximated to the official rates for working bakers ; a fe w have alleged that they were earning m.ore. The cost investigation shows that, in t he production cost of a 2-lb. loaf, the wage item represents about a halfpenny (0.5d. ), so that a man working fo r half wages has a margin of a farthing (0.25d.) if he has to pay the same distribution and overhead expenses as a master baker paying normal rates. The labour factor in distribution costs represents about 0.8d. so that if he or a member of his family works for half rate for delivery his margin would be increased from 0.25d. to 0.65d. per 2-lb. loaf. Again, taking an extreme theoretical case of half wages and double time, or that ti1ne's equivalent in work, the margin would be about l.2d. per 2-lb. loaf. In other words, he could cut the price seriously and still continue in production.

316. In every way the wholesale trade attractive to the baker engaged in fig hting for establishment. The labour cost of wholesale delivery to shops is less than the average cost of wholesale and retail delivery. The time required for the delivery of a t otal of 100 loaves t o say, eight different shops is relatively small. The risk of bad debts is considerably less t han in the retail trade. . In addition, the industry itself, with a view t o discouraging shop trade, has frequently fixed the price of bread for sale in shops at a figure which was probably rat her nearer

the delivered price than economic differences between the services rendered warranted, thus increasing the profit margin and rendering the wholesale trade to shops particularly liable to attack by the price cutter. , ,

317. There are certain circumstances under which a baker can st art a small bakery, pay a ward wages to himself and one or more employees, and build up a trade in a perfectly " legitimate " way . . Figure VI. is a diagram which illustrates t his. In it A, B, C and D are four large bakeries each delivering bread over a wide area to householders and shops. The shops are shown as dots. A new man starts a small bakery at E; he concentrates on the shop trade and establishes connexions with shops 1 to 5 to which he is able to quote alow price because his

delivery costs are low. Shops 1-5 cut the price of bread. A, B, C, D, all begin t o feel t he new competition, because they lose a certain amount of trade. Shortly· aft erwards secondary effects begin to occur ; the shops in competition with shops 1-5 begin to demand a lower wholesale price of bread from A, B, C, and D so as to enable them to sell bread at lower prices. They are

forced to do this in order to retain their customers who buy groceries and other articles as well as bread. A, B, C, and D are forced to agree and· " their" shops then reduce prices. This fa ct becomes known in the neighbourhood, and housewives begin t o demand a reduction in the price of delivered bread. A general reduction of prices within a considerable zone around E may result.

This type of "legitimate" cutting can only occur in city areas where people are prepared t o buy bread in shops and where the circumstances are of t he order here described, and where the margin between prices charge<;! to shops and for delivered bread is narrower than the different delivery costs warrant. The Commission has encountered one or two instances of this t ype of development.

318. So far no account has been taken of t he additional co mplication added by the amount of profit which the master bakers are attempting to get froin t heir businesses. It has been assumed that the cutter was competing on equal t erms with the established baker in this respect. In point of fact, the latter usually has considerable capital invest ed in his business and, in -many cases, part .of this capital has been borrowed and calls for the payment of interest. In addition, the owners of well-established businesses naturally expect higher rates of pay for their own services than are obtained by ordinary operatives. The cutter has to pay a rent which may or may not be lower than the master baker's interest on capital, but every extra margin taken by the master baker means a greater opportunity to the price-cutter.

319. One of the difficulties existing between the bread-baking industry and t he consuming public is the fact that the main raw material of the industry, namely flour , is sold in ton units, whilst the product, namely bread, is sold in units representing 1 t lb. of flo ur, or approximately I/1,300th of the flour unit, thus, an alteration of 27s. 6d. per ton of flour represents an alteration of 0.25d. in the cost of a 2-lb. loaf of bread. Usually considerable time e lapses before the price of flour varies up and down by as much as 27s. 6d. per ton.

320. If, for instance, it be assumed that the master bakers are making a reasonable profit on a price of bread based on a certaiJ?- price of flour, then befo re an alteration of 0.25d. per loa.f is justified in the price o£ bread, the prwe of fl.our must. move by 6d. per t on, assurrung that other costs remain constant, so that,. If the pn ce of flo ur 1s generally fa llmg, the bakers may be making perhaps twi?e ·the that before an is made in the

price of bread. Conversely, If the price of flour 1s nsmg.they may ? e makil?-g httle ?r no profit until it has risen by 27s. 6d. per ton, and the corresponding change 1s made m the pnce of bread .

106

321. Consequently, under existing circumstances, the profits or losses made by the bread industry are in the nature of a gamble, depending to a material upon the periods of tin1e during which the price which the baker has paid for his flour remains fairly constant in relation to any particular price received for the bread. Sometimes the have an advantage,

sornetimes the reverse is the case. Owing to numerous variations in the price of flour within recent years, the actual results are difficult to assess. 322. The matter is illustrated by :B'igure VII. the data. of which affords a basis for discussion of the -way in which the bakers' profits may fluctuatefro1n time to time. The illustration is based on the fluctuations of the declared price of flour (represented by the full line) and declared price of bread (shown as a dotted line) in a certain State £or a period of four years. The vertical scales of the graphs have been so arranged as to be proportional if it be assurned that 1,330 2-lb.

loaves are made from a ton of Hour. The dense black part of the diagra1n represents the amount of profit being made by the average baker dur-ing the period assurning that when the period starts he was rmaking a profit of a farthing (0.25d.) per loaf. During the first month the price of flour fell in two stages and the profit margin rose, but as the price of bread was reduced towards the end of the month the profit margin became small (about O.lOd.). In the second month there were several rapid fluctuations in the price of flour, but the final result was a further reduction and the profit margin rose to 0.20d. Fro1n the third to the fifth months the price of flour rose by stages and then entered a fluctuating period ; in general, there was no margin of profit for the bakers at the end of this period. Frmn month six to month twelve flour prices remained stationary and the "average baker" was making a loss of about 0.07d. per loaf. The next two months saw a fall in flour price and a return to a slight profit. The period from the middle of the fourteenth month to the end of the sixteenth month was one of rising flour prices and at times the bakers made losses, but the profit inargin was restored by an increase in bread price during the sixteenth month. From months sixteen' to twenty-four the profit was about 0.4d. The very large margin of profit for a short period in month twenty-five was caused by a lag of a bout a week between a large fall in the price of flour and a corresponding drop in the price of the loaf. . Months twenty-five to thirty-six gave relatively large profits-usually well over 0.25d. per loaf. I\1:onth thirty-seven witnessed the beginning of a steady and graduated fall in the price of flour, and as this was accompanied by only one fall in the price of the loaf the Inar·gin for profit was large. It must be ernphasized that alterations in other costs may have occurred dm·ing the period and it . does not follow . that all bakers were obtaining the "declared" price for bread, or paying the " declared" price for flour. The purpose of the diagra1n is to illustrate the wide fluctuations wloich inevitably occur in the profit margin, especially where the " declared "

price is only moved in halfpennies. Figure VIII. carries the story on for a further four years­ in fact through the period of the economic depression. It indicates the long period in which there would have been heavy losses by the bakers had conditions remained the same. Actually there were reductions in wages and some other costs which ameliorated the position, but many bakers were inmost clifi1cult straits and were unable to raise prices owingtothe competition already discussed.

323. If Australia possessed a decin1al coinage and a coin representing 1/IOth of a penny, so that the prjce of bread could be varied frorn tinl8 to time by 1/lOth of a penny according to the price of flour, or if the price of flour remained, or was n1aintained at a constant figure, this difficulty would largely disappear.

324. As a considerable quantity of bread is paid for either in quantity or over weekly periods, it is possible to alter the price by a farthing at a tirne, although no such coin exists in the Australian currency. Whilst theoreticaJly still further divisions of the Australian penny might be introduced, there are practical difficulties which have discouraged such experiments. However, all possibilities should be explored. For instance, 1netal tokens exchangeable for loaves might be sold by the half dozen; in this way it would be practicable to vary the price of the loaf by as small a fraction as one-twelfth of a penny. Another idea at present in process of development is the utilization of tokens representing one-eighth of a penny or one farthing which might .be used by the baker or the carter, and be returned by the purchaser later as a part payment for a loaf of bread, the individual value of which is so many pence plus a fraction of a penny not

represented in the present currency. For instance, if the price of bread to regular customers were 4!d. the housewife would pay 5d in exchange for a loaf and a token. On the following day she would pay 4!d and return the

325. No amount of adjustment of the unit of payment will be effective in cases where the master bakers do not take appropriate action to reduce the price of bread when circumstances warrant and their own safety demands such action. Competitive industries which ask too much return for their services will always be vulnerable to attack, particularly where the jnitial capital costs of the small proprietor are relatively small.

107-108

DIAGRAM TD ILLUSTRATE MANNER IN WHICH BAI

0

0SSUM/NG OTHER COSTS CONS7?'1NT) rL..OVR PR/C£

/2

8-R'EAO ,P,q/C£ - - ------------

FID. VII.

r--------1 I I I I ----, I I I I I I I I I I I I I I I I I I I I I I I I I I I I I L _____ ----------

109- 110

OF FIG VII.

FOR THE SUBS£(i)UENT FOUR YEARS FLOVR PR/CE - BREAD P R/C£ -----------' >.. ' I

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111 393

326. When business falls off and bakers find they are selling less bread, the natural tendency is to try to make every loaf carry a slightly larger portion of the overhead cost. If a fall in the price of flour occurs, they will naturally desire to delay the fall in the price of bread as long as possible. In other words, they will endeavour to keep as big a margin for overhead plus profit as possible, although perhaps a greater proportion of that margin is being used up in defraying overhead costs t_han was formerly the case. .

327. Under circumstances such as these, the small man entering the business get s his best chance. The width of the margin is his opportunity to come in and still make a fair wa ge · and profit whilst cutting the declared price.

328. This t heoretical consideration of some of the components of the complex of factors underlyin g competition in the baking industry sufficiently explains the ·wide variation in profit margins revealed by the cost survey of Section V. The main general conclusion is t hat a wide average profit margin is not in the best interests of the trade. Under a competit ive system of society, it must, inevitably, lead to cutting and cutting intensifies the difficulty of the master baker both because any loss of trade increases the cost per loaf of his irreducible overhead charges such as rent, interest, rates and lighting, and because the nature of his business is such that many

of the other eosts are relatively inflexible. (See paragraph 315). Under a non-competitive order, the dangers of exploitation of the public and inefficiency of service are too obvious to require detailed description and therefore the inauguration of such an order would predicate continuous sup ervision of the industry in the interests of the public.

(d) METHODS BY WHICH THE LEGAL ENACTMENTS GOVERNING EMPLOYMENT ARE AVOIDED OR INFRINGED . 329. In paragraph 99 it has been pointed out that, in the majority of St at es, the only restrictions in relation to the amount of his own time which a proprietor may give to his business is in respect to the hours of work on holidays and Sundays. There can be no regulation of the amount of money he takes out of the business as wages, as the very nature of private ownership precludes such action. Consequently, the new baker setting up a small business is in a strong competitive position with his competitor who employs labour. If he manages to increase his trade, he will sooner or later have to increase the man-power required. If he has children of working age, not otherwise employed, they are the most natural source to which he would t urn for assistance. Irrespective of any legal rights that the members of a family may possess under awards* in practice agreement or collusion would be so easy that the enforcement of the awards

would be impossible. There could never be any reason for preventing the members of a family handing back part of their wages in- support of a business on which the family's livelihood depended.

330. The case becomes somewhat more complicated when a business is run as a partnership in which the partners themselves do all or most of the work. Under these circumstances , they may work longer hours than the hired operatives and they are not bound to claim for this work. a remuneration equal to the award rate. In fact, partnerships of an ill-defined nature ,exist. Cases have come under notice of the Commission where men working in small bakeries did not know whether t hey were partners or not ; there had been mention of a partnership when they were engaged, but documents to that effect hadnot been signed. It was further alleged that when the position was questioned a de ed of partnership was subsequently registered. There

was evidence that in one Stat e at least the partnership procedure was being adopted by some • bakers in order to avoid the observance of awards, thus increasing the competitive power of the business. In some cases, the men concerned were bakers and in others carters.

331. Another method by which certain bakers have endeavoured to get work done for a smaller payment than they would have had to make if wa ges had been paid at st andard rates, was by the adoption of a contract system. In general, the payment under the cont ract would be much smaller than would be earned had the award wages been paid. In Victoria, the Factories and Shops Act 1928 was amended by a new measure, the Fact ories and Shops Act 1934, under

which decisions as to the nature of the relationship of contracting parties are referred t o a Bread Trade Tribunal. Such a body by virtue of its constitution has the special knowledge of the industry necessary to decide whether the case was one in which the spirit of the Wages Board decisions had been a voided.

332. In addition. to these more or less formal attempts at defeating the a number of infringements of various kinds has occurred in the baking industry durmg recent years. One of those which has been mentioned to the Commission is t he ?f a lower wage than that laid down, the employee signing for the full amount but not rece1vmg It .

• E .g., Victoria Factoriu and .Act 1g28, para. 172.

.112

333. It has been stated that some carters commonly known as "vendors" purchase bread from master bakers and then retail it on their own account at rates which do not permit them to earn a carter's award wage. Further, if the delivery is sub-let in this way, the baker avoids payments for overtime, holidays and sick leave for the carter.

334. In States in which comparatively late hours of starting are fixed infringements of the a ward occur. Some householders demand bot, fresh bread, and a larger number require an early delivery. Therefore, bakers who are able to send their carts out early have a competitive advantage. Consequently, the infringements occur both as to the time of starting in the bake­ house and as to the delivery. The former are particularly difficult to check. Union officials stated that during prohibited hours they were sometimes able to detect the aroma of baking outside bakehouses, but were unable to obtain access to the premises. .

335. The general result of these infringements has been a spreading disregard of the awards and wages board decjsions in the bread-baking industry. Sworn evidence was submitted to the Commission to the effect that in one city 7 5 per cent. of the master bakers were not observing the award in respect to rates of pay, and that men were sometimes receiving£3 per week less than a ward rates of wages. This is an extreme case, but evidence has shown that infringements and evasions are serious factors in the industry. The present state of affairs is undesirable and is in opposition to the regulation of industry which is the accepted policy of Australia.

336. The following conclusions may be drawn from this brief survey of the avoidance and infringements of a wards :- .

(a) that the main pertinent factors are firstly, price, and secondly, services desired or required by the consumers ; (b) that when the desires or requirements of consumers are affected by legal enactments as, for instance, in respect to the condition of bread and the time of delivery,

a voidance and infringement of the law occur ; (c) that the decrease of employment causes a fear of unemployment, which fear has made men prepared to sacrifice their legal rights in the matter of hours and wages; (d) that the frequency of evasions and infringements can be decreased, firstly, by an

increase in the number of inspectors, secondly, by amendments of existing legislation where necessary, and thirdly, by ,the education of the public ; (e) that failing an improvement in the position by methods mentioned under (d), the alternatives are the breakdown of the industrial conditions or the institution

of legislative control of the industry.

(e) SHOP SALES AND SPECIAL PRICE-CUTTING METHODS. 337. In recent years both the amount of bread sold jn shops and the number of shops selling bread have increased considerably. ' These changes have introduced a serious factor which has affected the economics of the industry detrimentally. Originally the price of bread "over the counter" was the same as the delivered price. Under these circumstances bread was purchased at shops only as a matter of convenience. The whole position altered when the number of shops increased and, in many instances, price-cutting became more or less general.

338. With the onset of the depression came the increase in the number of sn1all bakeries and considerable general price-cutting. Selling through shops was one of the chief lines of attack • of the struggling small baker who often had no efficient means of delivery. Such price-cutting methods were also adopted by some master bakers who make a definite speciality of the wholesale

trade. Si1nultaneously, the small shopkeepers found it necessary to reduce the margin of profit on many of the lines they had previously sold because the general public was becoming more careful in its purchasing methods. Many traders availed themselves of the opportunity of selling bread as a new line, and as they were able to undercut the delivered price they found there was a fairly good volume of sale. For this new business no extra staff was needed; the requirements

of the Health Authorities in respec_ t to proper storage facilities were negligible ; little capital expenditure was involved and there was a daily turnover on a cash basis at a profitable rate. Under such conditions the actual selling of bread was much more profitable than in the case of a master baker keeping a shop for the sale of bread alone.

339. Some shops adopted the practice of selling bread as a "catch line" at, or even below, cost price, with a view to attracting buyer:s for other lines. Such practices are usually accompanied by special advertisement in which the low selling price of the bread is made a chief feature. The Commission has observed numerous instances of this practice in certain large departmental stores and in other shops, particularly in industrial suburbs. The extreme case was probably encountered where bread was being carried more than 100 miles by road, and then sold in a market at less than cost of production based upon award rates of wages.

113

340. The practice of selling goods at less than cost is a special form ot advertising which has developed considerably in 1nodern times. It is applied to many types of articles which are "starred " as bargains by large departmental stores. It is known in the United States as the " Loss Leader '' method, and its control in, that country has gjven rise to much controversy. It is designed to advertise the shop in the sa1ne way as the coupon system advertises a particular line.

341. The great majority of those engaged in the baking industry consider that all types of shop sales of bread are objectionable. Generally, the industry considers that delivery is part of its operations, and that shop sales should be prohibited except from bakehouses or definite bakers' and pastrycooks' shops. Bakers point out that when cutting takes place-whether it be simple cutting or " Loss Leader " sales- the cutters are encroaching on the trade of a man who has but one line to sell, and to whom a ruinously low price is more serious than in the case of a man who produces and sells rnany kinds of artjcles.

342. The opposing view is based on the concept that the function of the baker is to bake bread and make it available for public purchase as and where public demand indicates, at a price which does not include more than a fair margin -of profit . There is a definite public demaJ:!d for bread sold in shops both on account of the convenience of being able to obtain it throughout the day, and often in the evening as well, and beca use nutny people do not want to pay for the service of delivery and are glad of being able to effect the saving of a halfpenny or rrwre per loaf.

343. The Commission accepts the principle that for the convenience of the public, shops sales must be allowed to continue, but it considers that the supervision of the conditions under which the bread is stored and sold in the shops should be subjected to m ore exactjng control and inspection than it receives at present. Sueh control and inspection would rnean that the

number of shops selling bread would be reduced and, in 1nany districts, a considerable reduction could take place without inconvenience to the public. This matter is dealt with in the findings and recommendations. 344. The practice of selling bread as a "catch line" involves wider issues. A method of preventing such practices is to establish a controlled minirnum prjce below which it becomes illegal to sell the loaves. This method was adopted towards " Loss Leader " selling in general in the National Reeovery Administrations Retail Codes in the United States. Selling " catch

lines" is an ur;tfair trade practice and should be condemned especially where it interferes with the reasonable economics of any industry such as the bread-baking industry.

(f) GENERAL CONSIDERATION OF THE PROBLEiv.I OF DELIVERIES. 345. The analysis of bakers' costs indicated c]early both the importance of delivery charges as a factor in the cost of the loaf and the considerable differences which occur between the capital cities in this respect. These deductions emphasised the necessity of making a special study of this particular part of the bakers' operations.

346. The first line of inquiry was concerned with the operating efficiency of the present system of delivery rounds. The original Bakers' Questionnaire (Form" JYI " )contained a schedule in which information was sought as to the number of loaves sold, the number of customers served and the approximate daily mileage travelled on each round. (8ee Appendix D.)

347. The information gleaned in this way covered a considerable part of the bread supply of the areas concerned. It was possible to utilise, for this purpose, son1e of the returns frorn bakers who were unable to supply accounts sufficiently det ailed for costing purposes. Table 62 summarises the results.

TABLE 62,

SHOWING DETAILS IN RESPECT TO BREAD DELIVERIES IN CAPITAL CITIES OF MAINLAND STATES AND IN TASMANIA,

(1) (2) (3) (4) (5)

i

(B) (7)

Average Average Average Average Average - Number of Number ol number of n umber of n umber of numbrr of rounds. customers. customers per loaves* sold loaves ner loaves per m ileage p er round. da il y . round per· cl ay. custom er per round. day. Sydney .. . . 613 102,430 167 147,093 220 1.44 22

Melbourne .. . . 455 89,407 196 94,811 208 1.06 19

Adelaide . . . . 107 17,048 159 22 ,458 210 1. 32 19

Perth .. < 103 16,407 159 21,212 206 1. 29 23 . . Brisbane .. . . 178 32,113 180 44 ,137 248 1. 37 26

Tasmania .. . . 64 8,725 136 12,266 192 1.41 26

• 2-lb. loaves or th eir ap proximate equi valenL

F.403.-7

114

348. in respect to customers per round, there are considerable variations between the ­ States; the low figure for Tasmania may be partly explained by the inclusion of a certain number of deliveries which were partially rural in character. The divergences between the figures for the other States are also considerable, but it would be unsafe to draw many inferences from these

data because the percentages of "wholesale " customers are different in the various The Commission would have been glad to segregate "wholesale "from "retail" trade both as regards deliveries and cust01ners, but the amount of labour involved would have been very great. In the majority of cases the same vehicle which makes "wholesale " deliveries also does a certain amount of "retail " trade. Again, the demarcation of the border line between wholesale trade and retail is very slight when the actual facts of delivery are under consideration; there is little difference in cost between supplying a small shop and a moderately-sized boarding house, but the former would probably be regarded as a wholesale transaction by the baker and the latter as a

retail one ; moreover deliveries to shops are sornetimes necessary several times daily. 349. Similarly, in connexion with the data for loaves sold per round (Column (5) of Table 62) , the proportion of wholesale deliveries to ordinary house to house sales may vary somewhat between the States and consequently the data have to be used with discretion.

350. The average loaves per customer is very variable, but again this figure is influenced by the proportion of wholesale trade. 351. The average mileage per round shows considerable variation, being influenced by the extent to which the houses in the districts concerned are widely separated, and by the extent to which bakers are prepared to extend their deliveries in order to obtain fresh custom.

352. Regarding the table as a whole, if we assume that a high number of loaves per customer is an indication of a relatively high proportion of " wholesale " or large batch deliveries, then the Brisbane and Sydney data have a number of these when compared with the Melbourne sample, but' the southern city has a correspondingly large number of customers per round and its deliveries are less extra vag ant in terms of 1niles covered. The Perth and Adelaide figures are very comparable in every respect except the mileage per round.

353. These data are set out in graphic form in figures IX to XIV., in which the distribution of the deliveries in each area in relation to number of customers served is set out in the form of a block diagram, while the average number of loaves sold per round in each group is indicated by the height of the vertical lines below the main . diagran1. The letterpress on the diagrams explains their method of construction.

354. Bread is delivered by motor, by bicycle, and by horse and cart. Motors are used by sorne of the large establishments, _ bicycles are used by some re-sellers (or "vendors") and by a few small bakers, but the Ihost usual mode of transport is the horse and cart. The experience ·of the industry is that motors are economical only for long runs, for wholesale deliveries where

there is a long drive before delivery commences, or for replenishing carts working outer rounds. They are too expensive for the normal round which involves much stopping and starting whilst the intelligence of t he horse can be used to effect a saving of time between deliveries to adjacent houses. In most States, the wages of a motor driver are slightly higher than those of a carter.

355. On the other hand the advent of the harder surfaces of the modern road is raising the rate of depreciation of horses seriously, and a trend toward the use of electrically driven vans equipped with storage batteries is noticeable. 356. The proportion of deliveries effected by horse and Inotor vehicles respectively varies considerably in different areas. Table 63 which deals only with investigated bakeries illustrates this point.

TABLE 63.

SHOWING FOR THE INVESTIGATED BAK.ERIES AN ANALYSIS OF THE VEHICLES USED FOR DELIVERY INTO MOTORS AND HORSE-DRAWN CATEGORIES.

Number of vehicles inuse (including spare

Number of businesses delivering by. vehicles).

Number of Number of

-- bakeries rounds. Motors as concerned. Both horse Horse vehicles Motors only. vehicles and Horse vehicles. Motor vehicles. percentage of only. motors. total. Sydney . . 63 12 5 46 576 475 183 38.53 . . Melbourne . . 49* 23 .. 25 447 438 51 10.43

Adelaide . . .. 28 13 3 12 142 153 20 11.56

Perth 26 7 1 18 119 102 29 22.14 . . . . Brisbane 30* 3 6 20 180 123 90 42.25 .. . . Tasmania 29* 15 5 8 68 64 20 23.81 ..

• One " investigated" bakery had no means of deltvery at each of these centres.

115-,.-116

BLOCK DIAGRAM TO ILLUSTRATE FOR 613 RoUNDS OF SYDNEY BAKERS THE NUMBER OF CusTOMERS oN EACH RouND AND THE APPROXIMATE DISTANCE TRAVELLED.

Each square represents one round. The place of a square on the horizontal scale indicates the average number of customers to the nearest ten. The shading of the square indicates the approximate distance travelled on the following scale:-

• 1 to 9 miles. 30 to 39 miles. II 10 to 19 miles. rn 40 to 49 miles. 20 to 29 miles. 0 50 miles and over. (The lower diagram indicates the average number of loaves per round in the group of rounds immediately above it.) F/6. IX.

Number of customers

241 to to

250 280

Average number of loaves per round

' '

·-

Number {

of customers

600

500

Average 400 number of loaves 300 per

round 200

100

0

117-118

BLoc K DIAGRAM To ILLusTRATE FoR 455 RouNDs oF MEL BouRNE BAKERs THE NuMBER oF CusTOMERS oN EAcH RouND AND THE APPROXIMATE DISTANCE TRAVEL L ED.

Each square represents one round. The place of a square on the horizontal scale indi cates the average number of cust omers to the ne e.rest ten. The shading of t he square indicates t he approximate distance travelled on the followi ng scale :-11 1 t o !:l miles. [gj 30 to 39 miles .

II 10 to 19 miles . rn 40 t o 49 miles .

20 to 29 miles. 0 50 miles and over.

(The lower diagram indicates t he average n umber of loaves per round in t he group of rounds immediately above it .)

F/6. X.

41 141

to to to to to t o to

50 100 150 200 250 300 340

119-120

BLOCK DIAGRAMS TO ILLUSTRATE FOR 107 RoUNDS OF ADELAIDE BAKERS AND 103 RoUNDS OF PERTH BAKERS, THE NuMBER OF CusTOMERS oN EAcH RouND AND THE APPROXIMATE DISTANCE TRAVELLED.

Each square represents one round. The rlace of a square on the horizontal.scale indicates the average number of customers to the nearest ten. The shading of the square indicates the approximate distance travelled on the following scale : -II I to 9 miles. t8J 30 to 39 miles.

II 10 to 19 miles. rn 40 to 49 miles.

20 to 29 miles. D 50 miles and over.

(The lower diagrams indicate the average number of loaves per round in the group of rounds immediately above it.)

ADELAIDE.

riG. XI.

Number {

of customers

31 to

40.

91 to

100

141 to

150

191 to

200

231 to

240

t

' ' t t

number 200

of loaves

Average {

300

per 100

0

round

Number of customers

Average number of loaves per round

PERTH.

FIG. XII.

Number

{ of customers 600

500

Average 400

number of loaves 300

per round 200

100

0

Number

{ of customers

{-

Average number 200

of loaves per 100

round

0

121-122

BLOCK DIAGRAMS TO ILLusTRATE FOR 178 Rm.; Kvs OF BRISBA N E BAKERS AND 64 HocK ns OF TASMANIAN BAKEHS. THE i'JuMBER OF ( \ : s TOMERS OK EACH HoPND AND THE APPROXJ:MAn: DISTANCE TRAVELLED.

Each square represents one round. The place of a square on the horizontal scale indicates the average number of customers to the nearest t en. The shading of the square indicates the approximate distance travelled on the following sc ::t le :-

• 1 to 9 miles. 30 to 39 miles. II 10 to 19 miles. OJ 40 to 49 miles. 20 to 29 miles. D 50 miles and over. (The lower diagrams · indicate the average nnmher of loaves per round in the group of rounds immediately above it.) BRISBANE. F/G .. X/1/,

TASMANIA.

FIG. XIV.

251 to

260

40 .. '0 4 ' -_ J

123

357. To some extent the extra costs of delivery in Sydney and Brisbane are di1e to the higher proportion of motor vehicles en1ployed in those centres. This, in its turn, is to some extent influenced by the relatively late hours of starting baking and the demand by the public for very fresh bread.

358. In paragraph 342 above, it was stated that one concept of the function of the baker is that his trade should consist of baking bread and making it available for public purchase as and where demand indicates. This view has much to commend it, but in practice certain difficulties arise. The · average baker sells most of his output at the doors of his customers. Theoretically, the baker should organise his business so that each breadcarter serves an adequate number of customers ; and if this number declines, the carters' rounds should be altered so as to bring each up to a reasonable size once more. In practice this theoretical basis is seldon1 achieved.

359. Generally, competition between bakers is intense. In n1any areas canvassing for new custom goes on continuously and some bakers give their carters a bonus for each new customer gained ; on the other hand there are districts in which there has been an understanding between bakers against -canvassing, In one country township the Commission was informed that the majority of housewives changed their bakers repeatedly during the year for no apparent reason other than they wished to spread their custom. As a general rule while so1ne householders change their bakers frequently, the majority do not. The reasons for change are varied; sometimes it is a matter of quality of the loaf; sometimes a larger amount of debt has accumulated than the baker is prepared to carry and he prefers to cut his loss rather than go on and give a further

extension of credit ; and sometimes it is a question of the degTee of cordiality existing in the relationship · between the housewife and the carter.

360. The trials and anxieties of the housewife are proverbial. The task of the breadcarter is also exacting, he has to get in and out of his cart several hundred ti1nes in a day; often he may have to wait for minutes at a time before his knock receives attention and his work has to be done in all weathers. It is easy to understand that tempers son1etimes become frayed over the matter

of the sale of a loaf. Tact is an obvious essential in the mental make-up of a bread-carter, and naturally a good man can easily build up a degree of goodwill towards himself in the course of his duties. For this reason, apart from any humanitarian motives, most master bakers are loath to make readjustments in the rounds to discharge breadcarters when the demand for delivered bread falls off.

361. Some master bakers have gone as far as to state that their trade was more or less in the hands of their carters. This is probably an overstatement of the true case, but it does explain why delivery rounds, whieh are sometimes no longer payable, are continued. In some districts the position is fully recognised and the practice of requiring a bond from a carter before

employing him is in vogue. The terms of this bond are that he shall not canvass customers on his present round on behalf of another employer within a period of, say, five years after leaving his present employer . .

362. Most master bakers operating moderately-sized or large businesses find it necessary to employ one or 1nore foremen carters whose duty it is to supervise the roundsmen, become acquainted with all customers, investigate complaints and search for new opportunities of expanding their trade.

363. Economic waste results from the overlapping that exists in bread deliveries throughout Australia. Overlapping is a major problem of the industry and the solution is not easy. It is obvious that to have many bakers delivering bread in one short street, a state of affairs which may be observed any day in any suburb or country. town, is contrary to all principles of efficiency.

However, the Housewives' Associations, . which are foremost in the demand for cheaper bread, are strenuously opposed to any system which will deprive the housewife of the right to select the baker who is to supply her with bread. Evidence was given t hat at various times some of the bakers themselves tried to minimise overlapping by effecting an exchange of customers, but these efforts we:::e usually unsucessful mainly because of the objection of customers, but also

because there were many bakers who hesitated to abandon the customers they knew and were doubtful of retaining the strangers who would be allotted to them in exchange.

364. Two schE1mes have been advanced with the object of eliminating economic waste ' in delivery, i.e. block runs and zoning. Both involve licensing and legislative enforcement. Under a system of block runs, such as that of authorised news agents, an area would be divided into blocks and one block would be allotted to one baker who would deliver to all t he houses in his

block. The housewife would have to wait her turn in delivery, and would have no right of selection.

124

If dissatisfied, she would be unable to change her baker, and would have to go to a shop for her bread. Competition would be abolished and some unemployment of carters would ensue. As an illustration of the attitude of customers to block runs, an attempt by three bakers in one district to establish the system was described to the Corrunission. They agreed to divide the district into three sections and ignored the protests of their custon1ers. Eventually the cust01ners established a co-operative bakery and abandoned the three bakers. If, however, the bakers had passed on to the consumers the saving in delivery costs the results might possibly have been different. ·

365. Under a zoning system, two or more bakers would be licensed to deliver in any one " block", or a suburb would be allotted to a specified number of bakers in that suburb. 366. The introduction of either a " block " or " zoning " systen1 of delivery of bread to the householders of the cities of Australia would result in a reduction of varying ainount in the cost of delivery. Either system would be cheaper and, from the point of view of cold economics more efficient than the present con1petitive overlapping. Any system of co-ordinating deliveries would decrease seriously the amount of employment now given by the industry; it would affect not only the bread-carters, motor drivers, motor mechanics and stablemen, who are directly employed, but also the wheelwrights, farriers, saddlers, horse breeders and the. farmers growing horse-feed. Assuming that the savings of the housewife would be spent in other directions, the employment given by such expenditure would, in som.e measure, ultimately balance the loss of employment indicated, but to what extent cannot be determined.

367. Representatives of the housewives who have appeared before the Commission have strenuously opposed the " block " system of delivery, for the reason that they insist upon the right of selecting their bakers. In this connexion the " zoning " system would be a reasonable compromise probably acceptable to the housewife. It is sufficient to say at this junctu_re that the horu;ewives cannot have it both ways. If they wish the price of bread to be reduced to the

minimum consistent with reasonable conditions within the industry, then a reduction must be effected in distribution costs, and such reduction· predicates some restriction of the present right of selecting the bakers from among a large number.

SECTION OF THE INDUSTRY TO COMPETITION.

(a) PROTECTIVE TRADE ORGANIZATIONS

(b) FIXATION OF MINIMUM PRICES

(c) METHODS OF FIGHTI_ NG OR CONTROLLING COMPETITION

PAGE.

127 128 129

127.

VII.-REACTIONS OF THE INDUSTRY TO COMPETITION. (a) PROTECTIVE TRADE ORGANIZATIONS.

· ?68: reveals that in most crafts or trades, bodies concerned with the protection

of Individual Industry have been formed frorn time to tin1e. During the Middle Ages such bodies wer_e and often attained considerable strength. By united action they were

able to mamtain reasonable conditions of work and trade in their own districts . . 369. Since the Industrial Revolution of the 18th Century and early 19th Century, the State _Itself has assumed progressively greater control over conditions of labour, but the industries have m many cases retained their own organizations which have dealt principally with n1atters of trade.

. 370. In the States of the Commonwealth members of the b3Jking trade have, from time to time, set o_rganizations charged with the consideration of the general welfare of the industry. These organizatiOns have varied in strength and efficacy. There is a Federated Master Bakers' Australia and l'Iew Zealand which deals with technical processes and trade practices.

The capital city of each State has a l\'Iaster Bakers' Association or Council, and in addition there are branches of the Association or separate Associations of country bakers in some States. Frequently, also, the larger rural cities have local or district Associations which are affiliated, or act in co-operation with the country or city bakers' organizations. In smaller centres the bakers often have infonnal gatherings at which local conditions are discussed and a comn1on polic:y decided upolf. These gatherings, although not dignified by the title of "association" meetmgs, often prove effective in their results. On the other hand, in some cities and districts

there is no effective co-operation between the local members of the baking trade. 371. The strength of these organizations has varied considerably from time to time, according to the amount of distress in the industry and to the degree of unanin1ity achieved as regards policy. At present there are in most districts and cities numbers of n1aster bakers who are not members of the Associations.

_ 372. The Associations are financed in different ways. In some cases there is an annual flat rate subscription by bakers and in other cases the bakers' subscriptions vary in accordance with the weekly tonnage of flour used. Some of these Associations receive additional funds from flour millers. In some Associations no subscription at all is paid by the bakers, all finance provided by the millers.

373. These organizations deal, to some extent, with the consideration of technical matters concerning the industry; they watch the interests of the Master Bakers in matters of conditions of labour and wages, and .act for their members collectively when awards affecting the industry are under consideration. They have at times taken action in respect to unhygienic bakeries by reporting such premises to the Health Authorities. They have on other occasions reported infringements of awards to the appropriate departments. During recent years their major interest has been in connexion with the stabilization of the trade. To this end they have endeavoured to obtain the adherence of bakers to minimum price schedules in order to prevent price cutting. In some instances they have also endeavoured to reduce competition by preventing the re-opening of old bakeries and by other means which will be discussed later. In connexion

with their various activities, the Associations have, in most cases, found it desirable to appoint salaried organizing 374. In August, 1935, a large number of bakers jn Sydney formed a Limited Company­ Bread Manufacturers Ltd. This action followed a very intense "Bread War," during which prices had been cut as low as Is. 6d. per dozen loaves in some parts of the metropolitan area. ·

375. The Company was formed under the New South Wales Companies Act, 1899, and under its memorandum and articles of association the Company set out, inter alia, as far as the law allows-(i) to determine the price at which bread should be sold.

(ii) to protect its members against dishonest traders or employees. (iii) to maintain standards with respect to service and hygiene.

376. The Company makes certain financial demands upon its members- , (a) an annual subscription of 5s. for every ton of weekly turnover. (b) levies not exceeding lOs. per ton of weekly turnover. (c) a cash deposit or fidelity bond for bakeries with a weekly turnover of-

1--4 tons £100

4-10 " £200

10-50 '' £400

over 50 , £1 ,000

128

377. :Members selling bread below the agreed price, or selling to unlicensed vendors, or taking back stale breR.d, or obtaining fresh cnstmners frmn other members by taking over carters (except by agreen1ent) are liable to fines not exceeding £50 for each breach of the by-laws, provided that the total fines of any member in any year shall not exceed twice the amount of his

deposit. 378. Members taking wholesale or shop customers from other members by breaches of the memorandum or articles of association or of the by-laws, are liable to fines of between £10 and £60 per 100 loaves per week so diverted.

379. The immediate result of the fo rn1ation of this Company was the stabilization of the industry. 380. In view of the condition of the industry before this action was taken, and of the desirability of reform coming from within, rather than without, the Commission offers no criticism of this action, provided that the interests of the consumer are protected by a Bread Board as recommended in Report.

(b) FIXATION. OF MINIMUM PRICES.

381. The Iv.Iaster Bakers' Ass ociation in most cities attempts to fix minimum prices below which their members should not sell bread. One main objective is to conserve the custom, which has grown up in the trade, of delivering bread to householders. For this reason the Associations first fix the prices of bread delivered to the custmner, and then prices at which bakers should sell their bread to shops and the prices at which it is desired that the shops should resell the bread, the last-mentioned prices being as near to the household delivery prices as circumstances permit.

382. Although the maintenance of minimun1 prices is very desirable from the point of view of the master bakers, yet fundamental considerations suggest that it is likely to be a matter of incessant difficulty. The actual costs of delivery are not the same in all districts. The distances between individui:JJ points of delivery vary and so also does the quantity of bread required by different households. Consequently , a baker's carter may be able to deliver only half to two­ thirds as much in a day in one suburb as he would in another. This may mean a difference in actual cost of distribution of as much as 0. 5d. per 2-lb. loaf. If the minimum price is fixed high enough to be remunerative in the better class suburb it may be unfairly high in an industrial centre where costs of delivery are less. Thus, an opportunity may be presented for a "cutter" to commence operations. Any logical scheme of price-fixing would of necessity be complicated and any one fixed price for all localities in a big city would be unjustifiable and, in the end, untenable.

383. Evidence has shown that in some cases where the Associations have endeavoured to fix prices at a low level to meet competition, some bakers, considering that they personally were unable to make profits at such prices; have either left or refused to join the Association because they considered they were being endangered by the price-fixing principle.

384. The Associations have seldon1 been able to obtain complete uniformity of action in respect to the maintenance of prices by their members. The degree of success has varied from district to district and from time to time. Where members have lowered their prices in order to meet the competition of "cutters", the Associations have at times endeavoured to persuade them not to do so. The results have been varied; sometimes the bakers concerned

have left the Association, sometimes they have readjusted their prices, and in other instances they have remained as members and the Association has recognized that the circumstances were such that rigid adherence to the policy could not be expected. In at least two capital cities the system of fixing minimum prices had to be abandoned in order to retain the organization and allow 1nembers to compete effectively with price-cutters.

385. In paragraphs 313 to 316 it was shown that the sale of bread to shops was especially attractive to the small baker strw:rgling for establishment, because it provided more opportunities for cutting. Naturally, the master bakers' organizations have been specially clamant in the matter of the price charged to shops resale. In centres bakers,have that

the same price should be charged to the pubhc for bread sold over the counter as for dehvered bread. There i no justification on economic grounds for such a principle. However, this matter requires careful consideration in order to arrive at the best compromise, having in view the interests of the consumers and the desirability, if not"'necessity, of a .stabilized industry of

If there be no control of the industry by legislation, expenence has shown that a Wide spread between the price of bread "over t he counter" and price delivered introduces serious complications affecting the stability of the industry, partiCularly when a ve.ry large number of shops offer bread for sa]e often as a "catch line :'. If number of shops be p_laced

under control and the conve-:nien,ce of the pubhc be given all necessary consideratiOn, and If the

129

price of ".over the counter" be adjusted according to the size of the· individual purchase, so to assist. the .people who buy bread from the shops regularly because of the saving obtained, a approximatio:r: to an acceptable compromise may be found. In the consideration leading to Its recommendations the Commission has given the results of its study of this important problem.

(c) METHODS OF FIGHTING OR CONTROLLING COMPETITION. 3-86. The stability of the bread-baking industry is of importance not only to the industry itself ?ut als0 to the flour-milling industry, which is interested both directly and indirectly in its financial success. As the conditions within the bread-baking have becon1e seriously unstable, funds have been raised, and placed at the disposal of special committees, for purposes such as· are n1entioned in the following paragraphs. ·

387. In a few cases and to a limited extent these funds have been used to give a special grant, on a per ton basis, to bakers who were being very hard pressed by cutters; under which circun1stances the baker concerned has agreed to maintain his price in accordance with the declared price.

388. Occasionally the funds have been used to purchase the entire businesses of bakers who were starting in with the idea of cutting prices in order to establish thernselves. In one instance it was alleged that a man had opened such a business with the ulti1n ate object of being bought out by a grant from the fund; somewhat naturally this charge could not be proved and

was vigorously denied. 389. In various States there have been several instances in whicn old bakehouses were rented and kept closed in order that they should not be available for renting by prospective bakers who rnight wish to start business in them and cut local prices. In one instance it was stated that a bakery was rented by the master bakers and kept empty for some considerable time so that the owner himself should not commence bread-baking operations in it.

390. This procedure of using n1oney, derived presun1ably frorn profits, for the purpose of stifling or preventing competition requires special consideration. From the point of view of the individual baker it n1ay be money well spent. For instance, a man with a " 10 ton " business selling about 13,500 loaves a week sees a 1-ton bakery in the centre of his district vacant. He may find that he can rent the bakery for £1 per week and keep it closed and he knows that by so doing he will be increasing his overhead costs by less than 0.02d. per 2-lb. loaf. If he takes no action and the bakery is opened by a price cutter he may well have difficulty in maintaining his price with son1e of his custorners. He may even anticipate having to reduce his price on, say, 600 loaves a week by a halfpenny per loaf. This would entail a loss of £1 Os. 5d. per week­ i.e., more than the rent he is paying-and in addition he may lose certain customers which would

mean a smaller output available to carry his overhead charges, and a further loss. Under conditions existing in the industry, where there is no danger of monopoly, no blame can be attached to organizations or individuals for taking such action. Fron1 the point of view of the consumer, payrnents of this kind are disadvantageous because they lead to a waste of money and manifestly tend to keep overhead charges at uneconon1ic levels.

391. The low standard of equipment in bakehouses which calls for only a sn1all capital expenditure on a n1inimum basis makes competition in the industry comparatively easy, particularly if the buildings and ovens are available on a low rental basis. If the standard of equipn1ent were raised to a level more in accordance with the best interests of the health of the community, there would be less opportunity for competition of an undesirable type. In the Report on the Bread Prices in the metropolitan area of Sydney addressed to His Excellency

the Governor of New South Wales, in March, 1935, by Sir Herbert Gepp, the following recommendation was made:-That in the interests of public health the Government of New South Wales consider the advisability of appointing an inter-departmental committee representative of the Department s of Labour and Industry and of Health to investigate and submit recommenda'tions with respect to (a) the alteration and improvement of present laws and regulations governing the buildings, plant and equipment used in the manufacture and distribution of bread, and (b) all other matters appertaining to the conduct of the industry.

392. This matter is dealt with in more detail in the findings and recornendations of this Report. .

393. A further method which has been employed in an endeavour to prevent price cutting is the withholding of supplies of flour and yeast to cutters. Generally .this method has been ineffective, although considerable inconvenience has been caused mdiVIdual bakers for short periods. A determined baker has always found the 1neans of purchasmg flour and _yeast.

In certain cases the State Governments have rr1ade clear that they would not permit the continuance of actions which would lead to the co n1plete cessation of supplies.

130

394. The amount of bread baked by house:wives in their own homes has increased during the last few years and this practice has led to some diminution in the quantity of bread bought. In at least one State yeast manufacturers have declined to supply yeast to other than bakers, and the bakers have adopted a similar policy. Although the policy is not completely effective, representatives of housewives have had to meet difficulties in obtaining supplies.

. · 395. A system of licensing has been suggested to the Commission as a method of preventing the opening of unnecessary small bakehouses. This method would deal with the problmn in a direct way, but would require careful managen1ent in order that the interests of the consuming public should be well protected. No system of restriction by registration and licensing would be in the best interests of the public unless there was sufficient supervision or control of the prices charged for the products of the industry. Maximum price fixation is in operation in

Queensland and agreement between the Government and the industry regarding maximu1n prices obtains at present in the metropolitan area of Sydney. The declaration as to fair prices and maximum prices by a responsible and acceptable authority, whilst not n1andatory, does assist the industry. Under such a system a number of consumers accept the decision because any suspicion that they are being charged unfairly high prices has been removed from their minds. The history of, and the present conditions prevailing within, the industry, prove that the fixation of the minimum prices by the industry itself, is usually ineffective, particularly during periods of depression and consequent unemployment. ·

/

SECTION VIII.-OTHER FACTORS OF IMPORTANCE TO THE INDUSTRY.

(a) THE COURSE OF PRICES OF FLOUR, BREAD, AND WAGES IN EACH STATE ..

(b) CoNsUMPTION oF BREAD (c) THE QUALITY OF AusTRALIAN BREAD

(d) RELATIONSillP TO SIDELINES

(e) THE PROBLEM OF SCIENTIFIC AND TECHNICAL EDUCATION WITHIN TilE INDUSTRY

PAGE .

135 136 138

145 146

/9-'?4

/6

/5

/4

/3

/E

4 5

/ 9Z4

133- 134

PRICES DF FLOUR AND BREAD IBE!4 TD 1934

/9-'?S /9.26

/ 925 /926

ALL STATES. F"L OUR PER Tl:JI"V VVIYOLESALC BREAD PER E'LB- LOAF, /"""R CASH 0EL/I£"REO --­ W.A6£"S(OPE.Q.o1TIVE BAKER_) PeR V\.f"EK --------/927 / 9-'?8 /.929 /930 / 93/ /932 /93'3

/929 / 9 3 0 / .9::?1 / 93,2 / 933

FIG. XV.

8

-ri

5j

5

4j

------- 3

135

VID.-OTHER FACTORS OF IMPORTANCE TO THE INDUSTRY. (a) THE COURSE OF PRICES OF FLOUR, BREAD, AND WAGES IN EACH STATE.

396. Figure. XV. shows the Commonwealth Statistician's monthly average of the prices of flour and bread 1n each State.* The wages of operative bakers, ascertained fron1 State official sources, are also shown.

397. The Graph is intended to illustrate prices only. The height ordinates of bread, flour and wages are so superin1posed on one another as to keep the graph a convenient size, and the scales are not proportionate. The spread between flour and bread prices is illustrated by a series of graphs in the Com1nission's Report No. 5.

398. The prices of wheat and flour in the various States are dealt with in the Con1mission's Report on the Flour Industry-Report No. 4. As there stated, the general trends of the wheat and flour graphs correspond fairly closely . On the other hand the bread graphs of the different States do not correspond at all closely. Bread prices in Sy dney and Brisbane were affected by State flour" taxes ", the fonner in 1931, 1932. &nd 1933, and the latter in 1931 and 1932.

399. There was a general fall in the price of bread in 1930, rnore pronounced in some States than in others. Except when flour taxes were in force, the level then reached was maintained in all States throughout the depression. The fall was due mainly to the fall in the prices of wheat and flour, but was influenced to no small extent by the competition of operatives who lost their

employment, commenced business as bakers and undercut their late mnployers.

400. A study of the flour and bread graphs will show t hat the bakers have not as a practice altered the price of bread to correspond to alterations in the price of flour except when the latter have been considerable. Flour is a major item in the cost of bread, each alteration of 5s. per ton,. in the price of flour affecting the cost of a 2-lb. loaf of bread by approximately .045d. In

some States, the price of a 2-lb. loaf of bread is varied only in minin1um spreads of !d. In others, the unit is -!d. When !d. is the unit, then an alteration in the price of flour of £2 15s. per ton is necessary to demand or justify an alteration in the price of bread. In another portion of this Report is discussed the desirability of n1aintaining a closer relationship between the price of

flour and the price of bread and of reducing the 1nonetary unit, or decimal of ld. per 2-lb. loaf, upon which changes in the price of bread are based.

401. On account. of the nurnber of factors operating, conclusions from these graphs rnust be drawn with care. The report made by Sir Herbert Gepp on the bread industry in Sydney indicates how difficult it is to draw conclusions unless the closest study of every factor involved has been made. Thus between 1925 and 1930 there was a general downward tendency in the

price of flour which was not followed by a corresponding tendency in bread prices. This period was one of marked industrial prosperity and a general rise in the price level of most materials, rents and wages; at the san1e time in most industries a period of wide margins of profit.

402. The New South Wales diagram is particularly interesting because, despite the fall in flour prices of this period, the price of bread rose. This is partly explained by the introduction of "day baking," as this change involved some reorganization of methods in the industry ; in addition there were increases in the wage rates and the hours of work were reduced from 46 to 44 per week.

403. There are so 1nany factors that it is impossible to draw conclusions with certainty. It is clear that variations such as .those shown by the graph have different explanations under different conditions and that it is consequently quite impossible, without devoting to the inquiry an amount of time unwarranted under the circumstances, to make a detailed historical review, The future is much more important than the past, particularly if a system of direct relation between the price of flour and the price of bread can be introduced.

404. The prices used in the compilation of the .bread the average retail prices of bread delivered to householders, and do not take Into consideratiOn the fact that they may not be directly relative to the prices of wholesale bread. For instance, in Sydney abo.ut per cent. of the bread by bakers is sold and the. average. wholes.ale pnce 1s not

necessarily related uniformly to the average retail delivered pnce. Th1s relatiOn has altered

• The nrices of bread are for cash, delivered. They are as certained the Co mmonwea lt h from particulars furnished to him on 15th of

acb month b a number of selected retail bakers scattered t hroughout the ctty and of each capital. . . , . . .

e The sti'tist in each State of the Commonwealth collect s part iculars of flour pnces and forward. them to the Comn:onweal . h Stat1. !Clan Ca nberra. I n three States, New South Wales, Victoria and Australia, the p rices _us ed .ar e th e_ average of the daily or wee kl y quotat:ons publt ·hed m the local pre8s . In Queensland and Western Australia, average pnces are fl.xed on data supplied by the rrullers.

136

considerably over the last thirty years and even now is not constant for any length of time as between different parts the metropolitan are.a of S:ydney (see Sir Herbert Gepp's Report, March, 1935). Consequently this survey of the relative prwes of flour and bread can be of a general nature only. ·

(b) CONSUMPTION OF BREAD.

. 405. The amount of bread consumed per head of population is naturally a most important factor in the welfare of the baking industry. Representatives of Master Bakers' Associations and many, although not all, of the bakers themselves, have stated that the consumption of bread has declined markedly during years. However, the individual paker is not always in a position to form sound concluswns on the matter. He may have experienced a decline in · demand for the bread produced in his bakehouse, largely due to increased competition. He may be aware that individual fan1ilies are, in certain cases, taking less bread than formerly, possibly due to an alteration in the habits of people, or even in the ages of the members of the family, for when children are at home to all meals, the position will be somewhat different from what it is when they grow up and begin to take lunches with them for their midday meal or when they obtain it in restaurants in districts where they work.

. 406. The Commission considered that an inquiry from a large number of individual householders scattered over a wide range of districts in each State was not justified. Such inquiry would have established the position as it stands to-day, but, inasmuch as no comparable data were available for previous periods, it would not have indicated whether there had been any marked change in recent years. An exa1nination of the amount of bread sold by individual bakers' carts in various districts has been made and is submitted in paragraph·348. This evidence is, however, not conclusive because many households obtain only portion of their requirements from carts and portion from shops and 1nany individuals obtain meals away from home.

. 407. It was, however, practicable to get an estimate of the amount of flour used for bread by using the records of production of flour as supplied by the Commonwealth Statistician ..

408. Table 64 illustrates the method which has been adopted for the purpose of arriving · at the estimated consumption of bread per head of population. The figures at the last five statistical years 1929-30 to 1933-34 have been considered to supply the more recent movements. The average figures for the five years period also, have been included so that the table presents informative comparisons:-

(a) The gross production of flour in the Commonwealth during each year. (b) The net exports of flour. (c) The balance representing Australian consumption of flour assuming that the stocks . carried from year to year are approximately the same. (d) Flour used in factories for biscuits and pastries together with an estimate of flour

used for domestic cooking and other purposes. .

(e) The balance of flour available for bread productioit. (j) The bread produced from available flour on the basis of 1,330 2-lb. loaves to one short ton (2,000 lb.) of flour. ·

(g) The mean of the population. (h) Bread consumption in lbs. per head of population. (i) Bread consumption on basis of 2-lb. loaves.

409. The dependability of the table n1ay be assailed were there any material variation in the quantity of the flour stocks carried from year to year. .

410. The C01nmonwealth Year Book 1934 (page 568) shows the stocks of flour carried by millers compiled from information collected from the trade to be as follows: -November, 1929 1930

1931 1932 1933

Average stock of five years

Tons.

93,825 77,066 80,052 85,658 86,638

84,648

137

TABLE 64.

CONSUMPTION OF BREAD AND FLOUR-AUSTRALIA.

1929-30. 1930-31. 1931-32.

-

Quantities. % Quantities. % Quantities. %

(a) Production of flour .. . . tons 1,136,865 . . 1,179,698 . . 1,270,215 . .

(b) Less net -exports .. . . tons 465,692 . . 524,191 . . 610,828 . .

(c) Balance representing Australian con-sumption .. . . tons 671,173 100 655,507 100 659,387 100

(d) Less .flour used in factories for biscuits, &c., and used for household and other purposes .. . . tons 171,672 25.6 166,302 25.4 164,596 25.0

(e) Flour available for bread .. tons 499,501 74. 4 489,205 74.6 494,791 75.0

(f) Bread produced from flour available (1 ton of flour-2,660 lb. of bread) lb. 1,328,672,660 .. 1,301,285,300 . . 1,316,144,060 . .

(g) Mean population .. . . . . . 6,432,796 . . 6,498,063 . . 6,553,218 . .

(h) Consumption of bread per head per

annum .. . . . . lb. 206.55 . . 200.26 . . 200.84 . .

(j) Consumption of bread per head per annum 2-lb. loaves 103.27 .. 100.13 . . 100.42 . .

1932- 33. 1933-34. Five Years Average.

-

Quantities. % Quantities. % Quantities. %

(a) Production of flour .. . . tons 1,319,250 . . 1,238,568 . . 1,228,919 . .

(b) Less net exports .. . . tons 631,392 . . 542,443 . . 554,909 . .

(c) Balance representing Australian con-sumption .. . . tons 687,858 100 696,125 100 674,010 100

(d) Less flour used in factories for biscuits, &c., and used for household and other purposes .. . . tons 166,905 24.3 169,619 24.4 167,819 24.9

(e) Flour available for bread .. tons 520,953 75.7 526,506 75 . 6 506,191 75.1

(f) Bread produced from flour available (1 ton of flour-2,660 lb. of bread) lb. 1,385,734,980 .. 1,400,505,960 . . 1,346,468,592 . .

(g) Mean population . . . . . . 6,604,749 .. 6,655,093 . . 6,548,784 . .

(h) Consumption of bread per head per

annum . . . . . . lb. 209.81 .. 210.44 . . 205.61 . .

(j) Consumption of bread per head per annum 2-lb. loaves 104.90 .. 105.22 . . 102.80

NoTE.-This table demonstrates the way in which the data for consumption of bread in Australia have been arrived at. The figures in the second last line are those used in the second column of the following table :-TABLE 65. SHOWING FOR THE COMMONWEALTH THE QUANTITY OF BREAD CONSUMED PER CAPITA DURING

THE YEARS 1918-19 TO 1933-34 BOTH ANNUALLY AND AS A THREE YEAR MOVING AVERAGE, AND ALSO THE PERCENTAGE OF UNEMPLOYMENT AMONG TRADE UNIONS FURNISHING RETURNS.

Year.

1918-19 . .

1919-20 . .

1920-21 . .

1921-22 . .

1922-23 . .

1923-24 . .

1924-25 . .

1925-26 . .

1926-27 . .

1927-28 . .

1928-29 . .

1929-30 . .

1930-31 . .

1931-32 . .

1932-33 . .

1933 34 -

Estimated consumption of bread.

Quantity in lbs. Runn ing average of three years. •

. . . . 221 ..

. . .. 195 209

. . .. 211 200

. . .. 194 204

. . .. 209 199

. . .. 195 204

. . . . 207 211

. . .. 230 215

. . .. 209 216

. . .. 208 200

. . .. 183 199

. . .. 207 197

(

200 203 . . .. . . . . 201 204

. . .. 210 207

210 . .

• The figur es in this column are opposite the middle year of the period on which the average is bas ed. t Percentage of unemployed among members of trade unions which furnished returns.

Unemployment.

Per cent.t

6.2 6.5 8.8 10.2 8.2 8 .0 8 .8 8. 0 7 .0 8 .9 11 .0 15.2 23.3 28.2 27.0 23.0

138

411. It can therefore be accepted that there is a reasonable regularity in the quantity 0£ stock carried by the mills at the annual stocktaking dates, and, consequently, that the methods adopted should serve for all practical purposes. 412. It 1night be observed from the table and the stock figures that the following considerations are evidenced:-

(a) That the quantity of flour exported is a little less than half the total flour produced in Australia. (b) That of th_e home or local consump_tion of flour in for the last five years, approximately three-quarters 1s used for bread-makrng and approxi1nately

one-quarter for other factory or domestic purposes. (c) The average of the stock to. about 12! cent. of the average

annual consumptiOn of flour, thus 1ndwatrng an approximate stock movement of about eight times per annum.

413. Table 65 shows in its second column the consumption of bread per head of population as estirnated by the above n1etho!I for each of the statistical years 1918-.-19 to 1933-34. It will be seen that theTe are fairly wide fluctuations from year to year in most parts of the period. These are explicable by the nature of the approximation employed, particularly in respect to the stocks of flour. However, any variations on the latter score should adjust themselves if the average of stocks held by millers and bakers over a period of years remains practically constant.

414. The third column of the table shows the result of calculating a three-years' running average of the per capita consu-mption. It suggests that there have been considerable fluctuations to the extent of about 9 per cent. during the period under review. These fluctuations have taken place in both directions, and while there have been considerable changes during the post-war period, the average consu1nption to-day is not very markedly different fron1 what it was in 1918-21.

415. An effort was made to establish a correlation between the general economic position in the community and the per capita consumption of bread. The percentage of unmnployed among members of trade unions furnishing unen1ployment returns is shown in column four of the table. It is realized that these figures are by no means perfect indicators of the unemployment position in the whole of the comrnunity, but they are the best available. A comparison of the figures of column three and column four indicates that the period of least unemployment corresponds with the period of rnaxirr1u1n bread consumption, that the onset of the depression during 1928-30 caused a 1narked decline, and that this decline was followed by some recovery between 1931 and 1934. During the earlier years of the table, for instance 1918-19, when unemployment was low, the consun1ption of bread was high and a minor increase in unemployment in 1921-22 resulted in a decline in consu1nption.

416. There are at least four factor.s affecting bread consumption when hard times occur. The first is a tendency to be more careful and avoid waste; the second is a tendency to eat less because there is less money to spend, but this is largely counteracted by the third, which is a tendency to eat 1nore bread because that comn1odity is the cheapest food available; the fourth is the fact that a man who is actively employed has a better appetite and a greater physiological demand for food than the rnan who is both workless and inactive.

417. It has been suggested that the increase in special breakfast foods is an important factor in reducing the consumption of bread. -Undoubtedly these foods reduce the consumption of bread and milk and of porridge and, to a smaller extent, sliced bread. However, the Commission considers that the use of special cereal foods is not a major factor.

418. While the data which have been presented indicate that a general decline in bread consumption is by no means evident, although fluctuations have occurred, they do not necessarily indicate that the great majority of the bakers have not experienced a considerable decline in the de1nand for bread. The number of bakeries has increased and the proporti9n of sales of bread to shops has also increased. In country districts where the price of bread is

usually higher than in the cities, many farmers' wives bake bread on one or two days during the week. These factors contribute to a diminution in the demand from many individual bakers and particularly of bread delivered to households.

(c) THE QUALITY OF AUSTRALIAN BREAD.

419. During the period of its operations the Commission has made many observations on the quality of the bread, including that which its members have eaten in various parts of the Commonwealth. The observation has left no doubt that the standard attained by bakers is very variable and that the quality reached in some districts is much higher than in others.

139

Although there may be roorn for difference of opinion as to what are the exact qualities characteristic the first-class loaf, yet it seems certain th2 .. t son1e of the defects should be avoidable. 420. The Australian public is said to lack discrin1ination in respect to the quality of the bread which it eats. The Cornrnission agrees that this view is, in general, correct, although some people are definitely particular in respect to the quality of the bread supplied to them. The lack of general interest in this question may well be a reflex of the lovir average standard of bread which is frequently produced.

421. The failings which are com1nonly encountered in a percentage of the loaves genendly supplied to the public are nun1erous. In respect to aroma, the general standard seen1s to b·e fairly good, the only criticism generally applicable is that the bread tends to have too little aroma, although occasionally loaves were found which, when clo sely s1nelled, had an odour which was definitely sour. It seerns probable that the general introduction of standardized yeasts and the consequent elimination of the chances of sour liquors being used, have been largely responsible for lack of defects in this rega:rd; son1e old-t ime bakers have attributed the lack of definite agreeable arorna to the san1e ca-use, but the Con1mission inclines to the view that the re?"son is to be sought in other directions.

422. The character of the crust is one of importance to the housewife ; burnt crusts 1nean a possible loss of weight and are therefore dangerous to the baker ; also they are not in common demand. However, in all bakeries inspected, the Co1nrnission has not encountered a large number of such instances . A more frequent trouble is that a -vvell-baked crust ma:z lose its _prispness and become dull and leathery after a short period. In some cases where the crust

has come into contact with the container in which it was baked a tough and alrnost· corny layer, which is extremely unpalatable to most people, has been found. The cause of this trouble is the collapse of the dough in the affected region. 423. The crurnb of a good loaf should be reasonably uniform. When two loaves are baked together, the texture of the crun1b revealed when the loaves are separated should be flaky so that when tested the cru1nb can be peeled off in thin layers ; this feature is partly induced by the working given to the dough and is to son1e extent an expression of the quality of the dough

mixture. A loaf of this t ype will have a texture in the c.run1b which is spoken of as "sweeping texture ". On the other hand, a loaf which has not a fla ky t exture at the end where it was joined or "married " to another loaf, will have a crumb which is called " honeycom9 ", and in this case, the loaf tends to cru1nble when cut and to give a dry sensation when eaten. There should be no patches of uncooked or partially-cooked n1aterial in the crun1b. Where such patches

occur, their cause is usually either faulty, but especially insufficient, r_o_ixing of the dough or the adhesion and incorporation of rather too much dusting flour during the final working of the loaf. The size of the nwsh of a loaf should be fa irly even although some variability is to be expected in this respect, particularly in French and other loaves of a sin1ilar

424. Apart from the occurrence of such specific disabilities the foregoing, much Australian bread is neutral or dull in fla vour and it is a s1nall wonder that n1any people regard it merely as a vehicle for other foods of a more tasty nature. Quite an appreciable amount of bread flavour is lost in the oven through faulty oven construction and operation including the wrong n1anipulation of the oven .daJr:npers. In the case ;._of type the. quality

of the fuel used and the temperature of the oven before uhe batcn or dough p1eces 1s run Into the oven are of considerable importance in 1naintaining the natural flavour. There is undoubted flavour present in most Australian soft wheat s, but too long a process in the dough and too cool an oven are vital factors which cause the loss of natural wheat fla vour. Under such circu1nstances, the housewives' main concern in respect to the bread is somewhat naturally in

regard to its price, and any question of qu:?ulity is largely a secondary consideration. On the other hand, in many parts of Australia visited, there were cases of bakers who gave evidence to the effect that they had been able to increase their sales solely because of the superior quality of their product. In some cases the the and came to the

conclusion that there were reasonable grolu1ds ror accept1ng the cla1m as JU Stified.

425. The Con11nission realizes that criticism is easy and that the ren1edy for the unfortunate state of affaira which has been out lined n1ay not be si1nple. It has · endeavoured to appreciate the nature of the difficult ies which confront the baker, and in order to explain thmn, a. very' broad of what happens when bread 1s made and where the troubles

are likely to anse, seerr1s desirable. 426. Briefly, dough may be regarded as a yeasty, aqueous paste of. gluten containing starch. Mixing the paste causes both starch and gluten swell and, dunno the process of fennentation in the dough the g3Js developed by the east mfiates the framework of the gluten,

F.403.-8

140

which is then baked before it has time to collapse. Some observations on gluten maltose diastase and strength in wheat and flour by Dr. L. W. Sam.uel, Cereal Research Officer in the Department of Agriculture, Western Australia, are contained in Appendix E. The dough-making stage To£ the bread-making process is c01nplicated aJ?-d rDay: go

:vrong In a . large num.ber of 1n the first place, the yeast 1nay not sat1sfactonly ;

It 1nay not make sufficient gas durmg any stage of the process, and consequently the loaf may fail to rise to the desirable extent ; alternatively, the yeast may make too 1nuch -gas. Failure on the part of the yeast itself is no-vv no longer excusable, because st andardized yeasts are available. But yeast is a fungus plant and supplies of sugary L'la terial are necessary for the pron1otion

of its activity. T·herefore, if these supplies are not forthcoming even the best yeast will not work. Flours differ remarkably in the extent to which they liberate sugars for the action of the yeast. Deficiencies in this respect can be overco1ne to a large extent by using a certain amount of flour made from malted wheat or by the addition of Inalt extracts or other yeast foods.

428. Theoretically, the action of the yeast should reach the desired level at the tir11e of baking. If the period of fennentation has to be reduced owing to the quality of the gluten or for other reasons (see paragraph ll) it is then necessary to accelerate the yeast's activity which can best be done by increasing the amount of yeast, or by an1ending the t mnperature.

429. The quality of the gluten in the flour is more important than its quantit y. The texture and size of the subsequent loaf largely depend upon the condition of the gluten in the dough at the tin1e of baking. The problen1 is complicated because the physical characteristics of the gluten in a dough change as the process of fermentation proceeds, so that there is a more or less specific critical period in the life of a dough after which its quality falls off rapidly. If, therefore, the optimun1 point of fermentation has not been reached before this deterioration has set in the resultant bread rna y be inferior in quality-;

430. During the last few years certain scientific workers investigating flour quality have suggested that the physical condition of the starch in the flour is of great irnportance and the Commission considers that research into the manipulative technique of flour -milling should be instituted in Australia. It must be understood that the starch in flour is in the form of definitely organized. starch grains, most of which are embedded in thin protein coverings. It has been observed that the degree of grinding in the 111ill may influence both the protein covering and the outer portion of the starch grain. Damaged and naked grains behave quite differently from protein-covered grains, both in respect to the arnount of sugar they liberate and the way they affect the physical texture of the dough. It has been suggested that "over-ground" flours produce loaves which tend to become stale with undue rapidity. As it is quite clear that rapid staling, which n1ust not be confused with "drying," of bread is a serious defect in bread in many

parts of Australia to-day, from the point of view of delivery, this point is of considerable importance.* 431. Assuming the flour is of a reasonable bread quality, failure to make good bread may be due to errors which fall into t-wo groups; on the one hand failures to gauge the flour and set the process correctly and on the other, failures in manipulative t echnique.

432. As regards the forn1er group, the baker can exercise considerable control over his material by 1naking alterations in his process. Thus: he c2Jn vary the amount of yeast, the amount of wat er, the aJmount of improver) the terr1perature at which the dough is held, and the period of fermentation; while the temperature of the oven and t he length of time during which the bread is baked give other obvious opportunities of control. Lack of judgment in respect to any one of these rnajor fa ctors leads to the production of indifferent bread, and unless flour and yeast are standard in their behaviour the baker may well be forgiven for making occasional errors.

433. The other group includes the less excusable ways in which bread can be spoilt, for instance bv not working the dough sufficiently or by overworking it at any stage ; further the dough lurnps n1ay be allowed to dried surfaces during. the pro -ving by the .absence of humidity control or too much dusting flour 1nay be used With t he result that It enters Into the dough and makes a streaky loaf. _

434. While the latter group of errors are the ·result of bad craftsmanship, defects due to the failure of bakers to assess the inherent qualities of the flour can be readily understood. While 1nost 1nillers endeavour to produce regularly a flour which js st andard in its behaviour they find it difficult. to. do so . at present the only reasonably good flour. test

available in Austraha Is that of balnng an expenn1ental batch of bread. Some flourmlllers obtain the assistance of bakers for this purpose, but they are ready t o admit that they find it difficult to give information to their custon1ers in respect of their product. • In many households, bread is in :tn open, pantr:r t o dry out or in a closed. earthenware crocl.{ or tin- lined and non-ventilated brea.d

cupboard. Bread keeps best if wr apped mclean dish- cloth mat en al and placed m an crock w1th a very porous lid such Bread stored m this

manner does not becom e leathery and keeps remarkably fresh se:veral If br.eacl. are used, they sh ould be prov1ded some si?all means of

ventilation inst ead of being entirely air-tight. Schools of domest1c scwnce m1ght we llillYe JDstructwn r egard!Dg the correct manner of keepmg bread m the home.

141

435. The larger and more progressive bakers often 1nake a practice of baking a trial dough from each new consignrnent of flour, but the nun1beT of variable factoTs with which they are confronted is large. It rpust be admitted that at present it is not always easy to bake a good loaf from a new consign1nent of flo ur, particularly in Victoria, where the baking quality of the flour produced fron1 f.a.q. wheat is lower than in the other States.

436. The highly-skilled baker, by suitably a1nending his procedUTe, can do much to maintain a standard quality of bread. The Conn11ission has been forced to the conclusion that a good deal of the poorer quality bre3Jd is due to lack of attention Ol' skill Ol' knowledge. or any one of these, on the part of som.e of the bakers. At the san1e tin1e it is adn1itted that the present lack of specific n1ethods of defining the technical attributes of flours is a definite hindrance to progTess, particularly in bakeries which are working at high pressure.

437. In this connexion it is interesting to note that a European scientist has Tecently invented 1nachines which, it is alleged, give an accurate analysis of a flour in respect to both diastatic capacity and gluten quality. These 1 11achines are expensive and up to the present they have not been introduced into Australia, although success is claimed for them in other widely-separated parts of the \vorld. If, when introduced, they prove to be as effective as is claimed, then it will in future be practicable for the flourmiller to issue safe recon1mendations in respect to each consignrrwnt of flour that he sells. However, opportunities for making n1istakes would still occur in every bakehouse, and the need for an effective schmne of training for bakehouse opeTatives, at present largely lacking, would still remain.

438. The Commission has been m.uch exercised with the quality of various Australian flours, notably those of son1e Victorian 1nills. Several tests of various flours and rnixtures of flours were made. Mr. \V. R. Jewell, NI.Sc., F.I.C., Agricultural Research Chen1ist to the Victorian Government, kindly undertook the supervision of the tests for the Commission. Mr. S. R. Cowley, of Nycander and Company Proprietary Limited, courteously acted as technical expert and judge of the bread, and I\1essrs. \V. and B. Stockdale kindly allowed the tests to be carried out in their bakery. In one series of tests carried out in September, 1935, the following flours and flour mixtures were used- '

No. 1 Victorian flour alone. No. 2 Victorian flour plus a comn1ercial Bread Improver. No. 3 Victorian flour plus a commercial Bread In1prover, plus 10 per cent. Canadian prmniurn flour. No. 4 Victorian flour plus a con1n1ercial Bread Improver, plus 20 per cent. Canadian

premium flour. -No. 5 Victorian flour plus a con1mercial Bread Improver, plus 10 per cent. West Australian premium flour. No. G Victorian flour plus a comn1ercial Bread Improver, plus 20 per cent. West

Australian premium flour . The resultant bread was judged after two: thxee and five days of storage under average conditions. In this the doughs were given a standard treatn1ent so that the resultant loaves were probably not quite as good as they rnight have been had the baker known the characteristics of each before the trial and 2,djusted his n1ethods accordingly. However, this initial test showed

quite clearly, that whereas the loaf produced fron1. the Victorian flour alone was a poor type, the in1provement consequent upon the introduction of a certain ar.nount of improver was marked, although this loaf showed considerable disabilities, principally in the direction of a tendency to crumble after five days . The loaves produced fron1 . flours containing an admixture of 20 per cent. of vVest Australian " Prernium "* flour and of a similar amount

of Canadian premiu1n flour were definitely better in this respect. At this stage of the test vVest Australian " Pren1ium " flour seemed to be just as efficacious in effecting an improvement in quality as the Canadian. 439. Simultaneously, Mr . Jewell submitted the same flour mixtures to what is known as

the "standard baking t est." This test differs fro m a con1mercial baking test, in that it is designed to measure the actual strength or baking quality of a particular flour or mixture. The following result was obtained:-Loaf Volume

(c.c.).

Victorian plus in1prover, plus 20 per cent. Western Australia 1880 Victorian plus in1prover, plus 20 per cent Canadian .. r1 840} Victorian plus improver, plus 10 per cent. Canadian . . 1845 Victorian plus improver, plus 10 per cent. Western Australia L 1840 Victorian plus improver 1760

Victorian alone 1630

As

per cent.

100

98

93.5 87

* The West Australian flour here uEed was m illed from " Comeback" wheat and was descril.J ed as "Prrmiu m whea flour uch as is u cd for blending with f. a.q." in West Australia.

142

The figures indicate very clearly that the addition of a percentage of high-strength flour makes a considerable difference to the volume of a loaf when compared with one made from Victorian flour alone. The experiment also indicates the important effect which can be produced on relatively weak flours by the use of improvers.

440. Later, a further experiment was carried out with various flour mixtures baked under co mmercie.l conditions, but ·with the process amended in such a way as to produce the best possible loaf from each dough having regard to the results of the earlier trial mentioned in paragraph 438. In this series of t ests, the following flours and flour mixtures were used :-

No. 1 Victorian flour plus improver. No . 2 Victorian flour plus improver, plus 15 per cent. West Australian premium fl om. No. 3 Victorian flour plus improver, plus 15 per cent. Canadian premium flour . An addition of 15 per cent. premium of flours was decided on as it was considered more conformable with commercial practicability. The resultant bread was judged after two, six and eleven and one-half days of storage under average conditions. Figure XVI. shows the outlines of the three pairs of loaves and also gives information as to the faults which had developed after t wo and six days stomge respectively. The improvement consequent upon the addition of the 15 per cent . of either t ype of high-grade flour is clearly indicated. The loaves made from No. 2 mixture were given the same number of marks as those from No. 3 mixture after two days of storage, and when the bread was examined for freshness fl.nd shrinkage at a later stage, the loaves from No. 2 mixture were definitely moister than those from No. 3, although the latter were satisfact ory. Those who judged the loaves were not informed as to the nature of the flour mixtures until the tests Were concluded.

441. From these test s it appears that the staling of bread is reduced by a proper blendirg of flours front soft and strong wheats and that, in the test, the vVest Australian premium flour blended wit h the Vict orian ordinary flour as, or even more, satisfactorily than did the Canadian. The adoption of mechanical dough-mixers would enable ,a much better blending of flours and the incorporation of proper quantities of water which are not possible in hand dough-making.

442. As a matt er of interest the flours used in compounding the mixtures were subjected to physical and chemical tests with the following results :-I Viet orl:m . West. Aust ralia n. Canadian.

-P -r-·o-te-ir-1----,--.-.-p-e_r_c_en-"t-. / 9.50 13.25 12.37

Wet gluten . . per cent. 27.5 32 .7 30.5

Dry gluten .. per cent. 9. 6 12. 9 11. 6

Water absorption . . per cent . 50.6 58.1 56 .3

Sa nnders' Dough t est mins . 64 92 llO

On t his occasion the results obtained with the mixtures in the baking tests were in accord with the :;:esults of the physical'and chemical exa-mination. 443. The Commission is of opinion that, even if the bread were bj.tked from flour of good qu<1lity and according to correct procedure, there would still be room for improvement in its attractivenesr>. There are many kinds of bread which are sometimes termed "fancy" loaves. In some counb:cies these have a veq la1·ge sale ; in fact, in son1.e parts of the world they are almost the only kind of bread which is consumed. It is not suggested that the whole of the Australian population should be trained to demand "fancy" bread, but that the addition of certain ingredients to the dough would result in the bread remaining fresh for a longer period and also in its developing

certain s,t trach ve fe atures, both as regards aroma, t exture and flavour, which it at present lacks. 444. A number of bakers have adopted the practice of adding a percentage of certain milk product s t o their dough mixture, and the results have been beneficial both in respect to the number of loaves obtained to the ton of flour and in respect to quality. This question of the addition of certain types of dried milk pmvder to doughs has been investigated by the \Vb,eat Research Ins·bitute* of Clu·ist church, New Zealand. Worleers at the Institute have shown that, for some t ypes of dried skim milk, an increase of 2 lbs. of bread for every pound of mille powder

added is obtained within certain limits. 445. The universal adoption in Australia of a policy of adding at least 2 per cent. of dried mille t o t he dough mixture would be generally advantageous in a number of different ways. These may be summarized as follow :-

(a,) The quality and tastiness of the bread would improve and probably this would result in a greater degree of popularity of bread as a food . (b) There would be an increase in the protein content of bread, which would be advantageous as all brer.d is rather low in protein and the bread from some

Au stralian flours is definitely inferior in this respect to bread made from some other. floms. • ThiR Iust itnt.c wh icJ , i• supported !n part by t he nnd !n part by the whcat-.growin g, ft our;millin g nnd bread-baking industries of the

Dominion, is not pa r:t llel<'d by any in!;titutlon in AuatraUo.. It has mvcsttgated a large number of techm cnl problems, mtcrrn ed.late between and mclusive of tho growing oi wh eat and the quali ty of bread.

143-144

FlO. XVI. DIAGRAMS DF EXPERIMENTAL LOAVES REFERRED TD IN PARA. 440. THE rz..LL LINES" REFER 70 77-YC CONDrTIONS EXIS77N5 2 D--'IY:S' /"''FT£R

THE .DOTTED LINES REFER 7V 77-1£ CONDITIONS EX/STING 6 a.---=IYS AFTER .B-

,

11

111 I J-

• I / ''\ ( I

,11 , i , \llilllilllllillillil llilliilllllllilllil[il lli\ li[f•-

f-- :1 111, li il4,_ :)!1 !l II

) t- . - II .

3 ---- ---- j) 2 ', ____ ___ ---- ________ ) I - -- _ __ __ ---- J

145

- (c) In addition to the higher nutritive value there would also be an increase in digestibility. (d) 'I'he Australian dairying industry would benefit because a v2Juable m_arket vYould be provided for one of its products.

(NoTE.-This cost to the baker would be negligible because of tho extra amount of bread produced per ton of flotrr.) 446. It is stated that ceTtain -workers have found that dried butter n1ilk is as efi1c n.ciou" as dried skin1 milk for this purpose. This staternent requires further investigation.

447. The con1monest kind of special bread made in Australia is the Vienna loaf. This is baked in a special oven, and theoretically should have certain extra ingredients added to the dough, e.g., fats and milk or sonw form of milk product. The loaf h8Js a distinctive shape. In -Victoria, it is not governed by special regulations 8 .. s regards WQ ight, but is sold at the price

as ordinary bread. In other States, its weight is that of the oTdinary loaf, and the baker c2,n only recompense himself for the extra trouble and materials by selling at a higher price. The Comrnission has san1pled mv.ny loaves which were of the Vienna shape, but it is confident that the majority of them were not rnade from dough mi..xtures of the accepted Vienna fo rmula. There is need for legislation which shall ensure that Vienna-shaped loaves are 1nade in such a way ancl_ of such ingredients as to n1ake them vvorthy of the title.

448. 'The baking industry of Great Britain has recently launched an intensive carnpaign of advertisement with the idea of popularizing bread as a food. It is probable that a, similar can1paign in Australia would rneet with son1e degree of success, but the extent of that success would largely depend upon the care which was taken in respect to the quality of the product

which the balmrs are offering to the public as well as the educational r:.ppeal ofthe advertisen1ent.

(d) RELATIONSHIP TO SIDELINES.

449. In all States there are bakers who are also pastrycooks, some on a large scale and very 1nany others on a small scale. In the sn1allest of the country towns the only baker is frequently butcher and storekeeper also. In many instances bBJkers conduct confectionery and soft-drink shops and tea-romns and are unable to separate the financial details of their

bread-baking from those of their other business activities. TABLE 66 .

SHO\VING EXTENT OF BUSINESS IN CAKES AND PASTRY OF THOSE BAKERS vVHOSE QUESTIONNAIRES \VERE DISCARDED BECAUSE THEY DISCLOSED A MATERIAL PROPOR-TION OF PASTRY COOKING AND OTHER SIDELINES. -

I

nf I Valneol

I Pe

146

. 450 .. BaKers butchers and excused replying the

Forn1 M , . those wnwh a matenal proportiOn of

pastry-1nak1ng or of other s1dehnes ·were d1scarded from the 1nqrury +nto costs. Questionnaires discarded for this reason were, however, exarnined t o obtajn an approximate idea of the extent to which cakes and pastry are made by bakers who are also pastrycooks. The result is shown in Table 66. The figures have been taken direct fron1 the questionnaires and it has not been

considered worth while to test their accuracy by any check of t he bakers' books. 451. During the Con1mission's general inquiry, it was observed that metropolitan bakers do not, as a rule, bake cakes and pastry unless they have shops t o display their wares. are s01ne exceptions, as for instance in the case of a baker supplying shops and restaurants with cakes and pastry on a wholesale basis and in vvhich the sn1all goods trade is separable fron1 the baking industry in the accounts. The ordinary metropolitan baker cannot n1eet this con1petition.

452. Country bakers, except in large pro vincial centres, usually make cakes and pastry, in order to meet the local requirements which are not otherwise being served. 453. The table is a partial staten1ent and does not purport to reflect the extent of the cake and pastry-rnaking of Australia. Owing to the small number of Tasmanian instances which would have come under the he2vding of the table, Tasmania has been omitted lest a ·breach of confidence result.

(e) THE PROBLEM OF SCIENTIFIC AND TECHNICAL EDUCATION WITHIN THE INDUSTRY. 454. Among the many problerns which are confronting the bread-making industry to-day, one of the n1ost i1nportant is that of the education of both operative and 1naster bakers.

TRAINING BY APPRENTI CESHIP As IN VoGuE IN AusTRALIA.

455. Master bakers are required, under appropriate awards, to ensure that their apprentices are taught-the baking craft by a process of cornpe-tent instruction in a gradual and complete 1nanner. "\Vestern Australia is the only State where the apprentice is bound to undergo any technical training or general instruction other than that which may be provided by his employer. In that State, apprentices are required, under an award of the State Arbitration Court, to attend a government or otheT approved technical school vocational class, or to take a correspondence course, unless circun1stances render such procedure irt1possible to the apprentice. Furthermore, apprentices are bound to submit themselves to examination under the Registrar of the Court. The fees ·for the classes attended by the apprentice are to be paid by his mnployer, who is also obliged to place at the disposal of the exarniners such material and machinery on his prmnises as may be required by them, and to facilitate in all ways the training and examination of the apprentice. On inquiry, the Commission was advised by the Technical Education Department in Perth that "no baking instruction is provided in this State for bakers' apprentices or others entering the ,baking jndustry."

456. The Commission is satisfied that the conditions which obtain in many bakehouses in Australia preclude effective training of apprentices in the trade.

THE PosiTION IN CERTAIN OTHER CouNTRIES.

457. In certain other t echnological schools and colleges have established special courses for the purpose of training prospective bakers and, in some cases, special institutes have been built for the purpose. Master bakers look to these institutes for thei:r future employees­ men who have not only learned how tq Inake bread, but understand some of the scientific facts underlying baking, and are thus able to control intelligently the whole process. The bakery courses at 1nost of these schools include a cmnprehensive range of subjects, so that the various phases of a baker's education, viz., the practical, scientific and commercial aspects of the baking craft, are each given due consideration.

458. It has been recognized that, except in rare circumstances, the wide range of craftsmanship, and of scientific and commercial knowledge desirable in .a master baker can satisfactorily be acquired only by a full-time day course of study. 459. In England and Wales the educational side of the industry has been intensified during the present century. In London, the Governing Body of the Borough Polytechnic, in conjunction with the National Association of Master Bakers, Confectioners and Caterers, opened day classes for the industry in 1899. Evening classes had been held, however , for many years previously. Established in 1899 the National Bakery School, as it was termed, provided a course of two years duration. Later , full-time day courses extending over two years were commenced at the Cardiff Technical College (1920), the Leeds Technical College (1921), the Municipal College of Technology, · Manchester (1923), and the Birmingham Technical College (1927). Part-time day classes (usually in practical bakery and confectionery for one or two half-days a week) were also provided at the schools.

147

460. The majority of the full-tin1e students endeavour to semue at the end of their training the "National Diplo1na " awarded by the National Association of Master Bakers, Confectioners and Caterers. This diploma is intended by the Association to be " evidence of a standard of education that -should fit a student to becon1e a fully qualified craftsn1an both technically and practically." The regulations state that the curriculum for the diploma should include, in addition to bread-making and co:p;fectionery, such subjects as chemistry, physics, elementary mathematics, drawing and 1nodelling, costing, book-keeping and art. Almost without exception, the schools devote about two-thirds of the total time to the " craft " subjects and one-third t o the ancillary subjects such as science and commercial work.

461. Subjects which are dealt with under the heading " Bread-making " include the following : Wheats, flours , yeasts, fennentation, malt products, milk, fats and en1ulsions and their relation to baking, temperature control of bakeries, bakehouse hygiene, ovens, machinery, bread quality, practical bakehouse work and management, commercial problems of bread-making and dietetic values .

462. The existence of these schools is evidence of the interest taken in technical education by the leaders of the industry. ·

463. In 1934, 56 students sat for the National Association Diploma, and 569 took the City and Guilds Institute exan1inations in Breadmaking. 464. In the United States of America, as an example, the school of baking known as the An1erican Institute of Baking was opened in Chicago in 1922. Various courses may be pursued at this Institute, the main one of sixteen weeks' duration being tern1ed " Tne Technology and

Practice of Baking." It aims t o meet the needs of the baking industrY.: by concentration on modern production 1nethods. General subject s of instruction in this course include the following:­ Practical Shop Work in the Institute Bakery ; Practical Production ; Production Problems ; Operation and :l'vfanagement; Experimental Baking Laboratory; Baking Materials ; General

Science ; Chemical Laboratory ; Biology of Yeast Bacteria, Moulds ; and Fundarnentals of Nutrition, Food value of Bread. 465. A three weeks' course, termed " The Fundamentals of Baking," is offered in response to the demands from the industry for short-time courses. The course largely consists of instruction in subjects of practical interest, about 90 per cent. of the total time being devoted to the practice of bakins;. This course perrnits beginners, allied tradesm.en and bakery employees

who require a knowledge of baking fundamentals to avail themselves of instruction in the School of Baking. Some of the students later enrol for the sixteen weeks' course. 466. The American Institute of Baking has also conducted a laboratory service, which provides a way for every baker to obtain accurate information on the composition and properties of all ingredients and technical supplies that find a use in the bakery.

467. Another successful educational organization in Chicago is the Siebel Institute of Technology, which provides a H01ne Study Course of instruction in baking. The course is comprehensive and progressive, its topics ranging fron1 elementary science and mathematics and general baking technology to business management and sales promotion schemes.

468. In Canada, the bakers, prior to 1927, were to a considerable extent dependent upon their United States neighbours for the means of education as regards the making of bread and the science of the craft. 'In 1927, the members of the Bread and Cake Bakers' Association and the Allied Trades contributed sufficient money to build and equip a school where master bakers

and present .and prospective employees could r:ceive. a course of instruction

baking . . ThlS school, J{nown as the Trent Inst1t_ute, 1s the grounds of the Ontano

College, Guelph, and the co,urse of I?structwn forms of the courses

given at . this qollege. The four months course In costs .the of about

£40 in Austrahan money and covers board and residence as well as InstructiOn. The course includes the following:-(a) A study on a scale of bread and yeast-raised goods, and of different

types of dough and their proper technique. (b) A study of flours and baking materials ; their changes during fermentation and their effects as shown by the quality of the bread brought out by jndividual loaf work, on the finished product. (c) A study of the making of cake and pastry in a commercial way . (d) The chemistry of the various n1a terials used in baking. (e) A study of nutrition problems relating to human food s. (f) A course in bacteriology with reference to yeast s, mo ulds and bacteria and th ir

special relations to bread.

148

(g) A study of flourmilling including the grading and handlin !:Y of wheat and the process of milling in relation to the finished grades of '

(h) A study in ent01nology with particular reference to insects affecting bakeshops gnd means of combating them. . . ·

(i) A course in elementary to enable the prospective baker to keep more thoroughly records of costs and production and a proper set of books. 469. A flour and wheat testing laboratory is connected with the Institute where millers and bakers n1ay have samples tested for a moderate charge.

• .L 4_70 .. In Germany, there is a School of BBJking at Westfalen, \vhich provides courses of

rnsuruction Invaluable to the baking industry in that country. 471. In an address at the opening of the Trent Institute of Baking Technology in Ontario, Canada, on lith May, 1927, Dr. Barnard, the head of the An1erican College of Baking at Chicao·o said the ad.vent of science into the bakery industry had happened so recently that it

0

is

hardly yet recognized by bakers." At the SEnne gathering J\1r. Mark Breclin, President of the Canada Bread Company, said that " he remembered the. time when no operating baker felt it necessary to use a to give. him the heat of. either water, flour or dough, he believing that he had all this 1n the fe ehng of hiS hands and tlns, no matter whether he came in from a below-zero temperature on the outside or was already perspiring with the heat in the bakery."

THE PRESENT NEED FOI{ TECHNICAL INSTRUCTION IN BAKING IN AusTRALIA.

472. By gell,eral consent of all those associated with the bread-n1aking and allied trades in Australia, there is a serious and urgent necessity to raise the general standard of scientific and practical knowledge of the master bakers and operatives throughout the Com1nonwealth. Obviously the provision of educational facilities is a first necessity.

473. At the annual meeting of the Federated Master Bakers' Association of Australia and New Zealand held in Sydney, in October, 1935, the following resolution was carried:- · That the federal executive put in operation immediately the machinery necessary to set up a federal Research Institute for the benefit of the bakers of the Commonwealth. This resolution w2Js passed subsequent to the reading and discussion of a pa.per by l\1r. E. Ireland, Jnr., President, Master Pastrv Cooks' Association in Ne\v South Vlales, entitled "Technical Education in the Baking Indu;try." The character of the discussion gave a clear proof that the leaders of the industry realized the necessity for improved scientific and technical knowledge within the bread-making and allied industries in Australia.

474. According to the information supplied in response to the inquiries made by the COinmission, the only educational institution in Australia which provides a course in the science and art of bread-making, pastry-rnaking, and ornarnenting, is the East Sydney Technical College, which is controlled by the Education Department of New South Wales. At this institution there is a school of baking with a teaching staff consisting of a head teacher of baking, a t eacher

of science of bread-making, a teacher of pastry-making, and a teacher of ornamenting for pastry cooks. The course, consisting of three stages, extends over a period of three years. The students must be employed at the trade. 475. As a result of its study of the available inforn1ation concerning the educational facilities provided for the baking industry in other countries, and from its observations on the scanty knowledge and rule of thumb methods of many of the bakers whose establishments have been inspected, the Commission concludes that the inauguration of schools of baking at the principal technical educational institutions in Brisbane, Melbourne, Ilobart, Adelaide and Perth is a primary necessity. The experience gained from the operations of the baking schoQl at the East Sydney Technical College would enable steps to be taken in the other capital cities with a considerable degree of certainty regarding both the original capital cost and the annual operating expenditure. The primary function of these schools would be to teach bakehouse operatives the basic knowledge required in their trade and also to provide the more elernentary stages of the training of master bakers. This stage in the educational system may be described as the technological phase.

476. The provision of facilities for the higher stages of education in respect to baking (such as those necessary in the management of a large business) offers somewhat difficulty. 4 77. The Commission has made a careful review of the various alternatives and has come to the definite conclusion that, under Australian conditions, there is at present little justification for, and less chance of, the establishment· of a special institute specially devoted to the training of high -class men in the science and art of the calling of " mast er baker."

4 78. Considerable discussion with different people with special knowledge of this problem led the Commission to the conclusion that the fundamental scientific portion of the education required for the supervision of a high-class large-scale bakery, which must demand a knowledge

149

of all the branches of the trade of b EJJcing, can be provided by the present science curricula of the Universities of Australia or, where available, in cert ain of t he technical schools. Naturally, the person concerned would choose those subject s which were specially suitable having to the final objective.

479. After the taking of the science degree, the graduate would then pass to a special post-graduate course at the nearest or most suitable "hakin 0 scho ol at a Technical College, and thereafter would be fitted to sit for t he f-inal examinations to which reference is n1ade in (vii) below.

480. There are certain desiderat a with reference to the general plan which has been indicated in the preceding paragraphs to which the Connnission desires t o draw particular attention. They are-(i) A strong leadership fro n:1 the Associations representing the industry in the

Commonwealth and in each State. To this end, t he F ederated lV'Iaster Bakers' Association and the Mast er Bakers' Associat ion of ea ch State should co-operate both ftn ancially and in every ot her way wit.h the development and the operation of this ecluc.ational progran1me. (ii) The necessary preliminary consultation by a special conference between the

representatives of the industry, t he representatives of Universities, and the technieal branches of the Educat ion Depart1nent s with reference to all the details of the scheme of education. (iii) That the syllabus for the work in the technical baking schools in the various States

should be the same. (iv) rrhat the examination papers and the standards set for the practical exarninations in the technological phase should be identical or as nearly so. as is possible. (v) That there should be active co-operation between appropriate faculties at the

Universities and the baking schools of the different technical institutions in order to assist and advise in the arrangement of t he courses of students succeeding to the higher stage of education, to raise the st andards as high as practicable and t o keep the expense 2Js low as possible. (vi) The gradual raising of the standard of education and technical ability of all the

operatives ·within the industry leading in the end to a legislative prohibition of employinent of anyone as an operative baker who has not obtained the necessary educaJtional diplon1as. The Comn1ission is of opinion that the same regulations in this regard should apply to operative bakers who make one of the principal foods of the nation as are applied to plumbers, who deal with another section of activities related to the health of the cmnmunity. (vii) That the Federated lVIaster Bakers of Australia and New Zealand should confer

with the Educational Authorities an·d establish a Diploma of BaJking on the lines of and equivalent to the diploma issued by the National Association of 1\Iaster Bakers, Confectioners and Caterers of Great Britai1i.

,,. j

..

SECTION IX.- THE RESULTS OF INQUIRIES OVERSEAS.

,

153

D{.-THE RESULTS OF INQUIRIES OVERSEAS. 481. Information with reference to the bread industry in England, Canada and New Zealand was sought through the Australian High Commissioner in London and the Australian Trade Commissioners in Canada and New Zealand respectively. The main points on which information was sought and the substance of the replies were as follow:-

(a) Size of Bakeries.-In the three countries the size and the equipment of bakeries show a w.ide range of variation, from the one-man bakery at one end of the scale, to the establishment employing as many as 400 persons at the other. Of the 25,000 bakers in Great Britain only 2,000 use more than 5l short tons

of flour per week. In Canada, 96 per cent. of the bakeries come within the group "under 20 employees" while the average number of employees per establishment is 3. 41. (b) The Channels of Distribution are the same as in Australia. (c) Legal Weight of a Loaf.-In Great Britain it is provided that a person shall not

have in his possession for sale or delivery any loaf of bread unless its net weight is 1 lb. or an integral number of pounds. Exception is made in the case of fancy bread. · In Canada the weight of the loaf is not standardized, but is regulated

by municipal by-laws in the various provinces except in Ontario where the standard weights of the loaves are fixed at 24 oz. and 48 oz. for ordinary bread, and 12 oz. for" small" bread. In New Zealand" every person commits an offence who sells any bread the weight of which at the time of sale is less than the seller represents it to be, or is less than the weight which the buyer demands ". Certain breads are exempted, but details were not given. (d) The yield of loaves to the ton of flour is variously estimated. In Britain the

trade estimates 1,314 2-lb. loaves as the production to be expected from a short ton of flour, but it is noticed that a recent Royal Commission did not agree with this estimate. In Canada a barrel of flour (196 lb.) is stated to produce 270 lb. of

bread, which is equivalent to 1,337 2-lb. loaves to the ton of flour, or 103! 2-lb. loaves to a bag of 150 lb. In New Zealand the stated yield from flour derived from local wheat is from ! ,290 to 1,300 2-lb. loaves per ton of flour. (e) Variations in Prices at which Bread is Sold.-The prices are not uniform in any

country. In Great Britain when the retail price is 7ld. per 4-lb. loaf, the variations will be between 5ld. and std. Wholesale prices are usually 1d. per 4-lb. loaf less than retail. No information was available as to the prices of the different classes of bread in Canada. In New Zealand the approximate prices are :-retail delivered, per 2-lb. loaf; retail over shop counter,

5d. per 2-lb. loaf, and wholesale, 4ld. per 2-lb. loaf. (f) Variation of Price in Consonance with Price of Flo ur. - In Great Britain the Food Council's scale provides for a variation of td. per 4-lb. loaf with each variation of 4s. in the price of a sack of 280 lb. of flour (i.e. 28s. 6d. per short

ton of flour). In Canada bakers do not change the price of bread with every change in the price of flour. The Dominion Bureau of Statistics states that no information is available t o show the basis on which the price of bread is varied. In New Zealand, owing to the variable duty on imported flour or

wheat, the local prices of wheat and flour vary but slightly. (g) Price-cutting.-In each country price-cutting is prevalent. The advent of the depression. caused ma.ny. employees to in the

Recently, m Great Bntam , schemes have come mto operatwn to :fix mm1mum prices of bread: have by of in

collaboration with m1llers ; their method 1s t o restnct flour supplies lf the bread price is not maintained. In Canada, between 1929 and 1933, the number of bakeries increased from 2,568 to 3,079 , while the quantity of bread produced declined from · 936,000 ,000 .. t o 87 8, 000 ,00?, lb. the

period. In r egard to New Zealand, 1t Is that. Econonuc

over the past few years and the resultant mtens1fi?atwn of on a

relatively

contracted market by about a

shading of both wholesale and retail pn ces. to a pomt where of profit are negligible, and consequently to. and retailer ahke. The

position is intensified by the of distnbutwn channels to all sorts of shops and through growth of cham stores.

154

482. In addition to these inqu1nes, the Commission has also exanlined official reports relating to the bread industry in Britain and Canada. In Britain, a Royal Commission on Food Prices investigated the baking industry in 1924-25, when it was popularly supposed that the price of .bread was too high.

483. A survey of some of the conclusions of that body will be found in Appendix F.l. The close similarity between the Australian bread industry and that in Britain will become apparent from a perusal of that appendix. 484. In Canada two investigations into the baking industry have taken place in recel!t years. In 1931 , an inquiry was made under the Combines Investigation Act. This inquiry was largely due to the failure of the bread price to fall iri. accord with the price of wheat while the general industrial depression had created a demand for reduction in the price of foodstuffs.

The salient features of this investigation are set out in Appendix F.2. Prominence is given in the report to the acquisition of large sections of the baking industry by the flour-milling industry, a feature which is becoming apparent in Australia to-day. The chain stores had also entered into nroduction to a considerable extent in some centres.

485. 1935 a Canadian Royal Com1nission on Price Spreads presented a report which dealt, inter alia, with the bread industry. This report, while pointing out the importance of the influence of bakeries owned by fiour-millers or chain stores, stressed the extent to which price-cutting had proceeded owing to various causes, all of which have been found to exist to a smaller or greater degree in Australia. The pertinent sections of the report are presented in Appendix F.3.

486. This present Commission has been interested to note the similarity of the conditions and trends which have developed in the baking industry in other parts of the British Commonwealth. These similarities are fundamentally due to the existence and operation of the same causative factors. The comparisons are of value in that they confirm the analysis of the position jn Australia. They suggest that it is very desirable that Bread Boards charged with the supervision of the industry should keep in touch with the bread situation overseas in order to take advantage of any new developments which may occur from time to time.

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SUMMARY AND FINDINGS. COSTS.

487. The Co1nmission made a detailed survey of the financial position of many bakers. Questionnaires were sent to 3,602 bakers. Replies were received in 2,658 cases, but many had to be discarded owing to the incomplete nature of the accounts kept, or to the complications due to the production of a high proportion of cakes and pastry. (Paragraphs 121, 122.)

488. Satisfactory castings we re possible in 235 metropolitan cases, and 110 country

businesses. These were subdivided according to the degree of mechanization and the average amount of flour used. (Paragraph 123.) 489. These !lumbers are sufficiently large to give a good cross-section of the industry. They represent between 34 and 44 per cent. of the bread produced in the metropolitan areas. In country districts the percentage is unavoidably lower owing to the very frequent complicatiou with side-lines and the lack of satisfactory records. (Paragraph 123.)

490. The yield of saleable loaves to be expected from one ton of flour according to the type of wheat and the skill and care of the ·baker. (Paragraph 169.) 491. In New South. Wales, Victoria, South Australia and Western Australia, 1,330 2-lb. loaves should be obtained by a reasonably skilled operative, while in Queensland, 1,345 is to be expected owing to a higher quality of flour and, in Tasmania, where the legal r equirement in respect to weight is different, 1,350 is a reasonable figure. (Paragraphs 135 , 184).

492. Bakers frequently buy forward when they consider the price of flour is low. (Paragraph 193.) ·

493. A survey of the actual net prices paid by bakers for their flour during 1932-33 and a comparison of these prices with the average of day-to-day prices and with the highest and lowest prices of the year revealed large differences. (Paragraph 194.) 494. In Melbourne where the range was widest and where the average price was £8 Os. 3d. per ton, one baker paid as low as £6 5s. 2d., and another as high as £9 9s. per ton. (Paragraph

194.) 495. Some of these variations are due to discounts and rebates, others are due to very satisfactory purchases of flour at times when the "declared" pric·e was low, while others again are due to the purch::tse of flour at prices lower than the " declared " price. (Paragraph 194.)

496. An alteration of 27s. 6d. per ton in the price of flour represents one farthing in the cost of a 2-lb. loaf. (Paragraph 199.) ·

497. For the purpose of comparison a uniform net price of flour at £11 per ton was adopted for costing purposes. On the basis of an expected yield of 1,330 2-lb. saleable loaves to the ton, this represents 1. 98d. in the cost of the loaf. (Paragraph 198.) 498. In the cost analysis no allowance has been made for a return on the proprietor's

own capital used in the business, but due allowance has been made for this item under the heading of" margin for profit." (Paragraph 215.)

The survey of costs in metropolitan areas and in Tasmania shows that-499. The average total cost of the loaf in the investigated bakeries, taking flour at £11 per ton, varies considerably. It is 3. 961d. in Tasmania ; 4. 026d. in Adelaide ; 4. 281d. in Melbourne ; 4. 54ld. in Brisbane, and 4. 562d. in Sydney. (Paragraphs 203, 204.)

500. An analysis of these costs under sub-heads of production, distribution, administration and " Other Costs " shows that the costs of distribution are in most cases greater than costs of production (excluding flour); (Paragraph 204.) 501. When all wage items are segregated from the production, distribution and

administration sections of the average bakers' costs, they are found to total between l. 248d. and 1. 667d. per loaf. (Paragraph 207.) 502. The average costs per loaf attributable to the horses and carts and/ or motors vary from . 188d. to . 344d. (Paragraph 211.) ·

503. The variation between the total costs of individual bakers has been set out, and the average costs for bakeries when grouped according to sizes and degree of have also been studied. (Paragraphs 218 to 223.) 504. In general, production costs decrease and administration costs increase as t he size

of the bakery increases, while distribution costs are variable. (Paragraph 224.) · 505. The survey of costs in country districts in the mainland S tates was nwre difficult, both because of the complications of " sidelines " and because accou.nt s satisfact or · for costing purposes are less frequently kept. (Paragraphs 230 t o 233.)

506. It shows that there is a wider range of tot al co t s a1n ong t l1e country bakeries than among the metropolitan. This is particularly true of the dii:tribut ion section. (Paragraphs 236-237.)

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CAPITALIZATION.

507. A survey of the capitalization of the industry as disclose d in the balance sheets of ?akeries was :nade, but an ass.essinent of t he present-day value of the assets was not attempted for reasons g1ven. (Paragraphs 240 and 243.) 508. In 1naking this survey capital invested outside the business was excluded and the

" Goodwill" itern has been separated in the calculations. In deterrnining a reasonable selling price of bread, there is no justification for allowing interest on the goodwill item in a balance sheet. (Paragraphs 244 and 251.) 509. The average capit2Jization has been calculated both on a per ton of the flour used per week ("throughput") basis and also on a capitalization per ton of capacity per week. The percentage which throughput is of capacity is a 1neasure of active, as opposed to idle, capital. Approximately one-third of the capital invested in bakeries is idle. (Paragraph 246.) ·

510. The average capital invested per ton of throughput increases as the size of the bakery increases. (Paragraphs 245 and 250.) 511. On a "throughput " basis, the capitalization in groups of metropolitan and Tasmanian bakeries varies a bout an a pproxin1a te average of· £7 50 per ton. For the country

districts it is about £600 per ton. (Paragraph 257.) 512. While the capitalization on a throughput basis should be adopted in assessing the position of the industry as a whole, it is not acceptable for the purpose of arriving at a fair return on capital in any individual enterprise, because some bakers have built on too large a scale. (Paragraph 259.)

513. The total capital, exclusive of goodv.;'ill, invested in the bread industry in the Commonwealth is of the order of £6,750,000. There is no serious over-capitalization 1n the industry except goodwill and insofar as capacity exceeds throughput. (Paragraphs 263 and 266.) 514. The investigation of the sources from which capital had been derived showed that

the proprietors' and shareholders' capital represented 69 per cent. ; the remaining 31 per cent. being derived fron1 flolu·-millers', "overdrafts", and other creditors. 515. If 6 per cent. interest is allowed on a throughput capitalization of £750 per ton, this would represent an average of about 0 .l6d. per loaf.

516. A reorganization of the industry in t he interests of the community would require the expenditure of considerable capital to raise the standard of bakeries and in rrwny cases capital would also have to \Vritten off. (Paragraph 267.)

RETURNS AND PHOF.IT :MARGINS.

517. An investigation of the actual prices received by bakers for bread was made (paragraphs 270, 271.) In most cities between half and two-thirds of the bread is sold at one price or within a narrow range of prices. _(Paragraph 272.) ·

518. In Adelaide and Sydney at the time of the inquiry severe con1petition had lowered the general average of prices. (Paragraph 273.) 519. Some of the low price sales are due to price-cut ting in t he retail trade, but a great deal of it is norn1al contract production. (Paragraph 275.)

520. It may suit the special circu:mstances of a baker to accept a lower figure for part . of his output, particularly if he can increase his output without extra cost except for raw materials. (Paragraph 276 (a).) . .

521. SavinO's in delivery costs can be made when a number of loaves Is taken at one time, and contracts for 0 large suppli.es on a firr11 b[tsis with specified times of delivery are particularly valuable provided the whole work of the bakehouse can be arranged to deal with them effectively.

(Paragraphs 276 (b) and (c).) . , , . . . . .

522. When the "profit margins of the baKen es were studied the

showed that, assuming t he bakers had bought their flouT at t he average pnce of the precedrng quarter over half of the bakers investigated in Sydney and Adelaide were making losses of more than !d. per loaf. (Paragraph 28_7.) . " . ,

523. On the same assmnptwn the percentages of bakers h:;rv-Ing profit marg1ns of more than 0 .15d. per loaf were-in Sydney, 18 cent. ; Iv1elbourne, 53 per cent. ; Perth, 33 per cent. ; in Brisbane, 31 per cent. and In Tasrnanm, 23 per cent. In Adelmde, no

investigated bakery had a profit margin of over 0.15d. per loaf. (Paragraph 287.) 524. If it be assumed that the bakers were us1ng flour purchased at 16s. 6d. per ton ( = 0 .I5d. per loaf) less than the 2uvera·ge declared price of the J?Teceding three months, percentages of the bakerR with profit margins of 0 .l5d. per loaf w_ould In

Sydney, 24 per cent ; in l\1elbourne, 6? per cent: ; 111 Adela1de, 14 .per cent. ; In P ertn, 46 per cent. ; in Brisbane, 48 per cent. ; and 1 11 Tasmama, cent. _( Paragraph 288.) . ,

525. This survey is only in the nat ure of a birdseye VIew over a short penod when intense price competition prevailed in certain areas. (Paragraph 288.)

157

526. During the depression "profit margins" have frequently been low or non-existent, but it is not to be assumed that this condition has been either general or continuous. (Paragraph 289.) .

527. For instance, in Sydney in the first half of 1934, the profit margin position was unsatisfactory. During the second half of the year it improved. At the beginning of 1935 results were generally unsatisfactory owing to " price-cutting" ; by August-Septen1ber competition had become acute, but by November the industry had formed a company with the , object of establishing a code of prices and fair practice in the trade and profitable price n1.argins had been restored. (Paragraph 289.)

528. Profit margins are generally wider in extra-metropolitan areas than in the cities, but in certain districts losses were being incurred. (Paragraph 290.) 529. The examination of the profit and loss accounts of those bakeries which were n1ainly .concerned with bread production and had efficient systems of accounts showed that in about

half the businesses the period from 1931 onwards had been one of considerable difficulty or financial ret.rogression. (Paragraphs 291-2.) · ·

530. The general conclusion is that while the industry was a profitable one prior to 1929-30, the general e·conomic depression brought in a period of intense competition in the capital cities with attendant reduction of profits and in some cases definite losses. In provincial cities and towns, the position has been less acute. In country districts, the position is for the most part satisfactory from the point of view of the trade. (Paragraphs 294 to 298.)

FACTORS GOVERNING STABILITY IN THE INDUSTRY. 531. Vlhen the Commission was taking evidence, many witnesses were en1.phatic as to the difficulties of the baking trade and asked for a governmental control oi the industry. (Paragraphs 299 and 300.)

532. The cause of the difficulties was in every case the low price being obtained for bread owing to the press1ue of intense competition. (Paragraph 301.) 533. The request for enforced regulation arises out of the failure of the organised power of the industry itself and of the existing laws to eliminate unreasonable competition and to

achieve stabilization. (Paragraphs 370 to 373, 381 and 384.) 534. The quality of the bread produced in many cases has suffered under the stress of competition. It might well have been assumed that the efficient baker should have been able to hold his business by reason of the quality of the product which he offered, but the evidence is contrary to this proposition. (Paragraphs 304-5.)

535. Unemployed bakers have been prepared to open small businesses and to cut prices in order to obtain trade. (Paragraphs 306 to 309.) 536. Such men, by working long hours themselves, and by employing their families or making partnership arrange1nents, or by letting contracts for part or the whole of the operations involved in production, are able to avoid legally the necessity of observing awards and regulations.

(Paragraphs 329 to 336.) 537. This competition between the larger employer, whether a private individual or a company, constrained _ to observe the industrial laws and regulations applying to his industry, and the individual small-scale manufacturer not so constrained, presents a very real problem. {Paragraphs 74 to 99 and 312.)

538. A small baker, by working long hours for half the award rate of wages, can develop a competitive margin of about 0. 65d. ; if he is able to sell all his bread to a few shops and thus reduce delivery charges this margin may be increased to 1. 2d. (Paragraphs 99 and 315.) 539. Recent improvem(jnts in the yeast supply to bakeries and the partial mechanization ·

of the industry have made it ·easier for relatively unskilled men to enter the industry and changes have also diminished the amount of labour required. (Paragraphs 3 to 38 and 210.) 540. A survey of the available statistics shows that there has been a marked increase in the number of small bakeries and a decrease in the employment in the large ones in recent years.

(Paragraphs 39 to 49.) .

54L The industry, with a view to discouraging shop trade, has frequently fixed the pnce of b,read for sale in shops at too high a figure. This has the '> (Paragraph 313.)

· 542_ . However, there are a few bakers who, while beyond cnticism In respect to wages paid, hours worked and the conditions in their bakehouses , are able to sell bread at prices below those generally charged. The number of these is limited and the cir?umstances .under which they can operate are dependent on a high proportwn of wholesale trade With a low urut cost

of delivery and on the margin existing between prices charged to shops and house-holders by other bakers. (Paragraph 317.) .

543. While the majority of bakers object to sales at prices than the

price, the Commission does not take that extreme view, but makes certain recommendatiOns in this regard. (Paragraphs 341 to 343.) F.403.-9

168

544. The discovery by certain bread can be made_ to have an advertising

yalue,. and that .the of other 1.s assisted by the sale of bread at "cut" prices, has

the of the normal b.aker. , In some. large businesses which are not,

pnmarily, baking businesses, have exploited the advertiSing value of bread to the maximum. (Paragraphs 337 to 339.) 545. In some instances small bakers have sold bread to such shopkeepers at prices which do not admit of even reasonable observance of industrial conditions stipulated by law. (Paragraph 339.)

The practi.ce of selling bread below its cost of production as a" catch line" is, however,

an unfair trade practice. (Paragraph 344.) ·

7. is a wasteful duplication of effort in the overlapping of delivery runs which

substantially Increases the cost of bread, but which, nevertheless, provides additional employment. (Paragraphs 345 to 363.) 548. The introduction of a " block " or " zoning " system of deliveries would not be welcomed by some housewives but if the price of bread is to be Teduced some savings must be effected in delivery costs, and this must involve some restriction of the right to select a baker from among a large number. (Paragraphs 364 to 367.)

549. Flour being sold by the ton, and bread in 2 lb. loaves which contain about It lb. of flour, means that the price of flouT must change through 27s. 6d. before a resultant change of a farthing in the cost of the loaf is justified. (Paragraph 319.) 550. As a farthing per loaf is a large profit margin to t he baker, the profits or losses made by the industry must vary widely from time to time. (Paragraphs 321-322.)

551. A wide average profit margin is not in the best interests of the trade. (Paragraphs 325 to 328.) 552. A system whereby :fluctuations in the profit margin caused by variations in the price of flour or other factors could be avoided would be of value. (Paragraph 323.) .

553. The use of tokens or tickets has proved successful in s01ne places. By selling such units in tens or dozens, it is possible to subdivide the price charged for the loaf to tenths or twelfths of a penny. (Paragraph 324.) THE INDUSTRY'S REACTION'S TO COMPETITION.

554. Various expedients have been adopted by bakers to meet the conditions described above. In all States, understandings between master bakers have been reached in an endeavour to improve the conditions within the industry. In some instances, these understandings have been observed; in others, they have broken down. Representations to the individuals responsible,

with a view to inducing them to maintain fair conditions of trading, have been unavailing. (Paragraphs 368, 384.) 555. Bakers' organizations have also represented to flour-n1illers that the welfare of the flour industry is largely dependent upon the solvency of the baking industry. They have sought and obtained financial support from the flour-milling industry, and have utilized the funds so provided in various ways. (Paragraphs 372 and 386.)

556. In some instances the businesses of price-cutters were acquired by purchase with the view to eliminating them from the industry. Unused premises equipped for baking were rented to ensure that such premises should not get into the hands of newcomers invading the industry. (Paragraphs 373, 388 and 389.)

557. Such expenditures, although sometimes well made from the point of view of the master baker, are disadvantageous to the consumer because they are a waste of money and keep overhead charges at uneconomic levels. (Paragraph 390.) 558. Flour-millers and yeast suppliers have sometimes refused supplies_ to certain bakeries. (Paragraph 393.)

559. A system of licensing bakehouses with the idea of preventing the opening of unnecessary ones would require careful supervision to prevent the exploitation of the public. (Paragraph 395.) HYGIENE IN TI-IE INDUSTRY.

560. Bakehouses are subject to the Health Ac.ts and Factories and Shops Acts and are therefore already liable to control in some respects. Such control is desirable from the point of view of both the operatives and the consumers. (Paragraphs 105 and 106.) 561. The Commission inspected many bakehouses and found that in an unduly large proportion of cases buildings and plant are antiquated and unsuited to the manufactuTe of a product of reasonable quality. (Paragraph 108.)

562. The conditions of certain bakehouses and their immediate surroundi..11gs are unclean and unhygienic. The Commission is glad to be able to add that such conditions, although too frequently in evidence, do not obtain in a large section of the industry. (Paragraph 108.)

159

563. The procedure of mixing dough by hand is still frequent. It is probable that if the majority of consu1ners were to see it in operation they would demand the installation of mechanical dough mixers. The Con1mission considers that such machines should be installed wherever practicable. (Paragraph 112.)

564. The number of shops selling bread has increased markedly in recent years and in many cases the conditions under which such bread is stored are unsatisfactory. (Paragraph 115.) 565. In areas are no regulations against the return of stale bread to bakers

fron1 shops. Th1s 1s an undesirable practice. (Paragraph 117.) 566. The present system of inspection of bakehouses and shous is inadequate owing either to lack of co-ordination between departn1ents or authorities or to of staff. (Paragraph 119.)

567. Inspection of all places where bread is made or sold or of vehicles in which it is carted should be controlled by a special authority dealing \:o;ith the bread alone. (Paragraph 120.)

OTHER FACTORS AFFECTING THE INDUSTRY. 568. A survey of the relation bet ween the prices of flour and bread in each State during the period 1924-34 showed that there were marked differences in the way in which bread prices have changed in various States. (Paragraphs 398 to 404.)

569. The amount of bread consumed per capita in Australia (about 105 loaves per annum) is abo"ut the same to-day as it was in 1918-21, but there have been changes in both directions during the intervening period. (Paragraph 413.) 570. The per capita consumption reached 8. maxin1um during the period 1925-27 and fell to a minimum in 1928-30. (Paragraph 415.)

571. The quality of much of the Australian bread sunply leaves much to be desired particularly in reference to the rapidity of staling. (Paragraphs 419, 420 and 430.) · 572. This matter requires definite research as staling is not merely a matter of loss of moisture. (Paragraph 430.)

573. Some faults are due to faulty technique or equipment in the bakehouse, others are caused by a lack of standardization in the flour supply. (Paragraphs 433, 434 and 436.) 574. Baking tests demonstrated that the admixture of 15 per cent. high grade flour from "premium" wheats t o ordinary Victorian flour raised the standard of the bread considerably when the bakehouse procedure was skilfully adjusted. (Paragraph 440.)

575. Premium flour frmn vVestern Australia was as effective as Canadian in this respect. (Paragraph 441.) 576. The admixture of other constituents such as dried milk to the dough mixture improves the quality, palatability and nutritive value of the bread. If this practice became general it

would be of value to the dairying industry and to all other parties concerned and the extra cost would be largely offset by a higher yield of loaves to the t on of flour. (Paragraphs 443, 444 and 445.) 577. Vienna loaves with the typical shape, but with no other characteristic of Vienna

bread, are frequently sold. (Paragraph 44 7.) 578. An advertising campaign in favour of popularizing bread as a food would onJy be successful if the quality of the product received careful attention and the educational app0al of the campaign were considered. (Paragraph 448.)

579. There is a serious lack of educational facilities for training bakers in Australia. Many operatives have never had an opportunity of learning 1nore than the very rudiments of their trade. Until this defect is remedied any considerable and regular improvement in the quality of the bread will be almost i1npossible. (Paragraphs 455, 456 and 4 72 to 480.)

580. The results of inquiries in BTitain, Canada and New Zealand revealed that the problems of the industry in those countries were similar to those which occur in Australia. (Paragraphs 481 to 486.) ·

581. In some parts of Canada a marked feature is the acquisition of a large section of the baking trade by milling interests. The " Loss Leader " method of selling is also very prevalent and chain stores have in some cases develop ed their own system of bakeries. The price of the loaf is higher than in Australia. (Paragraphs 340, 483 to 485.)

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GENERAL CONSIDERATIONS LEADING UP TO RECOMMENDATIONS. 582. The tests which might be applied to n1easure the efficiency of an industry engao-ed in supplying such an important staple food as bread are-0

(I) that it should consist of such a number of units which when working to reasonable capacity should be able to supply the public de1nand for the product; (2) that each such unit should operate a reasonably efficient plant ; (3) that the product should be manufactured and delivered under conditions which

provide for thorough cleanliness and hygjene ; ,·

(4) that the product should be as uniform as possible and of a high quality; (5) that every person engaged in the industry should work during reasonable hours under conditions which admit of a fair output without unnecessary fatigue ;

(6) that wasteful duplication of effort (e.g. in the delivery of the product) should be reduced to such a minimum as is consistent with efficient service to the consumer ; (7) that the profits earned in relation to the capital should be properly employed

in conducting the business ; (8) that the prices charged t'o consumers should be fair and reasonable. 583. The degree of departure from this ideal 1neasures the extent of inefficiency in the conduct of the baking industry in any area. In each State of the C01nmonwealth there is such departure that the C01nmission can arrive at no other conclusion than that considerable inefficiency exists.

584. Whilst considerable inefficiency exists in the industry as a whole, some individual units are reasonably efficient and in many others the standard attained is "fair to good "if their efficiency be measured not against an ideal but against standards attainable within the restrictions imposed by existing methods of trading and competition.

585. In some periods and in some centres prices have been charged which providedgreater profits for the time being than were fair and reasonable. At other times-particularly during the depression and especially in large centres of population-prices have been ruinously unprofitable, but such prices have been charged in an effort either to acquire an additional volume of business or to hold, at all costs, an existing volume of business. The resultant instability has reacted harmfully on the industry as a whole. It has caused an undue increase in the amount

of bakehouse capacity and therefore a waste of capital. It has also led to a debasement of the standard of wages and working conditions for many workers. Further, the low quality of the article produced in many cases and the unhygienic conditions which prevail in many bakehouses are secondary results attributable in part to the same prime cause.

586. The Comrnission is not blind to the fact that the situation is probably paralleled in certain other industries. It is almost inevitably associated with a system of relatively uncontrolled competitive enterprise in industries which are open to small scale producers. 587. The public gains very little if it is undercharged for its bread during occasional periods,

because past history indicates the probability that prices will later be adjusted in order that the industry may recoup itself. 588. Every effort should be made by the Bread Industry to conduct its business in a way which will satisfy the community that the prices charged for bread from time to time bear a fair

and reasonable relation to the cost of production and delivery. Occasional neglect of this principle has been one of the main causes for the dissatisfaction which has existed in the minds of the community regarding the prices charged by bakers for bread. _

589. As pointed out elsewhere in this Heport, the baker buys his flour by the ton and sells it by the pound as bread, therefore a slight increase or in his net profit per loaf of bread is possibly unfair to ?r the consumer, the are made in accordance

with the similar modifications In the cost of productiOn and d1stnbutwn. 590. In the past there has been little evidence of a system of adjusting the relationship of prices to costs. Any such adjustments as have been have been based upon long periods, not short periods-hence the dissatisfaction of the pubhc based upon the general axion1 that want of is one of t?e reasons .for dissatisfaction or .suspicion.

speaking, the pubhc have been JUstfiwd Ill resenting the of partiCularly

when prices of flour and other costs have fallen. The CommissiOn finds that the Intelligent bakers are in agreement that a system of short-term adjustments related to costs will be in the interests of the industry. 591. The Commission is satisfied that the industry, by its own efforts, is probably unable to remedy permanently the defects of its present position, and is unlikely to be able to do so in the future without external assistance.

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592. It is a commentary upon the position ·which has been reached that, in every State, representatives speaking for large sections of an industry which should offer every facility for individual effort, have urged the Commission to recommend some form of statutory control. 593. The need for such assistance having been est.2"blished, the form \vhich the rcgubtion of the industry should take requires careful consideration. It is manifestly desirable that it should be of such a kind as to bring about the best results in a way which causes the mini1num of hardship to idl concerned. However, its main primary objective should not be to safeguard vested interests in the industry, but rather to bring about a steady improvement in efficiency until a level which the community has a right to expect has been reached and maintained.

594. At the same time, the scheme of regulation should le8Ne scope for initiative within the industry whilst protecting the consumer from exploitation. 595. Inasmuch as the ultimate results would only be achieved over a period of years, any scheme adopted should not be temporary in character, but should operB,te continuously in

the future. 596. The Commission has reviewed various courses of action which could be applied to remedy the present position. In general, these fall into three types which would respectively involve:

(i) the n1inimu1n amount of external intervention necessary to protect the community and, at the same time, to assist towards stability in the industry; (ii) a more intensive control which, in its operation, 1nust necessarily interfere substantially with the free play of competition ; (iii) the co1nplete control of the industry regarding it as an essential public utility of

sornewhat the same character as certain other industries which are supplying essential public needs, which industries are already subject to special legislative control. . 597. The Commission is of opinion that the amount of legislative intervention should be the minin1um consistent with the achievement of conditions satisfactory both to the public and to the industry. The precise amount of further intervention c2.n be determined in each State

only by a planned continuous study of the results of each carefully considered step in the programme of legislative control. 598. The Con1mission believes that the first course of action above described will be of material assistance to the community -and to the industry. Time and experience will show

whether action taken under this first proposal will be sufficiently effective to ensure the achievement of satisfactory results. 599. Further legislative intervention should be undertaken only as circumstances demand. An expert independent Board in each State, thoroughly versed in all the intricate details of the industry and of the direct and indirect effects of the conditions \vithin the industry upon the public welfare, will be in a position to determine when such further intervention is desirable.

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RECOMMENDATIONS.

600. The health of the community and the cost of bread, as one of the staple foodstuffs, must be paramount fm: these, the sta.bilization of the ?read industry is a

necessary precedent. The vomnnss1on makes the followmg recommendatiOns for submission by the Commonwealth Government to the State governments for their consideration:-GROUP A. CoNSTITUTION oF STATE BREAD BoARDS.

(I) That a Bread Board be constituted by statute in each of the States. (2) That the Board consist of three members, one of whom (the Chairman) should be appointed and remunerated on the basis of full-time service ; the other members on the basis of part-time service.

(3) That the Board be given such powers as will enable it to control and study the bread industrY: within the area of its jurisdiction in the manner set out in Hecommendations (4) to (27). NoTE.-The Board should, in the first instance, operate in the metropolitan area of the capital city concerned and, possibly, also in some of the larger provincial centres. · The Commission assumes that a State government, while providing a general power for the Board to operate throughout the State, will define in the first instance the areas within which it should function and make provision in the statute for the extension of these areas as and when circumstances may require that the Board should extend its operations.

STAN DARDS AND REGISTRATION OF BAKERIES, ETC. (4) That the Board's primary step be one of requiring the preliminary registration of all businesses of manufacturing, delivering or selling bread. (5) That the Board proceed to prescribe standards with respect to the location and construction of all premises or vehicles in which bread is made, delivered or held for sale.

NoTE.-Suggestions as to the lines on which these specifications should be drawn up are contained in Schedule " A " appended to this Report. (6) That the Board, prior to the expiration of the given period to which each provisional registration certificate shall apply, shall grant a full certificate of registration to ea ch bakery, or delivery, or retail business as complies with the prescribed standards.

(7) That t.he Board be vested with power, to t he exclusion of any other authority, to enforce the observance of proper standards of sanitation, hygiene and health in respect to premises in which bread is made or held for sale. (8) That the Board be empowered to suspend or cancel certificates of registration if it be satisfied that the holder of such certifica-te has fail ed to observe the standards prescribed by the Board, or has been convicted of serious breaches of the laws or regulations relating to the

baking industry.

WEIGHT OF THE LOAF.

(9) That the Board be vested with power, to the exclusion of any other authority, to enforce the laws relating to the weight and purity of bread, but that it be a duty of the Board to work out, in consultation with the leaders of the baking industry, a more satisfactory system of defining the weight and composition of the loaf than at present exists.

NoTE.-The present system of checking the weight of the loaf leaves much to be desired, and some other method should be introduced. This checking might be based upon the weight of the dry matter in the loaf or, alternatively, on the weight of dough used in the bakehouse in the manufacture of a specified number of individual loaves . Further research work on this subject is required.

STAFF AND FINANCE OF THE BOARD.

(10) That the Board use the services of other branches of the Government's service insofar as they can be effectively so used in the opinion of the Board, but that so far as is necessary, the Board appoint its own staff for this or other purposes. (II) That the Board collect fe es for certificates of registration whether provisional or otherwise, such fees being applied to defray the cost of administration of the Board, and also to other proper purposes as it may determine including research and propaganda in the interests

of the industry and the community. (12) That the Board keep proper books of account, which shall be open to the inspection of the Auditor-General or any person authorized by him; and also prepare an ammal statement of its revenue, expenditure and financial position for submission to Parliament.

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CONTINUOUS OBSERVATION ON CosTS, AND ON PRICES CHARGED.

(13) That the Board survey continuously the costs of the industry and the component factors of such costs and, to this end, it be vested with such complete powers as are necessary to enable it to obtain reliable evidence on this matter. (14} That the Board review systematically the relationship between the prices charged for bread and the costs of production, distribution and administration, after allowing for a fair and reasonable retu:tn upon capital.

NoTE.-The Board would thus have before it at all times all material data to enable it to make a pronou..'lcement as to the fairness or otherwise of the prices charged, or proposed to be charged, for bread. The somewhat unsatisfactory procedure of conducting investigations from time to time to settle this vexed question will be obviated by the existence of such a Board.

{15) That the Board publish an annual report of its conclusions as to the economic position of the industry of manufacturing, distributing and selling bread.

RELATION TO INDUSTRIAL TRIBUNALS.

{16} That the Board represent the consumers' interest by submitting evidence to Industrial Tribunals on any application for alterations of wages, and/ or conditions in the industry and that it be empowered to submit views and data to the Industrial Authority in regard to any proposed arrangement by consent between the employers and employees before such arrangement is registered or incorporated in an order of the Authority.

STUDY oF METHODS oF REDUCING CosTs. (17} That the Board consider all possible methods by which the costs of making, distributing and selling bread can be reduced; in particular, it should, in close consultation with the industry, make a study of the problem of zoning deliveries .

{18} That, in the event of the Board deciding that zoning is desirable in the interests of the community throughout the whole or part of its area, the Board should, after consultation with the master bakers, draw up a scheme for zoning deliveries and endeavour to implement such a system with the consent of the industry. In the absence of such consent, the Board should recommend the Government to pass the legislation giving the Board the further necessary powers.

DECI,ARATIONS AS TO FAIR PRICES.

(19) That the Board shall , at its discretion, from time to time make a declaration with reference to the prices being charged for bread. (20) That the principle adopted with reference to the survey of, and comments on, prices, be that prices should be related as far as possible to the respective costs involved, e4cept

possibly in the case of such " specialty " or " patent " breads as are more in the nature of luxury articles. NoTE.-If it be possible to introduce different prices for ordinary bread in different types of suburb without introducing too many complications, an effort should be made in this direction.

· Again, the quantity taken by an individual purchaser should be taken into consideration (e.g. if a large family in a closely-populated working-class suburb takes 25 loaves a week and a small family in a hilly subll!'b-where the delivery is much more expensive-takes only five loaves a week, the costs are considerably different and, if possible, this difference should be

translated into prices). SYSTEM OF ToKENS oR TICKETS.

(21) That the Board encourage the industry to attack the problem of stabilizing the margin of profit between costs and prices by the adoption of some system of tickets or metal tokens sold to regular customers at a price somewhat lower than the normal cash price for a single loaf; this will effectively allow smaller variations in the price of the individual loaf than are at present

practicable. NoTE.-As the industry becomes stabilized owing to the introduction of a uniform pnce for flour (consequent upon either a variable excise or a home consumption. price wheat) or owing to the raising of the standard reqmred m bakehouses, the present msecunty

of profits will be diminished or removed.. This to the indust:y ?e passed on to

the consumers who, as units of the public, have proVIded the orgamzat10!1 which has ensured the better position of the industry. Thus if 0. 2d. per loaf of bread 1s to-day regarded as a reasonable profit basis after allowing wages for all parties concerned and all other interest on owners' capital, then this might be reduced somewhat as the general econoilllc pos1t10n

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of the industry improves. However, the adjustment from time to time of prices to a fair and reasonable basis would still present difficulties if the variations in the price of a single loaf were limited to a minimum of !d. Two systems by which adjustments can be made are as follow:-(a) the sale of tickets or metal loaf tokens in dozens or half-dozens. This allows

the price of the dozen to be varied by ld., which effectively permits of variations in the price of the individual loaf of fractions as small as one-t welfth of ld. ; (b) tokens representing a fraction of ld., such as id., can be used in the following

way:-If the agreed reasonable price of bread was 5kd. on a daily cash basis, a customer could pay 5td. for the first loaf purchased in the week and receive a loaf of bread and three tokens of id. each ; on the three subsequent days, he could pay 5d. plus one of the tokens for each loaf purchased.

The adoption of either principle would assist the industry by reducing the amount of credit by stabilizing the profit margin and therefore hampering the price-cutter and by diminishing the margin between " shop " and " delivered " prices.

LIMITATION OF TYPE OF SHOPS SELLING BREAD.

(22) That the Board be empowered to limit the sale of bread over the counter to certain types of shops having due regard to the convenience of the communit y.

WRAPPING PROBLEM.

(23) That the Board investigate the economics of the wrapping of bread and should encourage master bakers to offer the public the choice of buying bread wrapped or unwrapped. NoTE.-The publication of the results of investigations of the advantages and costs of wrapping will probably stimulate the demand for ·wrapped bread in certain areas. Certain purchasers would probably buy \VTapped bread when they are satisfied that the extra charge is fair and reasonable. The introduction of fractions or subdivisions of ld. in the price charged

would facilitate the price adjustment necessary in the provision of an innovation such as wrapped bread. INFORMATION FROM OUTSIDE SOURCES.

(24) That the Board collect and collate information in respect of the changes in the practice of the craft of bread-making in other States and countries and should use its influence to raise the quality and nature of the ingredients used by and the products of the industry.

IMPROVEMENT IN EDUCATION WITHIN THE INDUSTRY.

(25) That the Board assist the movement aiming at the improvement of the level of scientific and technical education throughout the industry.

PossiBILITY oF GENERAL UsE OF DRIED MILK, ETC., IN DouGH MIXTURE. (26) That the Board, in consultation with appropriate State authorities (e.g. the State Medical and Chemical experts) and with the mast er bakers of the State, consider the question of increasing the nutritive properties and palatability of bread by encouraging and/or enforcing the use of a certain amount of mi lk products in all bread made for public consumption.

NoTE.-In general, Australian flour is somewhat low in protein content ; at the same time, a large quantity of skimmed milk and other dairy by-products at present avaHable in the Commonwealth could be put to much more useful purpose than at present. The extension of the present occasional practice of adding one or other of these dairy products to the dough mixture would be an advantage to all parties concerned.

ExTENSION OF PowERS.

(27) That the Board, whenever it considers that an extension of its powers is essential, prepare and submit 'to Parliament through the appropriate Minister, a special report setting out the reasons for and the nature of the additional powers which it recommends.

GROUP B.

601. The Commission has been very concerned at the low level of quality reached by much of the bread made in Australia, particularly in respect to the rapidity with which it becomes stale. It considers that this is partly a matter for research and partly a matter dependent on the education of bakehouse workers.

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602. Recommendations concerning research will be found m the Fifth Report of the Commission. 603. Those concerning education are as follow:-(28) That schools of baking be established in conjunction with the chief technical colleges in all the capital cities of the Commonwealth.

NoTE.-The experience already gained at the Baking School at the East Sydney Technical College should be used when determining the details of the scheme. (29) That, in relation to (28) the Federated Master Bakers' Association, through its constituent associations in the various States, should obtain the agreement of respective State governments for the attendance at a conference in Sydney of the respective Directors of Technical Education and of such representatives of the science faculties of the respective Universities as may be appropriate. At this conference, after inspection of the work of the Baking School at the East Sydney Technical College, recommendations be made with regard to all matters appertaining to the sound establishment of the schools of bakery in each capital city.

(30) That the Federated Master Bakers' Association of Australia, in consultation with the respective Master Bakers' Associations of each should thereafter submit considered recommendations to the respective State governments and attach to the recommendations the offers which the respective Master Bakers' Associations are prepared to make with reference to financial and other contributions towards the establishment and operation of the respective schools of baking. ·

(31) That the conference be requested to consider and draw up the details of a scheme for the institution of a system whereby a special diploma in baking and allied trades be issued under the seal of the Federated Master Bakers' Association of Australia. This diploma should be of a standard similar to that of a University science degree, but should include in its curriculum

instruction in the art and business of the baking and allied trades in addition to a training in the appropriate fundamental sciences. The diploma should be parallel in standard to that granted by the National Association of Master Bakers, Confectioners and Caterers of Great Britain.

(32) That arrangements be made between the Federated Master Bakers' Association of Australia, and the Master Bakers' Associations of the respective States on the one hand and the educational authorities of the respective States on the other for the issue, after examination, of one or more types of certificate to operative bakers and that the examinations upon which the issue of these certificates are based shall be similar in all the States.

(33) That, in due course, and having regard to the protection of the operative bakers novy working or available for work in Australia, all of whom should be registered as at a certain date, legislation be passed to make the holding of an operative baker's diploma or certificate a necessary precedent to employment as an operative baker.

. 604. The Commission records its deep appreciation of the full and willing assistance rendered by expert technical advisers and by others associated with the bread-baking industry. Amongst those whogratuitously gave much assistance were:- _ Mr. 'Vm. White, President, Federated Master Bakers' Association of Australia and

New Zealand. Mr. A. F . Kirkland, President, Master Bakers' Association of New South Wales. Mr. J. Israel, Secretary, Master Bakers' Association of New South Wales. Mr. J. N. Hennessy, Past President, Master Bakers' Association of Victoria.

Mr. J. Doyle, President, Master Bakers' Association of Victoria. Mr. L. P. Elsum, until recently Secretary, lYiaster Bakers' Association of Victoria. Mr C. H. T. Jeffrey, Secretary, Provincial Master Bakers' Council of Victoria.

Mr. W. R. Jewell, M.Sc., F.I.C., Agricultural Research Chemist to the Victorian Government. Mr. S. R. Cowley, Director of Messrs. Nycander & Co., Melbourne. Mr. W. A. L. Thomas, President, Master Bakers' Association of South Australia. Mr. G. L. Ball, Secretary, Master Bakers' Association of South Australia. Mr. E. W. Heindorff, Secretary, Master Bakers' Association of Queensland. Mr. T. A. Burns, President, Master Bakers' Association of Western Australia.

Mr. E. W. Edmonds, Secretary, Master Bakers' Association of Western Australia. Mr. H. T. Inches, Secretary, Master Bakers' Association, Hobart. Mr. C. J. Shields, Secretary, Master Bakers' Association, Launceston. Messrs. Stockdale Bros., Master Bakers, of South Yarra, Victoria. Mr. T. Hatton of Messrs. "Baker Perkins Pty. Ltd., Melbourne. The President; and Secretaries of the Bread Operatives and Bread Carters' Unions

of the various States. The Commonwealth and State Actuaries and Statisticians and their staffs. The Secretaries, Under-Secretaries, and senior staff officers of Commonwealth and State Departments.

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It is impossible to mention all who have helped, and the Commission desires to extend its thanks to all those who responded so willingly to its requests for special informaton.

We have the honour to be, Sir, Your Excellency's l\iost Obedient Servants,

H. ,V. GEPP (Chairman). T. S. CHEADLE. C. W. HARPER. E. P. M. SHEEDY. S. M. WADHAM.

SCHEDULE "A" SPECIFICATIONS OF BAKERY PREMISES.

j_ Although the layout and design of the bakehouse from the point of view of convenience

of manufacture may be the concern of the baker, the State Boards will also be intimately concerned with such matters from the point of view of the hygienic condition and quality of the product. As their experience progresses, the Boards \Vill be able, if necessary, to modify their regulations in accordance with special local circumstances.

ii. The following factors should guide them in framing their initial standards :-. ( 1) The walls and floors of all premises must be so designed as to preclude the possibility . of any type of insects or rats or mice obtaining access to the bread or to any of its constituents. (2) The surfaces of walls and floors must be free from surface irregularities and of such a nature that they can be easily washed and cleaned; they must not permit of the accumulation ··of . dust, cobwebs or other dirt. Similarly, the presence of ledges, rafters and other spots on

which dust can collect must be avoided. The nature of the roofs and ceilings should conform to the· same broad principles. {3) A flour store must be provided and must be placed so as to avoid deterioration of the flour by heat or excessive moisture.

(4) Where spontaneous yeast is used, a separate yeast room must be proVided in which ventilation is adequate and general cleanliness can be achieved. {5) A separate dough-mixing room should be provided, and, where practicable, a further "fermentation" room in which the dough is conditioned should also be set apart; this fermentation room should, preferably, be so equipped that the temperature and humidity of the air within it can be controlled.

(6) A mechanical plant equipped with a flour sifter, and troughs made

from (or satisfactorily lined with) a suitable metal, should be regarde4 as essential. All vessels used in the bakehouse must be definitely allocated to the bakehouse and not. used for purposes other than those of the bakehouse. (7) The ventilation of all premises, especially the bakehouse, should be in accordance with modern principles so that the conditions unde1· which the employees work are as satisfactory as they can reasonably be made. Air flues must be provided to carry away smoke and fumes from the oven.

(8) Employees must wear special clothing; efficient changing rooms with lockers and washing (or preferably bathing) accommodation must be provided. (9) Bread storage rooms must be ·provided and their equipment must include metal racks of a type which is easily cleaned. ·

( 10) The carts and baskets and cabinets in which bread is stored during its transit from the bakehouse, or the room in which it is stored, to the must be insect and vermin proof, and must be easily cleaned. The carts and cabinets should be adequately ventilated. ( 11) The bakehouse and the point where bread is loaded into carts must be beyond a :grescribed distance from stables or any place or receptacle where flies can readily breed.

iii. Naturally, no schedule o£ regulations will be effective unless the spirit guiding the master baker is such as to aim at the maintenance of a high standard of cleanliness and the regulations should take this into account. For instance, the Board's regulations should be so framed that, if a large number of in a_ bakehouse o1:1 the occasion of an _inspection, a case for

delicensing or prosecutwn should he. The fact that flies can, and do, obtain access to the bread is of more significance than the fact that the windows and doors are, or are not, fly-wired.

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APPENDIX A.

REGULATION OF LABOUR CONDITIONS OF BAKERS AND BREAD-CARTERS IN NEW SOUTH WALES, UNDER INDUSTRIAL ARBITRATION LAWS. By C. J. B ellemare, Under-Secretary, Department of Labo ur and Indttstry, New SJuth Wales Since the introduction of the system of industrial arbitration in New South ·wales in 1901, by the Industrial Conciliation and Arbitration Act of that year, the industrial conditions of the bread industry have been dealt with in two branches, viz. : baking and breadoarting. Each of these branches is served by separate industrial unions and the labour conditions of each branch have been continuously regulated by separate awards, with the exception of the South Coast District (for a few years) and' Broken Hill.

BREADCAR'I'ERS.

The breadcarting branch of the industry was the first to receive an award. On the 5th September, 190?, the Court of Arbitration made an award, and made its conditions a common rule* for the industry in a defined district which included the metropolitan distrid of Sydney and environs, extending from Manly to Hornsby, thence to Emu Plains, thence to Sutherland and Botany Bay. In May, 1904, the award was continued in operation till further order of the Court. An award for the Newcastle district (County of Northumbet'land) was made in September, 1909; for the South Coast District in October, 1911 ; and for country districts excluding the Counties of Cumberland, Northumberland and Yancowinna (Broken Hill) and the area covered by the South Coast Award in July, 1913. This geographical distribution of areas, having separate awards, persists at the present time, there being separate awards for the Counties of Cumberland, Northumberland, Yancowinna, South Coast District, and New South Wales generally, other than the areas mentioned. The County of Yancowinna, which includes the town of Broken Hill, was covered by a combined award for bakers, breadcarters and pastrycooks. .

Tables are attached giving the wages, hours, starting and finishing times, &c. , fi xed by the various awards from their respective commencements to the present time for the four areas first-mentioned.

BAKERS.

An industrial agreement, dated 25th August, 1903, between the Sydney and Suburban Master Bakers'. Association and the New South Wales Operative Bakers' Association, was made an award and a common rule on 18th September, 1903, at the request of both organizations. This award was for the metropolitan area and environs, being a similar area to that covered by the Breadcarters award. Its period w9,s fixed for two years. The next and last

award made by the Arbitration Court was dated the 30th March, 1908, for the same area as the first award; The question of machine and hand baking came up in connexion with this award, the Court deciding to classify the workers as skilled operatives, machine hands and apprentices, lower wages being awarded to the mach ine hands. The 1901 Act expired by effiuxion of time in 1908, and the I ndustrial Disputes Act, 1908, took its place. Boards were the tribunals established to regulate industrial conditions and two were constituted for the baking trade in the County

of Cumberland, one for hand baking and the other for machine baking. This dual method existed until the Industrial Arbitration Act, 1912, came into force, when both hand and machine bakers were catered for by one Board. An award of the board in July, 1916, practically abolished the distinction between machine and hand shops, but on appeal to the Court, the system previously in force was restored. The distinction between employees engaged in machine and

hand shops did not remain very longj and generally awards up to October, 1933, did not permit employment of unskilled workers in the industry. As a result of an appeal to the Industrial Commission, in September, 1933, a provision was made for the employment of assistants in machine shops, i. e., shops which have in regularuse at least the following machines :-a dough mixer, a divider and a moulder. Every machine shop is allowed one assistant ; where four to seven operative bakers are employed as constant hands in any one bakehouse, not more than two

assistants ; where eight to twelve, not more than four assistants ; wh ere over twelve, five assistants shall be allowed. Automatic bread-baking establishments were not separately provided for in awards until September; 1930, when the Industrial Commission inserted in the award a scale of wages for foremen, doughmakers and adult and junior helpers. Their wages and variations are shown in the statement attached.

Boards were also constituted for the Newcastle area (first award made 6th July, 1910) ; South Co ast area (first award made 4th October, 1911); New South Wales country area (first award made 2nd July, 191 3). With the exception of the South Coast having been included in the New South Wales Country Award, the geographical arrangement mentioned above is still in existence. -

As stated in the note relating to breadcarters, the Broken Hill area bakers, breadoarters and pastrycooks were included in the one award. Weekly Hours of B akers (County of Cumberland). Under the first award for bakers, .tnade in September, 1903, nine hours, day or night, constituted a day's work of which one hour was allowed to each employee for meals and dressing. This provision was repeated in the award of March, 1908, overtime being chargeable after 48 hours per week were worked. In March, 1911, the hours of labour ih each week were fixed at not exceeding 48, except where Friday is a treble day or night in the week, when the

ordinary hours of labour for the week were not to exceed 49!- hours. In the case of hand bakers, the next week's hours were not to exceed 42! hours. The award of 3td April, 1912, fixed 48 hours wit h the addition o.f l hour (each day or night) for meals. .. .

By the award o£ 5th May, 1916; the hours of labour were fixed at seven and a h_alf on ordmary days, and ten and a hal£ on double days; in establishments where there were were no double days, eight hours per day. On the 7th July, 1916, the hours fixed were-48 in an ordinary week. ·

44 in a week with one holiday. 38 in a week with a treble not on Friday. 49! in. a week when Friday is a treble day. 41 in a week following a Friday treble day. . . .

Hours were reduced to 46 per week by the award of the Court of Industnal ArbitratiOn, dated 9th J anuary, 1920, to be worked as 46 hours in an ordinary week. 43 hours in a week with one carter's holiday .

.... the r esult of prohibition proceedings t he Court 's power to declare common t ules W(l!l co nsid er bly reatrlct ed a nd heir enforcement was rendered

practically impossible.

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48 hours in a week with Friday as a treble day. 37! hours in a week with treble day not on :Friday. 39 hours in a week following treble Friday. 45 hours in a week where both a double and treble day occur. The Fortyjour Hours ·week Act, 1925, commenced by proclamation on 4th January, 1926. This Act provided for a 44 hours week, and existing awards and agreements were deemed to incorporate such provisions. On 9th April,

1926, hours were reduced to 44 for ordinary weeks, with provision for weeks in which holidays fell. This Act was repealed in June, 1930, by the Industrial Arbitration (Eight Hours) Amendment 4ct, 1930, and 48 hours per week reverted to. However, in December of the same year, the 44 hour week was restored. A further amendment of the law was made by the Industrial Arbitration (Amendment) Act, 1932, the Industrial Commission being charged with the duty of determining the standard working week. This duty was performed by the Commission which has intimated its intention of declaring a standard working week of 44 hours.

The existing award contains the following clause relating to hours :-" 4. Hours of Labour :

(i) Weekly.-The ordinary hours of labour shall be as follows:­ (a1 In an ordinary week, 44 hours. (b) In a week in which the breadcarters' holiday falls, 42 hours. (c) In a week when a public holiday falls, 42 hours. (d) When two holidays occur in one week, 36 hours. (e) In a week with a treble day, not a Saturday, 38 hours. (ii) Daily.-The ordinary hours of each day shall as follows :­

(a) Single days, except Friday, eight hours. (b) Fridays, six hours (provided always that when in any week Friday follows a holiday under this award, eight hours shall be the ordinary hours of labour on such Friday. (c) Double day, ten hours. (d) Treble day, ten hours.

Starting Times of Bakers (County of Cumberland).

The common rule, dated September, 1903, of the Court of Industrial Arbitration, based on the industrial agreement between the employers' and employees' unions, provided for a nine hours day to be worked day ornight. One hour of the nine hours was allowed as meal time. The starting time was fixed at 9 p.m. on all nights except double nights, and 8 p.m. on double nights. The awards made in March, 1908, and July, 1909, provided that on ordinary nights the starting time should not be earlier .than 8 p.m., and on double nights not earlier than 6 p.m.

In March, 1911, the awards of the ·hand and machine bakers' Boards stated that the hours may be worked by day or night at the option of the employer. If worked at day, the hours were to cease at 11.30 p.m. ; if by night to commence before 8 p.m. In April, 1912, the award on this matter provided that work should not start before 8 p.m. on single nights or before 6 p.m. on Fridays, or before 4 p.m. on treble nights. The starting time had to be registered with the Industrial

Registrar. This provision continued in force until the 3rd June, 1914, when the award set out that work should not start before 12 noon on ordinary days and before 10 a.m. on doubles and trebles, and should not start after 12 noon on any days.

A change was again effected by the award of the 28th April, 1915. Under this award, the starting hour was fixed at not before 10 am. on ordinary days, 8 a.m. on ,doubles and trebles, and not after 10 g.m. on any day. In May, 1916, the starting time was changed to 8 a.m. on ordinary days and 6 a.m. on double days, the finishing time being fixed at 6 p.m.

A strike of bakers took place in 1919 against the alleged intention of the employers to introduce night baking. The Judge of the Industrial Court about the same time stated that he was unwilling to make an award excluding night baking. The employees ultimately returned to work on antecedent conditions. The government, with the consent of the employers and employees, passed an amendment of the Bread Act in 1919. This amendment prohibited the making or baking of bread between the hours of eight o'clock in the evening and six o'clock in the morning on any week day or at any time on any Sunday.

In the next award on the 9th January 1920, the starting time on ordinary week days was fixed at not before 6:30a.m. or later than 8 a.m. ; on Sundays, 9 a.m. ; on double and treble days, 6.30 a.m. Doughmakers were allowed to start to suit the shop. .

A further amendment of the law was brought in by the Bread Amendment Act, 1923 (assented to 26th November, 1923) and the restrictions against making and baking of bread at night were abolished. Subsequently, on the 23rd December, 1923, the award permitted a midnight start. Increased wages amounting to about £1 per week were awarded to those starting at midnight. A strike then took place, the employees refusing night work. It lasted from the 12th January to 1st March, 1924, and the men were unsuccessful. They resumed work on the conditions. The union was deregistered and· fined £50. The awards, however, were not rescinded.

A few months later, the union, through its representatives, informed the Court that it had decided for methods of arbitration, and the members had been working under the·terms of the award. The Court re-registered the union. The position remained unchanged until the passing of the Day Act, 1926? which the making

or baking of bread for sale between 6 p.m. and 5.30 a.m., or at any t1me on Sunday m the counties of Cumberland and Northumberland, except where the day upon which the bread is to be delivered is what is customarily known in the industry as a double delivery or a treble delivery day. The Act also regubted the time of delivery of bread. Deliveries were prohibited in the counties of Cumberland and Northumberland between 6 p.m. and 6 a.m. the following day, and between 6 p.m. and 5 a.m. the following day in other parts the State. Exception to the prohibition was

made in case of double and treble days, and for purposes of savmg dough. Doughmakers were excluded, by definition, from the operations of the Act. This Act is still in force. In the award made after the passing of the Day Baking Act, 1926, on the 9th Aprn, 1926, midnight start was permitted on double and treble days and 5.30 a.m. start on other days.

The award at present in force provided that doughmakers shall start to suit the shop, and other employees on an ordinary day, not before 5.30 a.in. ; on a double or treble day, at midnight.

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Apprentices and Restriction of Employment to CeTtain Classes. Provisions regulating apprenticeship have been contained in all bakers' awardsforthe industry . These provisions cover age of entry, period of apprenticeship, operation t o be taught apprentices, proportion of apprent ices to journeymen employed, and wages. _ ·

Ag? of Entry.-The first award in 1903 fi xed seventeen yeR-rs , above which apprentices could not be indentured. This provision has been maint ained since then, but an addition has been made in the last that any youth under twenty-one years of age who proves t o t he satisfaction of the Apprenticeship 'Council that he ha,s been employed in the manufacture of bread may be engaged a nd bound as an apprentice for a period of four ye:us, less the time he has been so employed.

Period of Apprenticeship.-Four years was t he period of apprenticeship fi xed in 1903, and that period has not been altered in subseguent awards. _ Proportion.-At fir st, the proportion allowed was one apprentice t o each shop; two apprentices for every five constant operat ive bakers; and three for eight consta.nt operative bakers.

I n 1908, the proportion allowed was one apprentice t o each shop ; two apprentices to four, and three for eight constant skilled operatives. Under the aw ard for machine bakers in 1912, one apprentice was allowed for every operative baker, Class B, employed. In hand baking the proportion allowed was one apprentice for each shop ; two apprentires to four t o

seven operative bakers employed ; three where eight to twelve ; fo ur to thirteen to eightee1i; five to nineteen to twenty-five; six to twenty·six to thirty-three ; and so on in like proportion. The proportion allowed in the award of J uly, 1916, was one apprentice to each sh op ; two apprentices where four to seven operative bakers were employed ; and t hree where eight to twelve operative bakers were employed;

and four where more than t welve operatives were employed. No shop was allowed to have more than four apprentices. This award also stated that no persons other than operative bakers and apprent ices were to-be employed in t he manufacture of bread. The proportion permitted by t he existing award is as follo ws :- Every shop, one apprentice; where 'four t o

seven operatives are employed as const ant hands in any one bake-house, not more than two apprentices; where eight t o t welve, not more t han three; where over twelve, four apprentices. No shop shall be allowed more than four apprentices. The apprenticeship clauses of the aw ard of June, 1933, were not applied to automatic bread-baking

e_ st ablishments, and provision was made for a junior class of worker called " Helpers " . Wages of AppTentiaes.-vVage s of operative bakers in the first award were fi xed at £2 12s. 6d . per week. Apprentices wages fixed by t he same award were :-

First six months Second six months Third six months Fourth six months Third year Seventh six months

Last six mon ths

The following t able shows the scale fixed by awards at the date stated :-28th 28th

Date 18th 30th 3rd 7th 9th Dece mber, D ecember , 1st

Six September, March , April, July, J anuar y, 1923. 1923. July ,

Months. 1903. 1908 . 1912. 1916. 1920. --·---·- 1927.

D ay . Night.

.. I 8. d. £ 8. d. £ 8. d. £ 8. d. £

s. d . £ 8 . d. I £ ' · d. £ 8 . d.

1st 5 0 0 5 0 0 10 0 0 12 6 0 15 0 0 15 10 I 0 19 0 1 0 3

2nd 010 0 0 7 6 0 12 6 0 15 0 1 0 0 I 1 I 4 I 5 6 I 7 9

3rd 0 15 0 0 10 0 0 I 5 0 0 17 6 I 5 0 I 6 8 1 I2 0 I 14 3

4th I 0 0 0 12 6 0 17 6 1 0 0 1 IO 0 I ll 9 I I8 0 2 I 0

5th 1 5 0 0 15 0 1 .2 6 1 5 0 I 12 6 1 14 6 2 1 4 2 4 6

6th 1 5 0 0 17 6 1 5 0 1 7 6 1 15 0 1 17 2 2 4 6 2 8 6

7th I 10 0 1 2 6 1 10 0 1 12 6 2 0 0 2 2 8 2 II 2 2 15 6

8t h 1 I 5 0 1 5 0 1 15 0 I 17 6 2

5 0 2 7 9 2 17

3 1

3 I 9

9t h

P er week. £ s. d.

0 5 0

0 10 0

0 15 0

1 0 0

1 5 0

1 10 0

1 15 0

23rd

Septem ber , J une,

1932. 1933.

£ 8 . d. £ 8 . d.

0 16 11 0 16 7

1 2 10 I 2 4

1 8

7 I 8 0

1 14 2 I 13 5

1 17 1 I 16 3

2 0 5 1 I 9 3

2 6 3 2 5 3

211 6 2 10 5

23rd 14th

Novemb er, June,

1934. 1935.

£ s. d: £ 8, d.

0 16 4 0 16 7

1 2 I 1 2 4

1 7 7 1 8 (}

1 12 11 1 13 _ 5

1 15 9 1 16 3

1 I8 9 I 19 3

2 4 7 ,2 5 3

2 9 10 2 10 5

Assistants.-A class known as assistants, being youths employed to do any work in a bakery except the· work of an operative baker , was provided for in the award of 7th July, 1916. A sc ale of wages up to 21 years was set out, but no proportion was fi xed. 'J.'h e award of 9th January, 1920, defined this class as an employee engaged by the week not being

an apprentice or operative baker, wh? was previously to. feed dough and dough from machines,

to put dough into boxes and otherwise handle dough m Its transit fro m machme to machme, except the work of a baker. By a provision of an award of 18th J anuary, 1929, every machine shop_ was allowed one where fo ur operative bakers were . employed as const ant hands, not more than two assistants were permitted. No shop was

allowed to have more than two assistants. The proportion of was changed again June, 1933, to one to shop ; t wo for four to seven

operative bakers ; four for eight to twelve ; and five assist ants for over operative bakers. .

A clause in this award stated that no minor was to be employed m a bakehouse, except apprenttres or assistant s. An assistant in the award of October, 1933, was defined as. an employed by the week in a shop doing work not covered by any other The pro_ port10n remamed unchanged ; b?-t the proh1b1ted the employment of minors in connexion with the manufacturmg of bread other than apprentices or mmora wh o had completed apprenticeship or assistants.

170

- - Awards up to 1929 contained a scale of for assistants aged eighteen, nineteen, twenty and twenty-one years and over. From January, 1929, only a Immmum wage was prescribed. The foJlowing minimum wage rates were fixed at the dates stated :-Per week.

£ s. d.

18th January, 1929. . 4 5 0

9th September, 1932 3 10 0

23rd June, 1933 3 14 6

23rd November, 1934 3 13 6

14th June, 1935 3 14 6

Bakers' were no.t for in the awards of 1903 and 1908. By the award of 29th

March, 1911, the days Immediately precedmg Chnstmas Day, New Year's Day, Easter Monday, King's Birthday, Eight-hour Day and Union Picnic Day were to be recognized as holidays. On the 3rd April, 1912, Anniversary Day was added. On the 28th April, 1915, King's Birthday was omitted.

On the 7th July, 1916, Christmas Day and Eight-hour Day and the day or night immediately preceding Christmas Day, Anniversary Day, Easter Monday, and all breadcarters' holidays were to be holidays. On 9th January, 1920, Anniversary Day was added. On 18th January, 1929, New Year's Day, Anniversary Day, Easter Monday, Good Friday, King's Birthday, Anzac Day, Eight-hour Day, Boxing Day (except when it falls on a Saturday) and all breadcarters' monthly holidays were fixed as holidays. for all operative bakers, apprentices and assistants.

Vacation.-In the award, gazetted 19th November, 1920, appears a clause giving every employee (with exceptions mentioned) leave of absence for a period of one week for each calendar year of service, or one day's leave of absence for every two months of service. An award of 23rd December, 1923, prescribed that if an employer required employees to work on breadcarters' statutory monthly holidays, leave of absence at the above scale was to be allowed.

On 18th January, 1929, provision was made for every employee (including apprentices and assistants) to be allowed leave of absence for a continued period of one week for each twelve calendar months of service or where employment is terminated prior to completion of twelve months' service one day's leave for each two months' of service. Payment of extra wages is not to be accepted in lieu of leave of absence. The award at present in existence repeats these provisions.

Boarding and Lodging of Employee.-The first award of the Industrial Arbitration Court contained a provision that employees should not board and lodge with their employer. Such prohibition did not apply to the case of father and son, but it appears in most of the awards for both bakers and breadcarters in the different localities. In early country breadcarters' awards, boarding or lodging with an employer in the town was not allowed

except by the permission of the Chairman of Board, but it was allowed in country centres if the parties were mutually agreed. The provision does not appear in the current award for the country and the county of Northumberland areas. The Bakers (Cum.berland) award, at present in force, states that it shall not be made a term of employment that an employee, other than a member of the employer's family, shaH be allowed to board on the premises of the employer. Similar provisions are contained in the current Country Bakers award.

Day Baking Act, 1926.-This Act, which received assent on the 17th March, 1926, prohibited the making and baking of bread between 6 o'clock at night and half-past five in the morning or, upon any holiday prescribed by industrial awards or agreements regulating the conditions of employment of operative bakers ; or, in the counties of Cumberland and Northumberland at any time on any Sunday.

It is to be noted that the definition of " make or bake " in the Act does not include any operation connected with the preparation of dough for bread or pies. Doughmakers are therefore excluded from the operations of the Act. The Act not prohibit the making and baking of bread within the hours mentioned where the day upon which the bread is to be delivered is a double or treble delivery day, or where the making and baking is done to save dough endangered by unusual atmospheric conditions or unforeseen circumstances.

If by any award or industrial agreement, the starting time for persons exercising or employed in the trade or calling of a baker or pastrycook is later than 5.30 a.m., such starting time is binding on all employers and employees in such trade or calling. The Act also prohibits the delivery of bread on any day appointed as a holiday for breadcarters by any award or industrial agreement; or within the counties of Cumberland or Northumberland between the hours of 6 p.m. and

6 a.m. the following day ; or elsewhere between the hours of 6 p.m. or 5 a.m. on the following da.y. Common carriers, whose principal business is not the carriage of bread, are not covered by this provision, nor are purchasers taking delivery on the premises of the baker or vendor. ·

Early closing inspectors are given power of entry for the purpose of inspection under the Act. Breadcarters' Early Closing (Amendment) Act, 1900 provided that every baker in the metropolitan :a.rea should give to breadcarters by.him one. wh?le day as a h·oliday on the. third Wednesd.ay in each month. Provided that in the event of any pubhc holiday fallmg m the same week as the th1rd Wednesday many month, such

whole day holiday shall be observed as such public holiday and not on the third Wednesday. Breadcarters outside the metropolitan area in shopping areas were given four half holidays in each month or a whole holiday in each month. The attached tables and notes give information on the following:­

(1) Wages, Bakers in the county of Cumberland. (2) Wages, Automatic Bakeries. (3) Wages, Bakers--county of Northumberland. ( 4) \Vages, Bakers- country districts. · (5) Wages, Bakers-South Coast districts. (6) Hours-Starting times and apprenticeship, Northumberland. (7) Hours-Bakers-country districts. (8) Hours-Bakers-South Coast districts. (9) Wages, &c., Broken Hill Bakers and Breadcarters. 10) Wages, Hours, Starting and Finishing Times of Breadcarters, county of Cumberland. 11) Wages, Hours, Starting and Finishing Times of Breadcarters, county of Northumberland. 12) Wages, Hours, Starting and Finishing Times of Breadcarters, Country. _13) Wages, Hours, Starting and Finishing Times of Breadcarters, South Coast districts.

171

(1) BAKERS-COUNTY OF CUMBERLAND (SYDNEY, METROPOLITAN AREA AND ENVIRONS).-RATES OF WAGES

FIXED BY INDUSTRIAL TRIBUNALS AT THE DATES STATED, WHICH ARE THOSE ON WHICH THE AWARDS WERE GAZETTED.

RATES PER WEEK.

18th Septem- 30th March, 29th March, ber, 1903. 1908. 19ll.

3rd April, 1912.

6th May, 1916.

2nd June, 11)16.

£ 8. d.

Operative bakers 2 12 6

Machine hands .•

Foreman (night) (machine and hand) Foreman (day) (machine and hand) Doughmakers .. Others (day) ..

Others (night) Adult machine hands (day) Adult machine hands (night) • . . .

Foreman (machine and hand) (day or night) Ovensman (machine and hand) (day or night) Operative baker claas " A" baker class" B"

Doughmakers in charge (hand) Doughmakers, others . . . .

Foreman in charge of four or more em-ployees Foreman in charge of less than four em-ployees Ovensman Single hand

Doughmakers in charge (two or more) Other doughmakers All other operatives

19th 11th 25th 4th .

£ 8. d.

2 12 6

2 2 0

6th

Classification. January, March, November, August, July,

1920. 1921. 1921. 1922. 1923.

£ 8. d. £ 8. d. £ 8. d. £ 8. d. £ 8. d.

Foreman in charge of four or more

employees .. 5 4 6 5 13 6 5 10 6 5 6 6 5 7 6

Foreman in charge of less than four employees .. 4 19 6 5 8 6 5 5 6 5 1 6 5 2 6

Ovensman (assist-ing drawplate) .. .. 511 0 5 8 0 5 4 0 5 5 0

Ovensman .. 4 I9 6 5 8 6 5 5 6 5 I 6 5 2 6

Single hand .. 4 19 6 5 8 6 5 5 6 5 I 6 5 2 6

Doughmakers in charge .. 4 19 6 5 8 6 5 5 6 5 I

r2 6 Other doughmakers 4 I7 0 5 6 0 5 3 0 4 19 0 5 0 0 Other operatives .. 4 14 6 5 3 6 5 0 6 4 16 6 4 17 6 I

£ 8. d.

3 2 0

2 18 6

2 16 0

2 12 6

2 16 0

2 2 0

2 5 0

£ 8. d.

3 10 0

3 5 0

3 0 0

2 lO 0

£ 8. d.

4 0 0

3 15 0

3 10 0

3 0 0

£ 8, d.

3 15 0

3 12 6

28th I 28th I 8th I 8th

6th December, December, Septem- Septem- 9th

October, 1923. 1923. ber, 1925. ber, 1925. April,

1923. Midnight 1926. Day. Start. Day. Night. £ 8. d. £ 8. d. £ 8. d. £ 8. d. £ 8. d. £ 8.

5 10 6 510 6 6 10 6 5 12 6 6 12 6 6 2

5 5 6 5 5 6 6' 5 6 5 7 6 6 7 6 5 I7

5 8 0 5 8 0 6 8 0 5 10 0 6 10 0 6 0

5 5 6 5 5 6 6 5 6 5

7 6 6 7 6 5 17

5 5 6 5 5 6 6 5 6 5 7 6 6 7 6 5 17

5 5 6 5 5 6 5 5 6 5 7 6 5 7 6 5 7

5 3 0 5 3 0 5 3 0 5 5 0 5 5 0 5 5

5 0 6 5 0 6 6 0 6 5 2 6 6 2 6 5 12

Classification. 1st July, I

9th 23rd June, 13th October, 20t h Novem- 123rd Novem-1 1927. ber, 1932. 1933. 1933. ber, 1933. ber, 1934. I £ 8. d. £ 8. d. £ 8. d. £ 8. d. £ 8. d. £ s. d.

Foreman in charge of four 'of more em-ployees . . . . . . .. 6 18 6 6 3 6 6 2 0 5 15 6 5 13 6 5 14 6

Foreman in charge of less than four em-ployees . . . . .. . . 6 13 6 5 18 6 5 17 0 5 10 6 5 8 6 5 9 6

Ovensman (assisting drawplate) .. 6 16 0 6 1 0 5 19 6 . . .. ..

Ovensman .. .. .. .. 6 13 6 .. .. 5 10 6 5 8 6 5 9 6

Single hand .. . . .. . . 6 13 6 5 18 6 5 17 0 5 8 0 5 6 0 5 7 0

Doughmakers in charge .. .. 6 13 6 5 18 6 5 17 0 5 8 0 5 6 0 5 7 0

Other doughmakers .. .. .. 611 0 5 16 0 5 14 6 - 5 5 6 5 3 6 5 4 6

Other operatives .. .. .. 6 8 6 5 13 6 5 12 0 5 3 0 5 1 0 5 2 0

Assistants (minimum) .. .. .. 310 0 3 14 6 3 14 6 .. 3 13 6

(2.) CUMBERLAND AUTOMATIC BREAD BAKING ESTABLISHMENTS.

7th July, 1916.

£ IJ, d.

4 0 0

3 I5 0

3 15 0

3 15 0

3 15 0

3 12 6

3 10 0

24th Septem-ber,1926.

d. £ 8. d.

6 6 17 6

6 6 12 6

0 6 15 0

6 6 12 6

6 6 12 6

6 6 12 6

0 610 0

6 6 7 6

14th June, 1935.

£ 8. d.

5 15 6

510 6

. .

5 10 6

5 8 0

5 8 0

5 5 6

5 3 0

3 14 6

Classification.

17th October, 9th September, 23rd June, 13th October, 23rd November, 14th June,

1930. 1932. 193 3. 1933. 193 4. 193 5.

£ 8. d. £ 8. d. £ 8 . d. £ 8 . d. £ 8 . d. £ 8 . d.

Foreman in charge .. .. 611 0 5 18 6 5 17 0 5 10 6 5 9 6 5 10 6

Doughmaker .. .. .. 6 8 6 5 16 0 5 14 6 5 5 6 5 4 6 5 5 6

Helpers, adult . . . . .. 4 8 6 3 16 0 3 14 6 3 14 6 3 13 6 314 6

Helpers, junior, first year .. 1 15 0 1 9 9 1 9 3 1 9 3 l 8 10 l 9 3

Helpers, ju."lior, second year .. 2 0 0 1 14 0 1 13 3 l 13 3 1 12 10 1 13 3

Helpers, junior, third year .. 2 5 0 1 18 0 1 17 3 l 17 3 1 16 9 1 17 3

Helpers, junior, . fourth and sub-sequent years .. .. 2 15 0 2 6 6 2 5 6 2 5 6 2 411 2 5 6

(3 )

BAKERS-COUNTY

OF NORTHUMBERLAND, NEW SOUTH WALES ( NEWCASTLE

DISTRICT) .

WAGES

FIXED

BY

INDUSTRIAL

TRIBUNALS AT

THE

DATES STATED, WHICH

ARE

THOSE

ON

WHICH

THE

AWARDS

WERE

GAZETI'ED.

4tb January,

I

26tb June,

I

26th June,

/25th

Septem-

6tb July,

lot October, 22nd 1st December. 2nd

May,

11th

March,

6th

AprU,

19th October,

192-1.

1925.

1925.

h e r,

1925

.

C l aasiflcatiou .

1910

.

191 3.

Septe

mbe

r,

1916.

1919.

1921.

1923.

1923

.

1916

.

Midnight. Day.

Night . Day.

£

8 .

d.

£

s. d.

£

B.

d.

£

8.

d.

£

8.

d.

£

&.

d .

£

8 .

d .

£

8.

d..

I

£

8.

d.

£

& .

d.

£

8.

d.

£ .

8 .

d .

Foreman

with

2

or

more

operatives

· . .

. .

3

4

0

3 12 6 3 15

0

..

.. ..

. . . .

. .

. .

..

..

Foreman

alone

with

1

operative

. .

. .

3 2

0

3

10 0

3 15

0

..

.. . . .

.

. .

..

..

. . . .

Single

hand

..

. .

..

. .

. . . .

3 15

0

..

. .

..

. .

. . . .

..

.. . .

Da.yman

. .

..

. .

. .

2 15 6 3 2 6

310

0

..

..

. .

. . . . . . .

.

. .

..

Board

hand

. . .. .. . .

2 13

0

3

2

6 3

10 0

. .

..

. . .

.

..

..

. .

. .

. .

Foreman

in

charge

of

4

or

more

op e ratives

..

. .

..

. .

4

0

0

4 7 6 5 15 6 5 8

6

5

12

6 6

8 6 5 12

6

6 8 6 5 14

6

Oth

e r forem

e n

. . . . . .

..

. .

. .

..

3 15

0

4 2 6 5

10

6 5 3 6 5 7 6 6 3 6 5

7 6 6 3 6 5 9 6

Single ha.nds

. . .. ..

. .

. .

..

. .

3 15

0

4 2 6 5

10

6 5 3 6 5 7 6 6 3 6 5 7 6 6 3 6 5 9 6

Doughmakers

..

. .

..

..

. .

.. ..

3 15

0

4 2 6 5

10

6

5 3 6 5 7 6

5

7

6

5 7

6

5 7 6 5 9 6

Other

op e

ra tives

and

boardhands

.. . .

. .

..

..

3

10 0

3 17 6 5

!)

6 4 18 6 5 2 6 5 18 6 5 2 6 5

18

6 5 4 6

Foreman

in

charge

of

4

or

more

operatives

. .

610

6 6

10

6

611

6 6

I4

6

611

6 6 9

0

6 9

0

5 I 6 6 5 15

0

5

14

0

5

15

0

..

All

other

foremen

. .

. .

. .

6 5 6 6 5 6 6 6 6 6

9

6 6 6 6 6 4

0

6 4

0

5 11 6 5

IO . 0

5

9

0

5

10 0

. .

Single

hands

..

.. . .

. .

6 5 6 6 5 6 6 6 6 6

9

6 6 6 6 6 4

0

6

4

0

5 11 6

510

0

5 9

0

5

10

0

. .

Doughmakers

..

..

. .

. .

5

9

6 5

9

6 5

10

6 6 9

6

6 6 6 6 4

0

6 4

0

511

6

5 10 0

5

9

0

5

10

0

. .

Other

operatives

a nd

boardhands

. .

. .

6

0

6 6

0

6

I

6 1 6 6 4 6 6 1 6 5 19

0

5 19

0

5

6 6 5 5

0

5 4

o•

5 5

0

..

Ov e nsmen

. .

..

..

. . . .

. .

..

6

8

0

6 5

0

6 2

6 6 2

6

510

0

5

8

0

5 7

0

5 8

0

. .

•

Doughmakers

In

charge

Za.

Gd.

extra .

(4)

BAKERS

IN COUNTRY DISTRICTS

.-WAGES

FIXED

BY

INDUSTRIAL

TRIB

UNALS

AT

THE

D A TE

S

GAZETTED

I

9th January , 1

!12 0.

lith

Feb ruary,

19 21.

Claasoillcatlon.

2nd

July, 8th April,

15th

D ecem b er,

1st Se

p t .e mbe r ,

17 t h

Au g u st , 26th October , 2 5 t h

S epte m·

1 9 1 3 . 1

914 .

1 9 1 6.

Bp ec

l!l e d

1 922.

1 923.

192 3 .

bcr,

1 9 25

.

L a r g e

Towns

. Other

Towns

.

Towns .

Other Towns.

.£

8.

d.

£

8 .

d .

£

8.

d.

£

8 .

d.

£

8.

d.

£

&.

d.

£

8.

d.

£

3

d .

£

8.

d.

£ s.

d .

£

8.

d .

Foreman

in

charge

of

3

or

more

operatives

. .

. .

3

I O 0

3

10 0

4

0 0

. .

..

5

I2

6 5 2 6 5

IO

0

511

0

514

0

5 1 6

0

Foreman

in

charge

of

less

than

3

operatives

.. ..

3 3

0

3 3

0

3 1 5

0

..

. .

5 7 6

5

2 6 5 7 6

5

8

6

511

6 5

13

6

Board

h ands

. .

. .

. .

..

. .

2 I 3

0

3

0 0

3

IO

0

..

..

5

2

6

4

1 8 6 5

0 0

5 I

0

5 4

0

5

6

0

Doughm

ake

rs

. . ..

..

. .

..

2 16

0

3

0 0

3 15

0

. . ..

5

7

6 5

0

6 5

2

6 5 3 6 5 6 6 5 8 6

Single

hand

bak

e r . .

. .

. .

. .

..

. . ..

..

. .

. . . .

I

5 7 6 5 8 6

511

6 5 13 6

Foremen

in

charge

of

3

or

more

operatives

. . ..

..

. .

. .

5

0

6

. .

. .

. . ..

..

..

. .

Oth

e r forem

e n

..

. .

.. ..

. .

. .

..

..

4 1 5 6 4

10

6

. . .

.

..

.. . .

. .

Single

hands

. . . .

. .

. . . . . .

..

..

..

. .

..

.

.

I

. .

..

.. ..

Bo a

rd

hands

and

other

operatives

. . . .

..

..

..

..

4

10

6 4

6

6

..

. .

. .

..

..

. .

Do u

ghmak

e ra

. .

..

. . . .

. .

. .

..

. .

4 15 6 4 8 6

. . . .

. .

..

..

..

Claasl11cation.

I

22nd

October,

22nd

July, 31at

January. 9th

September , 11th April,

I

24th October,

9th February,

14th December, 14th June,

1926.

1927

.

1930

.

1932.

1933.

1933

.

1934. 1934.

1935

.

£

8.

d.

£

8,

d.

£

8 .

d.

£

8.

d .

£

8 .

d.

£

8.

d .

£

8.

d .

£

8.

d.

£

8.

d.

Foreman

in

charge

of

4

or

more

operatives

..

..

. .

6 1 7 6 6 18 6 6 16

0

6 3 6 6

2

0

6

0 0

5 13 6 5 1 4 6 5

I5

6

Foreman

in

eharge

of

less

than

4

operatives

..

. .

..

6 12 6 6 1 3 6

611

0

5 18 6 5 17

0

5 15

0

5 8 6 5

9 ·

6

510

6

Ovensmen

assisting

working

drawplate

. .

.. . .

. .

6

15

0

6

16

0

6 13 6 6 I 6

.. . .

.. ..

..

Ovensm

e n

..

. .

..

. . . . ..

. .

6 12 6 6 13 6

611

0

5 18 6 5 1 7

0

5

15

0

5 8 6 5 9

6 5

10

6

Singie

hands

. .

.. ..

..

..

. .

6 12 6 6 13 6

611

0

5 18 6 5 17

0

5 15

0

5 8 6 5

9

6 5

10

6

Doughmakers

in

charge

. . . .

..

..

. .

6 1 2 6 6 13 6

611

0

5 18 6 5 1 7

0

5

15

0

5 6

0

5

7

0

5

8

0

Othe

r

doughmakers

. . . .

. .

..

. .

6

1 0 0

6 11

0

6 8 6 5 1 6

0

5

14

6 5 12 6 5 3 6 5 4 6 5 5 6

All

oth e r

operatives

..

. . . . . . . . . .

6

7

6 6 8 6

6

6

0

5 13 6 5 12

0

5

10

0

5 1

0

5 2

0

5

3

0

---

-----

-----

-

· - - - -

-

173

(6) BAKERS-SOUTH COAST DISTRICT, NEW SOUTH WALES.-WAGES FIXED BY INDUSTRIAL TRIBUNALS AT THE DATES S1'ATED.

4th 17th 18th 19th 9th lOth 14th 1st 6th 26th I 25th· Classification. October, March, August, July, January, Sept em· January, Septem· J'uly, October, Scptem- 1911. 1915. 1916. 1918. 1920. ber, 1920. 1921. ber, 1922. 1923. 1923. ber, 1925. £ 8 , d. £ s. d. £ 8 . d. £ 8 . d. £ 8. d. £ 8. d. £ 8. d. £ 8. d. £ 8. d. £ s. d. £ s. d.

Foreman in charge of two or more operatives .. 3 2 0 3 1:2 6 .. . . .. .. . . .. .. .. . .

Foreman in charge of one operative baker .. 3 0 0 3 7 6 .. .. .. .. .. .. . . .. . .

Doughmakers (machine) .. 3 0 0 .. .. ·- .. .. .. . . .. . . .. Doughmakers (hand) .. 2 15 0 .. .. . . .. .. .. . . .. .. . . Board hands .. .. 2 15 0 . . . . .. .. .. .. . . .. . . .. Single-handed baker .. .. 3 7 6 .. .. .. . . .. . . . . .. . . Doughmaker .. . . .. 3 0 0 . . . . . . .. .. .. .. .. . . Board hand or other operative .. 3 0 0 .. .. .. .. . . . . . . . . . . Foreman in charge of four or more operatives .. .. .. 4 0 0 . . . . 5 5 0 5 12 6 5 12 6 5 13 6 5 16 6 5 18 6 Foreman in char ge of less than four operatives .. .. . . 3 15 0 . . . . 5 0 0 5 7 6 5 7 6 5 8 6 5 11 6 5 13 6 Ovensmen .. .. .. . . 3 15 0 3 16 0 4 13 0 5 0 0 5 7 6 5 7 6 5 8 6 5 11 6 5 13 6 Single-handed baker .. .. .. 3 15 0 3 16 0 4 13 0 5 0 0 5 7 6 5 7 6 5 8 6 5 ll 6 5 13 6 Doughmaker . . .. .. . . 3 12 6 3 14 0 4 11 0 4 17 6 5 5 0 5 5 0 5 6 0 5 9 0 5 11 0 Board hands a nd other operatives . . . . .. . . 3 7 6 3 9 6 4 6 6 4 12 6 5 0 0 5 0 0 5 l 01 5 4 0 5 6 0 • Award expired 6th September, 1926. Since t hen the South Coast area has been includ ed !!l t he Country Award. (6) PROVISIONS OF AWARDS FOR NORTHUMBERLAND BAKERS REGARDING HOURS, STARTING AND CE ASING TIMES AND APPRENTICES.

Date.

6th July, 1910

lst October, 1913 . .

l st December, 1916

22nd October, 1920

lOth November, 1922

4th J anuary, 1924 . .

23rd April, 1926

13th F ebruary, 1931

F.403.-10

Hours.

48 ordinary week with 6 hours added for meals and dressing

48

48

48 day, work 46 night work 44 ordinary . . . .

43 (carters holiday) . .

38 (two holidays in week)

44 hours (ordinary) 41! (1 carters holiday) 36! (2 carters holiday in the week)

Starting and Ceasing Times.

None stated . .

Starting time--Not earlier than 8 a .m. on ordinary days ; 6 a.m. on double and treble days Finishing time- 6 p .m . on ordi­

nary days Doughmakers to start to suit t he shop

Starting- September to April, not earlier than 6 a.m. on ordinary days. May to August not

earlier than 6.30 a.m. Starting-Not before 6 a .m . Finishing-6 p .m. Midnight start permitted

Starting-Not before 5.30 a.m. on single days; and at midnight on double and treble days. Doughmakers start to suit shop

Apprentices.

Age: Not over 17 years P eriod : 4 years P roportion-! apprentice to 3 men or under

2 apprentices to 4 to 6 men 3 apprentices from 7 to 9 men Pro rata afterwards Age and period as a bove Proportion-

! apprentice to 2 men 2 apprentices, 3 to 4 men 3 apprentices, 5 to 6 men 4 apprentices, 7 or more Age and period as above Proportion-

! apprentice to each ,shop 2 apprentices, 4 to 7 operatives 3 apprentices to 8 to 12 operatives 4 apprentices, to over 12 opera-

tives No shop allowed more than 4 Similar to last award

Age--18 years; other provisions similar to above

Date of reference.

2nd July, 1913

15th December, 1916

1st September, 1922

27th October, 1926

29th August, 1930 ..

9th February, 1934 ..

174

(7) BAKERS (COUNTRY).

Hours.

48 hours per week during January and February 51 hours per week during March and April

54 hours per week during May to August 51 hours per week during September and October 48 hours

48 hours ordinary . .

42 hours, one holiday in week

44 hours ordinary 42, one holiday in week .. 36, two holidays in week 38, treble day

48 ordinary week 45, holiday in week 39, two holidays in week 41, treble day, not Saturday 44 hours per week . .

42 hours, holiday in week 36 hours, two holidays in week 38 hours, treble day, not Saturday

Starting and Ceasing Times.

Not stated

Hours for baking-off : Between 8 a .m. and 8 p .m . on single and double days;

8 a .m. and 10 p.m. on treble days Doughmakers to suit shop Starting not before 6 a.m. . .

Finishing time not later than 8 p.m.

Starting 5.30 a.m. . . . .

Not before midnight on double or treble·day

Where week commences on Sun­ day-Not earlier than 5.30 a.m. ; finishing not later than six Where week commences on Mon­

day-On ordinary day, not before 5.30 a.m. and finishing not later than 6 p.m.; on

double days and treble days, not before midnight

Apprenticeship.

Youths under 17 years may be

indentured to learn making and moulding dough and baking Period-4 years Proportion-

! apprentice to each shop 2 to 4 operative bakers 3 to over 4

Age-18 or under Proportion-! to each shop 2 to 3 operatives

3 to more than 4 operatives No shop allowed more than 3 Age-17 years Proportion-

} to each shop 2 to 3 to 7 operatives 3 to 8 to 12 operatives Not more than 3 allowed

Youths •

Age-17 years or under may be ap'prenticed Period-4 years Approval of Apprenticeship Council

to be obtained Every apprentice to be taught

operation of making and mould­ ing dough and of baking Proportion-} to each shop

2 to 3 to 7 operative bakers 3 to 8 to 12 operative bakers 4 to 12 or more operative bakers No shop allowed more than 4

apprentices

(8) PROVISIONS OF AWARDS FOR SOUTH COAST BAKERS REGARDING HOURS, STARTING AND CEASING TIMES AND APPRENTICES.

Date. Hours. Starting and Ceasing Times. Apprentices.

4th October, 1911 .. 48 hours-Employees to be allowed Not provided, but starting times to Age-17 years or under on premises of employers for I h our be registered by employer with Period-4 years each working day or night for Industrial Registrar Proportion-

dressing and meals I to each shop

2 to 4 operatives 3 where more than 4 operatives employed

17th March, 1915 . . 48 hours .. .. . . Labour to be performed between

6 a.m. and 9 p :m. on ordinary Age- 15 t o I 7 years,

as above

and period

days ; 6 a.m. and 10 p.m. on Proportion-double days ; 6 a.m . and 11 p .m. 1 to each shop on treble days 2 to 4 operatives

Labour to be performed between Limited t o two apprentices

18th August, 1916 . . 48 hours .. .. . . Age, period and proportion as above

3 a.m. and 6 p .m. on single days ; 3 a .m. and 7 p.m. on double

days; 3 a.m. and 8 p .m. on

treble days. No baking befo re 7 a.m. allowed

19th July, 1918 . . 48 hours .. ..

" " " "

Age-Not less than 15 years P eriod and proportion as above

9th January, 1920 . . 48 hours .. .. ..

" " " " than 15 " l Oth September, 1920 48 ho urs .. .. . . " " " " years may be apprenticed P eriod-4 years Proportion-! to every 2 jour ney men, employed or part ther eof NoTE.-Since September, 1926, the South Coast Area has been included in the award for country districts.

175

(9) BAKERS-BROKEN HILL.-WAGES AND HOURS FIXED BY INDUSTRIAL AUTHORITIES.

Date.

6th August, 1913

lOth March, 1915 ..

24th March, 1916 ..

lOth November, 1916

15th October, 1920 ..

15th December, 1922

7th November, 1924

Wages.

Foreman in charge of three men or over .. Single-handed foreman . . . .

Small-goods foreman . . . . . .

Ovensman . . . .

Small-goods operative . .

Class A operatives . . . .

Class B operatives . . . .

Foreman in charge of three men or over .. Single-handed foreman . . . .

Small-goods foreman . . . .

Ovensman . . . . . .

Small-goods opemtive . . . .

Class A operative . . . . . .

Class B operative . . . . . .

Foreman in charge of three men or over Single-handed foreman ..

Small-goods foreman . . . .

Ovensman . . . .

Small-goods operative ..

Class A operative . . . .

Class B operative . . . .

Foreman in charge of three men or over .. Single-handed foreman . . . .

Ovensman: . . . .

. .

Operative baker . . . . . .

Foreman in charge of three men or more Foreman in charge of less than three men Single-handed foreman baker or small-goods foreman . . . . . .

Doughmakers . . . . . .

Board hands . . . . . .

Foreman in charge of three or more men Foreman in charge of less than three men

Single-handed foreman or small-goods foreman .. .. . . ..

Doughmakers .. . . . .

Board hands .. . . . .

Foreman in charge of three or more men Foreman in charge of less than three men Single-handed foreman or small-goods foreman .. .. . . ..

Doughmakers .. .. ..

Board hands .. .. . .

Per week. £ s. d.

4 5 0

4 0 0

4 0 0

4 0 0

3 10 0

3 10 0

3 0 0

Per hour.

Number of hours per week.

48

0 1 9! 48

0 1 8

0 1 8

0 1 8

0 1

0 1

6 1 3

Per week. 4 5 0 48

4 0 0

4 0 0

4 0 0

3 10 0

3 10 0

3 0 0

4 15 0

4 10 0

4 10 0

4 0 0

6 0 0

5 15 0

5 12 6

5 5 0

5 0 0

5 12 6

5 7 6

fj 7 6

5 5 0

fj 0 0

5 17 6

5 12 6

5 12 6

5 5 0

5 5 0

48

48

48 ordinary week 44 when one holi­ day in week

40 when two holi­ days in week

Hours of work.

May be worked day or nigh'.

Hours of baking, Monday to Friday, between 5 a.m. and 6 p.m.,

Friday night from 11 p.m. until finished Starting times-on single days-­ 5 a.m. and 6 p.m.

Double days from 9 p.m. until work is finished. On treble days or nights the work may start one hour earlier than on double days

No further awards covering the industry of baking at Broken Hill, and the award mentioned above was rescinded by the .Industrial Commission in February, 1935.

BREAD CARTERS-BROKEN HILL.

Date. Wages. Hours.

£ 8. d.

27th August, 1913 3 5 0 48

lOth November, 1916 3 15 0 48

15th October, 1920 4 15 0 48

15th December, 1922 4 7 6 48

30th November, 1924 4 15 0 48

No further awards covering the industry at Broken Hill were made, and the award of the 30th November, 1924, was rescinded in February, 1935.

176

(10) BREADOARTERS-OOUNTRY OF CUMBERLAND.-WAGES AND HOURS FIXED BYAWARDS OF INDUSTRIAL TRIBUNALS.

Date of Gazettal.

22nd September, 1902

21st July, 1909 ..

16th October, 1912 ..

2nd April, 1913 . .

3rd February , 1915 ..

31st January, 1919 . .

24th November, 1919 9th January, 1920 ..

18th February, 1921 2

9

2

2

1

2

8

3

9

I

2

5th November, 1921

2

2

J

th June, 1922 . .

8th August, 1922 . .

2nd May, 1925 . .

1th September, 1925 3rd July, 1926 ..

th July, 1927 ..

1st January, 1928 .. th September, 1932 lth April, 1933 ..

9th September, 1933

4th October, 1933 .. 3rd November, 1934 une, 1935 . . . .

Rate per week.

£ 8. d.

2 5 0

2 5 0

2 12 6

..

..

3 10 0

3 17 0

4 9 0

..

4 14 0

..

4 10 0

4 14 0

4 16 0

510 0

5 11 0

5 8 6

4 16 0

4 14 6

4 12 0

"

410 0

411 0

4 12 0

Ruling living wage.

£ 8 . d.

. .

..

..

. .

..

3 0 0

3 17 0

3 17 0

..

4 5 0

..

3 18 0

4 2 0

4 4 0

4 14 0

4 5 0

4 0

3 10 0

3 8 6

3

8 6

3 6 6

3 7 6

3 8 6

Hours per week. Starting time. Finishing time.

60, including 6 fo r Not before 5 a.m .

meals

54 ordinary .. Not 6 in June,

July and August, or 5.30 a.m. in remaining months of year

.. .. . . Not before 5.30 a.m .

. . .. .. Not earlier than 5.30 a.m. Not later than 5 p.m .

and not later than

7a.m .

54 or dinary week .. " " "

5.30 . p .m. on Saturday; 5 p.m. other days

54 ordinary week .. " " "

5.30 p.m. on Friday; 5

48 ordinary week .. Not before 7 a.m. p.m. other days . . 6p.m;

48 .. ..

"

,. .. 6p.m .

48 .. . .

" "

..

" 48 ordinary week .. " " .. "

44 ordinary week*

" "

..

"

44 .. .. tNot before 7 a .m. on ,

single days and 6 a.m. on other days

I

• Forty-four hours we ek Act, 1925. t Provided that where necessities of business so demand, the number of hours may be Increased by four hours wltlwut any liability to pay overtime rates under the awarrl.

(11) BREADCAR'l'ERS-CJOUNTY OF NORTHUMBERLAND (NEWCASTLE AND DISTRICT).-WAGES AND HOURS FIXED BY AWARDS OF INDUSTRIAL TRIBUNALS.

Date of Gar.ettal.

22nd September, 1909

19th February, 1913 . .

20th March, 1916

15th August, 1919

19th December, 1919 7th May, 1920 ..

4th March, 1921 ..

23rd December, 1921

17th November, 1922 18th May, 1923 . .

14th November, 1924

lith September, 1925 17th September, 1926 8th July, 1927 . .

7th F ebruary, 1930 . . 15th August, 1930 . .

9th September, 1932 . . 26th May , 1933 . .

12th October, ..

June, 1935 . .

R ate per week.

£ 8. d.

2 5 0

('l'owns) 2 2 0

(Country)

2 10 0

(Towns) 2 6 0

(Country)

2 17 6

3 5 0

3 18 0

4 I

6

4 10 0

4 7 0

4 3 0

4 4 0

4 7 0

4 9 0

4 14 0

4 15 0

4 12 6

4 0 0

3 18 6

4 1 6

4 2 6

I Ruling living wage.

£ s. d._

2 14 0

2 14 0

3 17 0

3 16

6

4 5 0

4 2 0

3 18 0

3 19 0

4 2 0

4 4 0

4 4 0

4 4 0

4 2 6

3 10 0

3 8

6

3 7 6

3 8 6

Hours per week. Starting time.

66 (Towns), including Not before 5 a.m. 9 hours for meals 69 (Country), includ-ing 9 hours for

meals

56 (Towns), exclu- Not before 5 a.m. sive of meals 59 (Country), exclu­ sive of meal times

54 ordinary week . . Not before 5 a .m. sum­ mer ; 5.30 a.m. winter

54 ordinary week ..

48 ordinary week ..

48 ordinary week ..

44 hours*

48 or dinary week

44 hours . .

Not before 7 a .m .

Not befor e 7.30 a .m .

single days

• Forty-fom hours week Act, 1925.

Finishing time.

5.30 p.m. Monday ; p.m. other days 5

6.30 p.m. Monday; 5 p .m. on other days

5.30 p .m. Monday ; 5 p.m. on other days

6 p.m.

6 p.m.

177

(12) BREADCARTERS-NEW SOUTH WALES-EXCEPT COUNTIES OF CUMBERLAND, NORTHUMBERLAND, YANCOWINNA AND SOUTH COAST DISTRICT.-HOURS AND WAGES FIXED BY AWARDS OF INDUSTRIAL TRIBUNALS.

Ruling living Hours I Date of Gazettal. Rate per week. per Starting time. Finishing time. wage. week. £ 8. d. £ s. d.

23rd July, 1913 .. 2 8 0 .. .. .. . . 56 Bread not to be delivered None stated

before 6 a.m. in June, July, August, and

before 5 a.m. in re-

15th December, 1916 3 3 0 Co bar .. ..

maining months of year

2 14 0 55 Not before 6 a.m. in June, ,

3 0 0 Armidale Group July, August, and 5.30

2 17 0 Cootamundra Group a .m. other months

2 14 0 Other towns

5th September, 1919 .. 3 10 6 Co bar .. .. 3 0 0 54 , , p.m. on Mondays,

3 7 6 Armidale Group 5 p.m. other days

3 5 0 Cootamundra Group

3 I 6 Other t owns

19th D ecember, 1919 3 17 0 (All places) .. 3 17 0

12th November, 1920 4 5 0 .. .. .. 4 5 ' 0

18th 1921 4 5 0 .. .. .. 4 .2 0 48 Not before 6 a.m. June, , ,

25th August, 1922 .. 4 1 0 .. .. .. 3 18 0 July and August, and

18th May, 1923 .. 4 2 0 .. .. .. 3 19 0 5 p.m. other months

12th October, 1923 .. 4 5 0 .. . . .. 4 2 0

13th June, 1924 .. 4 5 0 .. .. .. 4 2 0 48 ,

"

, ,

11th September, 1925 4 7 0 .. .. .. 4 4 0

1st October, 1926 .. 5 0 0 .. .. .. 4 4 0 44 No work to be done before 6p.m .

8th July, 1927 .. 5 1 0 .. .. .. 4 5 0 6a.m .

31st January, 1930 4 18 6 .. .. .. 4 2 6

9th September, 1932 . . 4 6 0 .. .. . . 3 10 0

11th April, 1933 .. 4 4 6 .. .. . . 3 8 6

24th October, 1933 .. 4 2 6 .. . . .. 3 6 6

21st December, 1934 4 3 6 .. .. . . 3 7 6

June, 1935 .. .. 4 4 6 .. .. . . 3 8 6

(13) BREADCARTERS-SOUTH COAST DISTRICT.-WAGES AND HOURS FIXED BY AWARDS OJ!' INDUSTR IAL TRIBUNALS.

Ruling living I Hom• I Date of Gazettal. Rate per week. per Starting time. Finishing time. wage. week. , £ 8. d. £ s. d.

4th October, 1911 .. 2 5 0 .. 54 Not before 5 a.m. September to March or No time stated

6 a.m. April to August

12th September, 1919 3 5 0 3 0 0 48 Between 6 a.m. and 5 p.m. in June, July,

August, and September; between 5.30 a.m. and 5 p.m. remaining months

9th January, 1920 3 17 0 3 17 0

28th May, 1920 .. 4 2 6 - 3 16 6

4th March, 1921 .. 4 10 0 4 5 0

17th March, 1922 .. 4 7 0 4 2 0

25th August, 1922 .. 4 3 0 3 18 0

13th October, 1922 .. 4 3 0 3 18 0 48 ,

" " " " 18th May, 1923 .. 4 4 0 3 19 0

12th October, 1923 .. 4 7 0 4 2 0

26th June, 1925 .. 4 7 0 4 2 0 48

" " " " " 11th September, 1925 4 9 0 4 4 0

1st October, 1926 .. 5 0 0 4 4 0 44 *Hours to be worked between 6 a.m . and

8th July, 1927 .. 5 1 0 4 5 0 6 p.m.

9th September, 1932 .. 4 6 0 3 10 0

11th April, 1933 .. 4 4 6 3 8 6

24th October, 1933 .. 4 2 6 3 6 6

21st December, 1934 4 3 6 3 7 6

June, 1935 .. .. 4 4 6 3 8 6

• Forty-four hours week Act, 1925.

APPENDIX B.

OVERTIME RATES FOR BAKERS AND BREADCARTERS. BAKERS.

New South Wales.

Cumberland.-The rate of overtime for work done in excess of the weekly or daily hours specified except as to apprentices and jobbers, shall be at the rate of time and a half. . .

Country.-The rate of overtime for work done in excess of the weekly or daily hours specified except as to assistants and jobbers shall be at the rate of time and a half.

Vwwrw.

Metropolitan.-Any employee (other than an apprentice) who works-(i) for;any in excess of the number of hours fixed for ordinary or double o-r alternatively.

(ii) during any week for any time in excess of 44 hours shall be paid for such extra t1me at the wages rate of double time. . .

Other Parts of State.-Any employee (other than an who works in any week for any t rm e m excess of 44 hours shall be paid for such extra time at the rate of time and a half. . . .

Special Rates.-Time and half shall be rate payable for all .work done on cert am public holidays.

178

Queensland.

Southern. and Mackay Divisio.ns.-The minimufil: overtime rates .payable to the following classes of persons for all :vork done. m excess of the ordmary weekly workmg hours, and m excess of the maximum daily limitation of ordmary workmg hours, shall be as follows and shall be paid in addition to the minimum weekly wage :-Southern. Mackay.

s. d. s. d.

Foreman (a) 3 6! 3 8!

Foreman (b) 3 4! 3 6!

Ovensman 3 2! 3 4!

Doughmakers 3 5! 3 7!

Single hands 3 4! 3 6!

Second hands 3 1! 3 3!

Unskilled workers 2 6 2 8!

On Friday nights employees may be allowed to work after 6 p.m. and until midnight ; time so worked shall be deemed overtime, and paid for at double the rate of ordinary time. The provision of this dause is independent of the clause immediately preceding. Provided that the overtime rate for employees in·Factories and Shops' District of Brisbane shall ·be paid 2d. per hour in addition to the rates prescribed for the Southern Division. ,

Northern Divis·ion.-All time worked in excess of the ordinary working hours on Sunday, Monday, Tuesday, Wednesday, Thursday and Friday shall be deemed overtime work and be paid for at one and a half times the ordinary rates, in addition to the ordinary weekly rate : Provided that all work performed by a foreman in preparing fermentations shall be paid for at the rate of 3s. 9d. per hour, with a minimum of one hour.

No operative baker shall be allowed to work overtime unless casual labour could not have been provided for. South Australia. Metropolitan Area.-Special time shall be paid for at the rate of double time. Overtime shall be paid for at the rate of time and a half.

Special time.-All time worked-(a) On Sundays or public holidays (except doughmaking or where otherwise specially provided). (b) During intervals for meals. (c) Before the starting times or after the finishing times hereby prescribed. (d) In excess of nine hours on more days than one from Monday 5 a.m. to Friday 6 p.m. inclusive in any

week.

(e) Within a period of eight hours before commencing double or treble nights. (f) In excess of ten hours between 6 p.m. on Fridays or double days and 11 a.m. on the following day. (g) In excess of twelve hours between 6 p.m. on treble days and 11 a.m. on the following day. (h) In excess of sixteen hours between 5 a.m. on Fridays or double days and 11 a.m. on the fol1owing day. (i) In excess of eighteen hours between 5 a.m. on treble days and 11 a.m. on the following day. (j) After 12.1 a.m. on a holiday (other than Monday) following a double or treble day. Overtime-

( a) On any Monday, being a public holiday, when baking of bread and rolls for restaurants (excluding hotels), cafes, racecourse and picnic stands, and ham shops may be started at 12.1 a.m.-all time worked between 12.1 a.m. and 5 a.m. (b) For all time worked in excess of 48 hours in any one week, exclusive of any time worked for which

special rates are payable. Country · (all parts of State, except metropolitan area)-Overtime.-All time worked in excess of 48 hours a week shall be paid for at the rate of time and· a quarter. '

Overtime­

Western Australia.

( a) All time worked in excess of forty-four (44) hours for the week shall be paid for at the rate of time and a half for the first three (3) hours and double time thereafter. (b) All time worked in excess of ten (10) hours on Friday evening shift shall be paid for at the rate of time and a half for first two hours and double time thereafter. (c) All time worked after 8 a.m. on Saturday morning on treble days shall be paid for at the rate of

double time. This clause shall also apply to jobbers. (d) All time worked on Sundays, excepting for doughmaking, shall be paid for at double time rates. No permanent hand shall work overtime in any bakehouse on work for which jobbers have been engaged while there are jobbers available in the bakehouse for such work. (e) Work done on Good Friday shall be paid for at the rate of double time.

Tasmania. ·

All time worked by employees in excess of eight and a half hours per day and in excess of ten hours per day on double treble days or in excess of 48 hours per week, shall be paid for at the rate of time and a half. BREADCARTERS.

New South Wales.

Oumberland.-Overtime shall be paid for at the rate of time and a half for all work done over 8! hours per single day, or over 10 hours per double or treble or over 44 hou!s . . . .

Provided that where time so worked ID excess of the said hmJtatwn 1s caused by exigenCies of busmess, and the employee has received the full weekly rate specified, the amount or sum payable as in respect of

the first four hours of such excess time shall be deemed to have been duly p:nd, such weekly rate havmg been computed so as to provide for a maximum of four hours' time worked in excess of the weekly limitation on account of the exigencies of the business. . . .

Oountry.-Overtime at the rate of time a h alf shall be (a) f.or all wo:k done m of the hours

specified; (b) for all work done before the startmg and fimslung tune ExceptiOns: where the

hours provided in the award are exceeded, and such excess Is directly caused ?Y not more than one hour on any day may be worked at half ordinary rate of pay. Where the hours provided form the award are exceeded, such excess is caused by wet weather having affected the roads, then Sl.lch excess on any day' may be worked at half ordinary rate of pay. shall be limited to six hours week.

179

Victoria.

(a) For stable workers :-In excess 48 hours in any week, 9d. per hour in addition to ordinary rates. (b) For. any other person :-Outside the hours fixed as the times of beginning and ending work, 3s. per hour m addition to ordinary rates : Within the hours fixed in excess of the number of hours fixed as the week's work, 9d. per hour in addition to ordinary rates.

Queensland.

Southern and Central Division.--Overtime for drivers and their assistants :-(1) (a) It shall not be lawful for any master baker, employer, or employee to sell, issue, cart, or deliver bread from or at or or to permit any other person so to do, before the fix ed starting time or after

the fixed time as set forth m the award, except to a person who takes delivery at the bakehouse, and who at not to resell such bread, and als_o in addition to such undertaking gives the person selling,

dehvermg, or ISSUing such bread reasonable grounds to beheve that such bread will not be resold: Provided that the sale, delivery, or issue of bread to any person before the fixed starting time or after the fixed ceasing time shall be for household consumption only, and shall not exceed 4 lb. in weight. Provided, however, that one such employee for each eight oT portion of eight drivers employed may be permitted to work at the rate of time and a half for one hour on each working day before such starting time, if required to assist in the loading of bread or other preparations for the day's work.

(b) Overtime shall not be worked by drivers of vehicles (horse or motor) of bread bakers and their assistants : Provided, however, that one such employee may be permitted to work at the rate of time and a half for one hour on each working day before such starting time, if required to assist in the loading of bread or other preparations for the day's work.

(2) In the case of accident or where delivery is delayed by adverse weather conditions, employees may work one hour's overtime at the rate of time and a half for such work; Provided that the said overtime shall be registered in the time and wages book on the day the overtime is worked. (3) (a) It shall not be lawful for any master baker, employer, or employee to sell, issue, cart, or deliver bread

from or at the bakehouse or elsewhere or to permit any person so to do, on the day of the weekly whole holiday, except to a person who takes delivery at the bakehouse and who at the same time undertakes in writing not to resell such bread, and also in addition to such undertaking gives the person selling, delivering, or issuing such bread reasonable grounds to believe that such bread will not be resold : Provided further that the sale, delivery, or issue of bread to

any person on such weekly whole holiday shall not exceed 4lb. in weight, unless such person is the keeper of a boarding­ house or is a hotel-keeper, or is the employee of a boarding-house keeper or hotel-keeper, or the employee of a club, and the bread is required for consumption in such boarding-house, hotel, or club. (b) It shall not be lawful for any person carrying on business as a bread baker, whether he employs labour or

not, to cart, sell, issue, or deliver, or permit any person to cart, sell, issue, or deliver, from his bakehouse or premises or elsewhere, any bread whatsoever on the day of the annual picnic or on a Sunday. (c) It shall not be lawful for any occupier of any factory or shop, as defined in section 4 of "The Factories and Shops Acts, 1900 to 1922 ", to receive or permit any person to receive bread on his behalf on the day of the weekly

whole holiday or on a Sunday or on the day of the annual picnic provided for in clause 15 (6) of this award, or befo'.'e the fixed starting or after the fixed ceasing time as set out in this award, except as provided for in the foregoing sub­ clauses of this clause. (4) Provided that for the purpose of delivering bread to railway stations or boats for transit, each employer

shall be permitted to work one employee on the Thursday holiday, or before the ordinary starting time at ordinary rates, provided that such employee's working hours do not exceed forty-four in any one week. Northern Division. Overtime shall not be worked by employees of bread bakers (horse or motor) and their assistants :

Provided, however, that one such employee may be permitted to work at the rate of time and a half for one hour on each working day before such starting time, if required to assist in the loading of bread or other preparations for the day's work. In the case of accident, or where delivery is delayed by adverse weather conditions, employees may work for

one hour after the fixed finishing time at the rate of time and a half for such work. It shall not be lawful for any employer or employee to cart or deliver bread or permit any other employers or employees to cart or deliver bread on the day of the weekly whole holiday or on Sunday. Provided that for the purpose of delivering bread to railway stations or boats for transit, each employer shall be permitted to work one employee on the Thursday holiday or befo:e the ordinary starting time at ordinary rates, provided that such employee's working hours do not exceed forty-four m any one week.

South Australia (Metropolitan A rea.)

Ordinary Overtime.-The employer shall pay the baker's carter for all time worked by such baker's carter in any one week in excess of the hours fixed at the rate of time and a quarter. Special Overtime.--The employer shall pa:y the baker's c,arter engaged .in delivery of bread rolls for all time worked in excess of five hours on any day on which such bakers carter has his compulsory half-holiday at the rate of

time and a half. The employer shall pay the baker's carter engaged in the . delivery of bread, rolls, and small goods for all. time worked on Sundays or public holidays, and for ti1-;;e 6.30 after p.m. on an7 " ordmary

day" at the rate of time and a half. The expresswn ora.mary day 1s used m th1s clause w1th the meanmg gener.ally attributed to it in the baking trade. Stable work on Sundays and holidays shall be paid for at the rate of double time.

Western Australia.

Metropolitan.- For all time of duty in excess of the hours prescribed or where the hours of duty exceed nine (9) hours on week days, Monday to Friday inclusive, and (8) hours on Saturday, payment shall be made at the rate of time and a quarter for the first two (2) hours tlme. a_nd a half ther.eafter. All overtime to stand alone and be paid for m add1t10n to the ordmary wage.

Tasmania.

For all time worked in excess of 48 hours per week the rate of payment for overt ime shall be time and a half. Provided that in any week in which there is a hoi day overtime shall be paid after 42 hom·s in a week i and where there two holidays in a week, after 34 hours a week. ·

180

APPENDIX C.

SUMMARY OF STATE REGULATIONS GOVERNING BAKERS' APPRENTICES AND IMPROVERS.

Apprentices-1st 6 months 2nd 6 months 3rd 6 months 4th 6 months 5th 6 months 6th 6 months 7th 6 months 8th 6 months

N EW SOUTH WALES.

Cumberland and Northumberland.

Wages per Week. Numbers Permitted.

Cumberland 1935. 8. d.

16 7

22 4

28 0

33 5

36 3

39 3

45 3

50 5

Northumber­ land 1934. 8. d.

22 0

24 5

26 7

29 3

32 4

36 0

40 6

56 11

Every shop shall be allowed one apprentice. Where four to seven operative bakers are employed as co nstant hands in any one bake­ house not more than two apprentices; where eight to twelve, not more than three; where over twelve, four apprentices . No shop shall be a llowed more than four apprentic es

Every indenture of apprenticeship shall provide that the apprentice shall be taught the operation of making and moulding dough, and shall provide that the apprentice shall attend the Tec hnical College, Sydney, if within reasonable distance of the college and the fees in respec t thereof shall be paid by the employer .

Assi stants Minimum rate £3 14s. 6d. Every machine shop shall be allowed one assistant. Where four to

seven operative bakers are employed as const ant hands in any one bakehouse not more than two assistants ; where eight to twelve, not more than four assistants ; where over twelve, five assistants shall be a llowed

An employer may· at the sa,me time have both apprentices and assistants up t o the limit•provided in each case.

Apprentices-1st 6 months 2nd 6 months 3rd 6 months 4th 6 months 5th 6 months

6th 6 months 7th 6 months 8th 6 months Assistants-

IS years of age 19 years of age .20 years of age 21 years of age -and over Assistants employed on draw­

plate ovens shall receive wages at the same rate as operative bakers

let 6 months 2nd 6 months 3rd 6 months 4th 6 months 5th 6 months

6th 6 months 7th 6 months 8th 6 months And thereafter the mini­

mum wage

lst year

2nd year · 3rd year 4th year-lst 6 months

2nd 6 months

Improvers-1st 6 months 2nd 6 months 3rd 6 months 4th 6 months 5th 6 months

6th 6 months 7th 6 months 8th 6 months and thereafter the mini­

mum wage

8. d.

16 11 23 2

28 6

34 2

37 0

40 5

46 2

51 4

27 6

35 7

44 7

67 6

Country.

Every shop shall be allowed one apprentice. Where three to seven operative bakers are employed as constant hands in any one bake­ house not more than t wo apprentices shall be employed; where eight to twelve operatives are employed, not more than three apprentices shall be employed ; four apprentices to twelve or more operative bakers. No shop shall be allowed more than fonr apprentices

Every machine shop shall be allowed one assistant. Where three to seven operative bakers are employed as constant hands in any one bakehouse, not more than two assistants shall be employed ; when eight to twelve operati ve bakers are employed, not more than three assistants shall be employed. No shop shall be allowed J?Ore than three assistants

VICTORIA.

Metropolitan (and CertainProvincial and Rural Areas ).

8. d.

22 6

24 9

27 0

29 3

31 6

33 9

40 6

49 6

18 0

22 6

27 0

33 9

40 6

91 0

One apprentice to every three, or fraction of three workers receiving not less than £5 Os. lOd. per week of 44 hours

Other Part8 of State.

One apprentice to every t hree or fraction vf three workers receiving not less than £5 Os. lOd. per week of 44 hours

One improver t o every eight workers receiving not less than £5 Os. lOd . per week of 44 hours

Apprentices-1st 6 months 2nd 6 months 3rd 6 months 4th 6 months 5th 6 months

6th 6 months 7th 6 months 8th 6 months Improvers-

1st year's experience 2nd year's experience 3rd year's experience 4th year's experience

And thereafter minimum wage fixed for a baker

Apprentices-1st 6 months 2nd 6 months 3rd 6 months 4th 6 months 5th 6 months 6th 6 months

7th 6 months 8th 6 months Improvers-1st year

2nd year 3rd year 4th year

Apprentices-1st 6 months 2nd 6 months 3rd 6 months 4th 6 months 5th 6 months

6th 6 months 7th 6 months 8th 6 months

1st year- · 1st 6 months 2nd 6 months ..

2nd year 3rd year 4th year 5th year

181

Wages per Week. Numbers Permitted.

14 18 22 25 29 33

36 44

18 25 33 44

8.

15 20 25 30 35

40 45 50

20 30 40 50

d. 9

6

6

9

6

3

9

0

6

9

3

0

d. 0

0

0

0

0

0

0

0

0

0

0

0

SouTH AusTRALIA.

Metropolitan.

One apprentice to every four , or fraction of four, operative bakers employed and in receipt of not less than the minimum wage fix ed by Dat Jrmiuation. I ndentures of apprenticeship shall be for a period of four years

One to ev ery six or fraction of six operative bakers employed and in receipt of not less than the minimum wage fixed by Determination

Other Parts of State.

One apprentice t o every t wo, or fraction of t wo operative bakers employed and in receipt of not less than the minimum wage of the award. Provided that one apprentice shall be allowed to each employer al}d that two operative bakers shall be employed by an

employer before the second app rentice may be employed

One improver to every two or fraction of two operative bakers employed and in receipt of not less than the minimum wage fixed by the award. Provided that one improver shall be allowed to each employer and provided also that two operative bakers shall

be employed by an employer before the second improver may be employed

Q UEENSLAND.

Southern a.nd Mackay. Northern. 8 . d.

17 6

22 6

27 6

35 0

40 0

45 0

50 0

55 0

cl.

1.'5 7

19 7

23 6

35 3

51 0

66 4

8. d.

20 6

30 6

36 0

41 0

50 0

57 6

65 0

73 0

One apprentice where one or two fully.paid brea.d bakers are employed and have been employed continuously during the preceding six months. Two where four, five, siJ> or seven fully-paid brea.d-bakers are employed. Three where eight or more fully-paid brea.d-bakers

are employed. Provided that every employer engaged in brea.d­ baking shall be entitled to one apprentice. Period of apprentice ­ ship shall be for four years

WESTER N AUSTRALIA.

One to every four or fraction of four journeymen permanently em­ ployed. Term of apprenticeship fi ve years. Apprentices sh all be examined in handing up in l st year, moulding and sha.p ing in their 2nd year, peeling on and fermenta.t ion in their 3rd year, dough­

making in 4th year and oven work in 5th year

I n Western Australia t here is a Schedule of Apprenticeship Regulations which relates to Employment, Advisory Committee, Agreement of Apprenticeship, Transfer of Apprentices, Cancellation of Agreement, Extension of Term, Technical Education, E:x;l\m.inl).tion, Lost Time, Part-time Employme!}t and miscellaneous Matters.

Apprentices-1st year 2nd year 3rd year

4th year 5th year

T asmania.

18s. 23s. 28s. 40s.

65s.

The period of apprenticeship shall be for five._years. The number shall be in proport ion. of two apprentices to every journeyman employed of the same sex as the apprentices m questiOn, who have been contmuously employed by the same employer tor a period of not less than six months ir:umediately pri?r t o the date of The adult employees to be considered as journeymen for the purpose of the number of apprentiCes

shall be the employer working in the trade, and all emplo yees work.mg the proVlsiO ns . of Part I. of the Determinat ion who are in receipt of not less than £4 13s. per week (subJ eCt t o ad justment to the JO urney man rate).

Improvers-1st year 2nd year

182

£2 £3 5s.

and thereafter at the minimum rate for the class of work in question. The number of improvers that may be employed shall be in the proportion of one to every three journeymen. " Improver " means and includes any person who has served a t erm of not less than three years as an apprentice and

(a) is not over the age of 21 years; or (b) over the age of 21 years, holds a licence from the Chief Inspector of F actories to be paid as an Improver .

•

APPENDIX D.

Confidential.]

RoYAL CoMMISSION ON THE WHEAT INDUSTRY, 1934.

BAKERS-STATISTICAL AND FINANCIAL RETURN- STATEMENT M.

Owner of Business ....... ........ ..... ... ... ... ........ ....... ..... ..... ....... ....... ... .. ..... ... ..... ..... ...... ... .... ... .

Address ... ..... ..... .. .. ........ ... ....... ...... .... .. .. .. ....... ... .... ........ ... ....... ...... ..... ........... .. .. ...... ...... . ..

S'TATISTICAL INFOll-MATION.

1. Number of bakeries operated ...... .... ............................ ..

2. Localities .. ..... .. ... .. ......... ....... ... .... ........... .... .... .. .................... .. .. ........................ ..... .... .. ........ ... .... ... .. ... .. .... ...... ..... .......... .............. .. .

3. Situation of bakery covered by this return ...... ..... ....... .... ................... ........ ... .......... .. .......... ........ .... .............. ... .. ..... ... ......... ..

4. For how lo ng have you been carrying on business as a master baker L .... .. ........... .. ... years.

5. Weekly capacity of bakehouse, expressed in bags of flour of 150 lb ....... .. ......... .. .. .. .. .... .. ..... .......... .. ... ... .. ........... ... .. ..... .. .

6. From whom do you obtain yom supplies of flour 1.. ...... .. .. : .. ... .. .......................... ...... .. .......................................... .. ......... .

7. Are you at liberty to purchase flour from any firm 1 If not, what is the reason ?... ... ................................................. .

1 8. If you find variations in the quality of flour used for bread-making, what action do you take to correct them 1

9. Is your bread manufactured by machine process or by hand ?... ......... .... .. ..... ....... .. ................. ..... .... ..... ..... .. .............. ... .

( Set explmwtor11 11ote---Item 9).

10. What improvers (if any) do you add 1 Detail and state the proportion of each per bag of flour .. .. ................ .

11. Average weekly output of-(a) bread (ordinary white)--number of 4-lb. loaves

(Se e definition " a ") " 2- lb.

)) 1-lb. "

(b) bread (ordinary brown)-number of 4-lb. loaves

" 2-lb.

" 1-lb.

"

"

(c) bread (fancy, including Vienna)-number of Vienna

(See defi nition " b ") , Others

{d) bread (breakfast rolls)

(e) cakes and pastry (including sponges and yeast small goods)

12. Average quantity of flour used weekly for­ (a ) bread (ordinary white) . .

(b) bread (brown) (c) bread (fancy, including breakfast rolls and fancy loaves)

(d) cakes and pastry (including sp onges, yeast, small goods, &c .)

(e) other purposes 13. Average quantity of wheaten meal used weekly for brown bread

... . dozen.

..... ... ... .... ... .... ...... ...... .. .... ... .. dozen.

. ,., .. ... .... ... .. . . . .lb.

.... .. ... ... .... . .... .. . .lb .

. ...... . ...... .. . .lb.

........ .... .. .. .. ... .. .lb .

. . .. .......... .. .. .. .... .. lb .

.. ...... .. .. .. .. ... ... .... lb.

183

14:. Average weekly sales (deliveries and counter sale,;) of­

(a) bread (ordinary white) wholesale-4-lb. loaves

2-lb. "

1-lb.

"

retail-4-lb. loaves 2-lb. "

1-lb.

relief-4-lb. loaves 2-lb. "

1-lb. "

Govemment and other contracts-4-lb. loaves _ 2-lb. 1-lb. ,

,

(b) bread (ordinary brown) wholesale-4-lb. loaves 2-lb. 1-lb.· retail-4-lb. loaves

2-lb. ,

1-lb.

"

relief-4-lb. loaves 2-lb. ,

1-lb.

"

Govemment and other contracts-4-lb. loaves 2-lb.

(c) bread (fancy)-wholesale

retail

(d) bread (rolls)-wholesale

retail

(e) cakes and pastry-wholesale retail

1-lb.

"

15. Number of each class of employee engaged during the yea.r-

doz. ,

Quantity. Average Price (p er doz.)

8. d.

1-------------

1-------------

1------- ------

1--------------

1------- - -- -----

1---------- ---

1---- ---- - -----

-------------- 1------ -------

---------- ------

(a) bakehouse (include foremen bakers, operative bakers, improver, dough­ makers, bakers' assistants, apprentices, and any others employed solely in the bakehouse) . . .. .. ....................... .. ........ ...... .... .... .. ..

(b) distributing (include yard-foreman, loaders, emergency men, carters, and any others employed solely on distribution)

(c) shop (include counter-hands, assistants,and others)

(d) office (include manager, clerks, and other office staff)

(e) particulars of personal or family labour (see accompanying notes-15(e))­

(i) partner(s) or employer (ii) wife (iii) adult males (iv) adult females

(v) children under 21 years

16. Number and t ype of vehicles used in delivery­

(a) horse-drawn- number . .

(b) motors-

original cost to you depreciated value ••

number •• original cost to you depreciated value ••

£ .... .... ....... .... ...... ...... ...... ... .... ... .... .... .

£ ..... ... .. ...... .. ... .... .... ............ ..... .. ....... .

£ ............ ............. .............. .. ... ......... .

£ ... .... ......... .... ..... ... ... ........ ... .. .... .. .

184

17. Daily rounds and deliveries (see accompanying notes-17)­ (a) number of daily rounds (b) in respect of the number of daily rounds (17 a) please show-

Particulars. Round 1. Round 2. Round 3. Round 4. Round 5. Round 6. Round 7. Round 8. Total.

Number customers served Suburbs or districts in which customers served ..

Approximate mileage cover ed

Average number of ordinary loaves delivered (white and brown) .. ..

Average number of fancy loaves delivered Vienna (s ee definition (b)) .. ..

Others . . ..

Average number of cakes, pastry, rolls, &c., delivered (dozens) .. ..

18. (a) If bakery andj or shop premises rented, please state weekly rental paid by you (b) If bakery andj or shop premises leased, please state­ (i) period lease has to run

(ii) lease rental per week (c) If residing on own bakery andjor shop premises, please state weekly rental value (d) If own premises or part thereof let, or rented premises sub-let, please state

weekly rental received therefrom

£ ...... ... ..... .. ..... .. .......... ...... .... .. ........ .. .

.... ... .. ... ..... ....... ... .... ..... ........ years.

£ .... ..... ........ .. .................................... .

£ ... ..... ............ .. ...... ......... ... .. .......... ... .

£,.,.,,,,.,., , ,,,.,,.,e,.,.,.,.,.,,.,.,.,,.,.,.,.,.,.,,.,

19. Please furnish the following information in regard to the main items of your bakehouse plant and machinery:-

Item of Plant or Machinery Original t'ost to you. Number of years it has Present working condition. been use.

£

STATEMENT OF PRODUCTION, DISTRIBUTION, AND ADMINISTRATION COSTS FOR THE YEARS 1928, 1931, 1932, AND 1933.

Costs.

Financial Year 1928. Financial Year 1931.

Financial Year 1932. Financial Year 1933.

--------------------------1----,--·1-----------------------

PRODUOTION-Salaries and wages­ Bakehouse operatives Other bakehouse employees Materials-flour, 1928 (tons)

1931 1932 1933

" , -other ingredients and improvers Feul (fuel oil, coke, wood, &c.) Power and light Rent of bakehouse Repairs and upkeep of bakehouse plant and machinery Insurance--(a) Workers' Compensatiuu (bakehouse staff)

· (b) Fire risk and boiler explosions, &c . . .

Depreciation-(a) Bakehouse ovens-Rate per cent. (b) Plant-Rate per cent ... (c) Machinery- Rate per cent. Other production costs-

Total Production Costs

£ 8. cl. £ 8. d. £ 8, d. £ 8. d.

rl '

185

STATEMENT OF PRODUCTION, DISTRIBUTION , AND ADMINISTRATION CoSTS FOR THE YEARS 1928, 1931, 1932, AN:D 1933--continued.

Costs. Financial Year 1928.

Financial Year 1931. Financial Year 1932.

FlnanClal Year • 1933.

- ·-------·--·------------------1------------------------- --

DISTRIBUTION-

£ 8. d. £ 8. d. £ 8. d. £ 8. d.

Salaries and wages ..

Horse-feed and stable expenses, horse replacements, &c. Rent--( a) shop premises (b) other premises, stables, yards, &c. ----------- · ---------------__ .

Motor expenses-repairs, oil, petrol, &c . Power and light Insurance-(a) Workers' Compensation (b) Other (except horses and motors)

Depreciation-(a) Carts, harness, &c.-Rate per cent. (b) Motor vehicles-Rate per cent. Other distribution costs

Total Distribution Costs

ADMINISTRATION­ Salaries and wages-( a) manager (b) office staff

Director's fees .. Printing and statione_ry Telephone charges Travelling expenses

Legal expenses .. Power and light Discounts Advertising Subscriptions to Trade Protection Association Audit and Accountancy Fees

Bank charges .. Bad debts written off R ents-(a) business premises (b) other premises (details )

Rates and taxes (excluding Federal and State Income Other administration costs-

'rotal Administration Costs

Taxes)

TOTAL PRODUCTION, DISTRIBUTION AND ADMINISTRATION COSTS. Interest paid on borrowed capital, including loans, advances, bank overdraft, and mortgages Federal and State Taxes­

Federal Income Tax State Income Tax Flour Tax Sales Tax

----------;---------

---------------- · - ---------

-- . - - -------------------- -

GRAND TOTAL £

STATEMENT OF AssETS (BooK VALUE) AcTUALLY EMPLOYED IN THE BusiNESS.

Assets.

Flnanc!a.l Year Financial Year Financial Year Financial Year

Hl28. 1931. 1932. 1933.

--------------- - - - ------ - £ 6. d. £ 8. d. £ 8 . d. £ 8 . d.

Land and buildings .. .. . . .. ----------- - --- - - --- - - ----- -

Plant and machinery .. .. .. . . .. ----------- - ---------- --- - - -

Motor vehicles .. .. . . .. . . .. ---------- -------------- ----

Horses, carts, harness, &c. .. .. . . . . ------------------ - --- - - - - --

Shop and office furniture, fittings, &c. .. .. . . ----------- - ----- - - ---------

Book debts .. .. .. .. . . .. ---- - --- --- - - - - - - - - - - --- - - --

Stocks (closing) flour, bread and cake-making material, fuel, &c. - ------- - - - - --- - - -------- - - -

Cash at Bank or in hand . . ' . . . . .. . . --------------- --- - --- - - --- -

Investments (if any) outside the business . . . . . . ------------------ - - - - - - - - --

Goodwill (if included in purchase price when business was bought) -------- - - ------------ - - ----

Other assets employed in the business (details)------------------ - - ----- ----Total value of Assets (book value) . . £

186

STATEMENT OF BuSINESS LIABILITIES.

·-

Assets. Financial Year Financial Year

1928.

---- £ 8. d.

Amount owing by way of advances, loans, bank overdraft or mortgage (see requirements vide accompanying explanatory notes) . . . . . . . . . . . . ------ Amount owing for supplies of flour and other materials Reserve for bad or doubtful debts . . . . . . .. ------ .. Any other business liabilities (details)- -------- --Total Business Liabilities .. .. £

STATEMENT OF EARNINGS.

Sales of bread (all types)­ (a) wholesale (b) retail (c) relief . . . .

(d) Government and other contracts Sales of cakes and pastry-( a) wholesale (b) retail Discounts Flour bags Interest received . . . .

Rents from business premises let or sub-let Other earnings from the business (detail)-

Total Earnings

I

£

1931.

----- £ 8.

---- ---- ---- ----

CERTIFICATE OF OWNER OR MANAGER.

--d. -- --

--

--

Financial Year Financial Year 1932. 1933 .

----------- -£ 8. d. £ 8. d.

--------- ---------- ---------- ----------

I hereby declare that the information contained in this return is true and that the particulars supplied in relation to the financial affairs of the business are in agreement with the books of account and other records of the business.

Owner or Manager. 1 11934.

CERTIFICATE WHER:E .AUDITORS ENGAGED.

The information contained in this return as to the financial affairs of the business has been prepared from the

books of the firm which have been audited by us. WI e certify the same to be correct. company me.

RoYAL CoMMISSION ON THE WHEAT INDUSTRY, 1934.

Auditor(s). 1 11934.

EXPLANATORY NOTES FOR GUIDANCE OF BAKERS IN PREPARING STATISTICAL INFORMATION AND STATEMENT OF REVENUE AND EXPENDITURE-STATEMENT M. STATISTICAL INFORMATION.

DEFINITIONS (a) A 4-lb. loaf is defined as one in the manufacture of which provision has not been made for ready division into two 2-lb. loaves. (b) Fancy bread includes Vienna loaves and any other types of bread not made in 4-lb., 2-lb., or 1-lb. loaves. (NOTE.-In New South Wales Vienna loaves will be included with ordinary bread.) Item 9.-If bread is manufactured by machiine process please state if (a) wholly automatic, (b) semi-automatic, (c) individual, (d) wholly machine-made, or (e) partly machine-made.

Items 11, 12, and 14.-The average weekly statistics should be ascertained from the records of 1933. If the present weekly average differs appreciably from that computed on the basis of the figures for the year mentioned, please state why. Item 15 (e).-It is desirred that, in addition to particulars of personal and family employees engaged in the business, you state (a) in which section each is engaged, viz. : production, distribution, or administration; (b) what proportion of time each is so employed; and (c) the weekly wage actually paid to each person.

Item 17 .-The information required at this point relates to each carter's round or run. If you have more than eight (8) rounds, attach a separate statement. Please exercise care in snowing the suburbs or districts in which each carter serves customers.

187

PRODUCTION, DISTRIBUTION, AND ADMINISTRATION COSTS.

Production.

and Wages.-?nly salaries and wages of foreman bake!, operative bakers, improver,

bakers assistants and apprentices and any other employees engaged solely m the bakehouse should be shown agamst this item. against" other bakehouse employees" salaries and wages of those not actually engaged in bread-making, e.g., supervisors, cleaners, &c. Workers' Compensation and any similar classes of insurance, or any special wage tax in respect of bakehouse employees should be shown separately under their respective sub-heads.

Materials.-Flour-The quantity of flour used (in tons) should be inserted against the years shown in the costs column; Other-Include against this item expenditure on wheaten meal, yeast, other ingredients and improvers (milk, salt, malt, &c.). Power and Light.-Include only power and light used in the bakehouse ; if separate meters not installed, please

make an apportionment on the basis of consumption. · Rent.-Inrlude rental of bakehouse only. If the bakehouse forms part of premises used for other purposes, make an apportionment on the basis of floor space occupied. .

Repairs and Upkeep of Bakehouse Plant and Machinery.-Any items of expenditure of a capital nature such as additional plant, building extentions, &c., should not be included. Depreciation.-As it is likely that separate rates of depreciation have been applied to bakehouse ovens, plant and machinery, provision has been made for the amount written off under this sub-head to be shown in three sections. In filling in the figures, please quote the rate of depreciation you have allowed for each of the three types of plant mentioned.

Other Production Oosts.-Include against this item any expenditure on production not shown against any of the foregoing production sub-heads. Distribution.

Salaries and Wages.-Only salaries and wages of yard foreman, loaders, emergency men, carters, counter-hands, shop assistants, and others employed solely on distribution should be included under this sub-head. Workers' Compensation and any other similar items of insurance or any special wage tax should be shown separately under their respective sub-heads.

Horses, Horse-feed, and Stable Expenses.-The expenditure shown against this item should include fodder, bedding for horses, cart and harness repairs, insurance, shoeing, veterinary fees, and horse replacements. Where the number of horses waa increased, the amount should be treated as capital and excluded from distribution costs. Rent.-Include rent of portion of premises used for distribution. If necessary, make apportionment of cost

on basis of floor space used in distribution. If shop premises used solely for saies, include cqsts under Distribution­ Rent (a). Motor Expenses.-Should include running costs, repairs, registration, insurance, driver's licence, and any other expenditure on upkeep of motor vehicles used for distribution. Where a private motor car is used also in co nnexion with

the business, the charge representing the proportion of time it is so employed should not be shown here, but included against Travelling expenses under the sub-head ADMINISTRATION. Power and Light.-Include proportion properly chargeable to distribution, e.g., light in stables, loading sheds and shop.

Insurance.-Include against this item any insurance premiums paid in connexion with any distribution assets, other than horses, carts, harness, and motors. Depreciation.-Please show against carts, harness, &c., and motor vehicles respectively the rates at which depreciation has been written off.

Other Distribution Oosts.-Include against this item any expenditure not shown against any of the foregoing dist.ribution sub-heads. Note.-If distribution is effected under contract, please show as a separate item of cost, and the rate paid.

Administration.

Salaries and Wages.-Office Staff-Should include salaries of manager, clerks, and office staff generally, and any labour expenditure that cannot be charged direct to production or distribution. Travelling Expenses.-Should cover any expenditure on travelling incurred solely in connexion with the businesA, including any proportion of private motor-car expenses properly chargeable against the business.

Bad Debts.-Include only bad debts actually written off during the year. If you have not written off any bad debts during the last year, please state whether you have any accounts that have been outstanding over three (3) years, the number and the amount involved. Rent.-Include rent of office premises or property used for administrative work. If neressary, make

apportionment of cost on basis of floor space used. If a is used solely.for sales and no administrative Vi:ork, show expenditure under Distribution. Include under (b) rent paid for any premises not actually used for the busmess, e.g., premises acquired to increase your business and sub-let, but the rental received does not cover rental you pay for them-give details. . . . . . .

Other Administrative Oosts.-Include agamst this Item any expenditure not shown agamst any of the foregomg administrative items. STATEMENT OF EARNINGS.

Sales of Bread.- Include earnings from all types of bread, i.e., ordinary (white and brown), fancy loaves, and bread rolls. Other Earnings.- ·-If there are any other earnings from not mentioned on Statement M, they should be included against the sub-head " Other Earnings " and details furmshed.

STATEMENT OF ASSETS.

The value of the assets (except stocks on hand) be stated the book figu:es. . . .

Investments.-Details should be supplied of any capital of the busmess employed m outside mvestments, statmg the annual return therefrom. Goodwill.-Should be included only if an amount was actually paid for goodwill when you purchased the business. Swcks on Hand.-Should be shown at cost or at current market value, whichever is the lo wer.

188

STATEMENT OF BUSINESS LIABILITIES.

Advances, Loans, Mortgages, &c.-A supporting statement, giving full particulars of advances, loans, overdrafts mortgages, &c., is required, showing the names of the institutions, banks, firms, or persons to whom you are indebted for money borrowed, and the rate of interest charged. It is desired to know to what extent (if any) you are in arrears with regard to the repayment of principal andj or interest.

If you are indebted to any institution, firm, or person in connexion with the purchase of your business, please state the name and address of such person or firm, and the amount still owing by you, and the rate of interest charged.

APPENDIX E.

SOME OBSERVATIONS ON GLUTEN, MALTOSE, DIASTASE AND STRENGTH IN WHEAT AND FLOUR. By Leslie W. Samuel, Ph.D. (Lond.) A.I.O., Cereal Research Officer in Department of Agriculture, Western Australia. PROTEINS IN WHEAT FLOUR.

The principal proteins identified in wheat flour by Osborne (1907) were gliadin, glutenin, leucosin, a globulin, a nucleo-protein and one or more proteoses. Of these, the gliadin and glutenin occur in approximately equal proportions and together form than 90 per cent. of the proteins present. Gliadin is the protein soluble in dilute ethyl alcohol, the amount extracted from a flour depending on the conditions of the extraction, particularly on the strength of the alcohol, so that standard conditions and 70 per cent.

alcohol (by volume) are specified for its determination. Gliadin is soluble in many organic solvents and is dispersed as a colloidal sol in dilute aqueous solutions of acids and alkalies and partially dispersed in aqueous salt solutions. With a small amount of water gliadin swells, coheres and forms a sticky, gluey mass and so is regarded as causing the coherence in gluten and in flour dough.

Investigations of the physical and chemical properties of gliadin have shown that the same product is obtained from strong and from weak flours. Glutenin has markedly different properties. It is practically insoluble in water, alcohol and aqueous salt solutions, slightly soluble in hot dilute a1cohol and is dispersed in dilute aqueous solutions ofacids and alkalies. With a small amount of water glutenin swells but does not form the same sticky, gluey mass that gliadin does. Glutenin is the most distinctive of the proteins of flours as it does not occur in any species other than those of the genus Triticum. Within this genus, however, its properties, particularly its colloidal properties, may vary widely, but it

appears to be chemically the same substance whether obtained from a strong or a weak flour. rrhe estimation of glutenin presents difficulties and there are two general methods (a) by difference, in which the alcohol soluble protein and the salt soluble protein are deducted from the total protein, the residue being glutenin, or (b) by dispersion in acid (or alkali) and precipitation by alkali (or acid).

Leucosin, the water soluble protein of wheat, is of very minor importance as it constitutes only o:3 per cent. to 0.4 per cent. of the total protein in wheat and occurs mainly in wheat germ which is removed in the milling process. It is soluble in dilute saline solutions and relatively insoluble in aqueous alcohol. Wheat globulin occurs to the extent of about 0. 6 per cent. in wheat and like leucosin is more abundant in the

embryo than in the endosperm. It is relatively insoluble in water but freely soluble in dilute salt solutions. From these properties it follows that the proteins of the gluten obtained by washing a flour dough with water consist almost entirely of gliadin and glutenin.

GLUTEN.

Isolation.-Gluten was first isolated from wheat flour by Beccari in 1728 and in 1745 he published a description of the method of separating gluten from flour by washing out the non-gluten material of a dough with water. That the quantity of gluten obtail;-e.d varies di:ectly with the of ?rude protein in the was first

by Millon (1854) and a high positive correlatiOn between these two estimatiOns was shown by Zmn (1923). This has been repeatedly confirmed. Properties.-Gluten is a yellowish or greyi.sh rubbery mass of ductility . These properties,

together with its softness or harshness and the ease or otherwise ?f w?rkmg It mto .a thm are

an indication of the quality of the gluten. The ratiO of wet to dry gluten, I.e., Its water-holdmg capacity, has been suggested as a measure of its quality. Both this and the amount o! gluten obtained vary with the of. .wash water used and

various standard solutiOns for gluten washmg have been proposed to overcome this vanabihty. Oomposition.-That crude, dry gluten. contains considerable non-protein material was shown by Macfarlane (1905) and has been repeatedly confirmed. In the of gluten the personal is large. This is shown

by the varying results obtained by different workers usmg the same :flour. The rompositiOn of crude gluten depends on the :flour and water used and also on the experience and technique of the operator. For hand-washed gluten an approximate composition is protein (N x 5. 7) 80 per cent., fat 9 per cent., carbohydrates (mainly starch) 10 per cent., ash 1 per cent. With prolonged hand washing the carbohydrate content of the gluten can be reduced. Using the

"Rotor gluten washing machine" of Berliner and Ruter as modified by themselves, Fisher and Halton (1933) report a gluten of which 87.4 per cent. was protein and 8. 6 per cent. was fat. The agreement between gluten and protein content of flour is .therefore due a of errors,

the protein dispersed in the wash water bemg compensated for by th.e retentiOn. of non-protem material m the It has been suggested that· these errors out when the content IS about 10 per cent., but If It IS

above this value then the gluten content 1s greater than the protem content and at lower values the protem content is the lower, but this does not appear to be well supported. The protein material in gluten consists entirely of two proteins gliadin and glutenin in about equal proportions, which is in practically the same ratiO as they occur m flour.

189

The. and coherence of glute.n and of _ flour doU:gh is ascribed to interaction between the proteins gliadin and glutenm smce cereals not glutenin do not form a coherent gluten. This interaction has been confirmed by the observation that mixtures gliadin and glutenin sols at a pH value intermediate between the isoelectric points of the two proteins do not obey the mixture law.

MALTOSE AND DIASTASE.

Maltose (Cl21122°11) is the sugar (a disaccharide) in t erms of which the reducing sugars in wheat flour are .conventionally reported, since it is the most abundant of the reducing sugars present. 'rhe properties of maltose .connected with baking v alue are it s solubility in water and it s ability to be fe rmented by yeast , acting as a source of carbon dioxide for raising the dough . Although fermentable sugars are present in normal flo urs there is not suffic ient

to support carbon dioxide production during fermentatio n and proofi ng and t herefore adequate gas production depends .on the production of fermentable sugars h om the st arch by the action ot the enzyme diastase. If t he enzyme maltase is also present the maltose produced by the diastase may be converted into hexose sugars (monosaccharides). In analysis it is usual to est imate reducing sugars and rep ort these as maltose. Flour suspension is allowed to ferment for a standard time under standard conditions, and the reducing sugars estim ated. There is both a maximum and minimum value for t he desirable amount of maltose (the actual values depend on t he t echnique in use). A minimum value is necessary t o produce suffi cient carbon dioxide and above a maximum value undesirable physical properties .appear in the dough, possibly because high proteolytic aqtivity is usually associated with high diastatic activity.

In general, Australian flours are low in diastatic activity but, fortunately, this is easily corrected in the bakehouse. Recent research indicates that the diastatic activit y of flour may be increased in the mill by overgrinding a portion of the flour (one or more of the flour streams of the mill). This is possibly connected with the observation that experimentally milled flours are usually higher in diastatic activity than are commercial flours.

STRENGTH IN FLOUR.

The factors influencing the strength of :flout' are numerous and imperfectly understood. It is accep_ted that there should be both quality and quantity of protein present. Quantity is easily measured by the nitrogen determination .or the gluten test. The former has the advantage of accuracy and reproducibility and the latter the advantage that some idea may be gained of the physical properties of the gluten. Numerous tests for quality have been suggested,

both physical and chemical, but none have superseded the baking test which measures both quantity and quality. One physical test, as yet not published or fully investigated, which may be o£ value is the measurement of the elasticity .and plasticity of a cylinder of dough and the relation between these two properties.

The factors affecting quality are discussed in Appendix F in the Second .Report of the Royal Commission on the Wheat, Flour and Bread Industries, page 129, F8, but some attention should also be directed to-the easy handli:ng .and working of the dough in the bakehouse as a desirable factor in quality, distinct from the usual definition of quality .as " the ability to produce large, well-piled leaves " as the ease of production of these loaves is a significant factor.

The baking quality of :flour may also be influenced by the milling procedure, and t'eference has already been made to the possibility of increasing the diastatic activit y by over-grinding. The p-ercentage extraction also influences the .quality of the flour for it has been shown that the protein content of wheat increases from the centre of the grain outwards. Thus a patent flour has a lower protein content than a straight :flour from t he same wheat. In this it may be mentioned that the buffer value of flour also increases with decreasing grade. Thus the ·same

production of acid during fermentation will lower the pH value of a straight flour less t han t hat of a patent flour and though Jessen Hansen's (1911) conclusion that the best loaf is produced at pH5 is now somewhat discredited, it still appears that the lowering of the normal pH value of a flour (about ·pH6) is advantageous. Moreover, a reduction in pH value tends to prevent the growth of the " rope " organism (B. mesentericus).

C. H. B ailey, 1925 ..

D. W. Kent-Jones, 1927 . E. A. l!'isher, 1935 ..

T. B. Osborne, 1907 .. - . Reccari , 1728 -. Ber.ca.ri, 1745 E. Millon, 1854 J. Zinn, 1923 .. T. Macfarhne, 1905 . . . . E. A. Fisher ·and P. Halton, 1933 R. .Tessen-H ansen, 1911

REFERENCES. . . The Chemistry of Wh eat F lour. . . Modern Cereal Chemist.r y. . . Flour q uality, its natur e and co ntrol. . . T he proteins of the wheat k ernel.

. . Academy of Bo!IJE(na . . . De Fromento.

. . J . Prakt. Chem. 61 344-51. . . J . Agr. Res. 23 . 529-48.

Trans. Roy. Soc. Canada, ser. 2.2. sect. 3. 17-24. . . J. Sor . Chern. I nd. 52. 195T-193T. . . .. rend . trav. lab . Ca rlsberg 10 170-206.

APPENDIX F.l.

1. SUMMARY OF REPORT OF ROYAL COMMISSION ON F OOD PRICE S, GR E AT BRITAI N 1924.-25. The followina is a summary of the report of the British Royal Commission on Food P rices, 1924-25. Products other than bread :flour were investigated . Reference is occasionally made in this summary to the Committee which had been appoin t ed by th e Minister of Agriculture and Fisheries in 1922 t,o examine the sellmg and

distributing costs of cereals, flour and bread.

I MPORTANCE oF BREAD IN NATIONAL F ooD B ILL.

An estimate of a 'Previous Commission (Great Britain and Ireland , 1924) when t he 4- lb. loaf was 9d . was the weekly expenditure on bread and :flour for a family of five varied between 5s. 9d . and 7s., average . of 20 per cent. of total expenditure on food. As 5,000,000 tons of flour are consumed annuall y m Great Bntam and Ireland of which half is for bread, this consumption for bread alone at 9d . pe1 4-lb . loaf represents £80, 000,000. An

of 2d. per loaf, such as recently occurred, increases the nation's bread bill by £20,000,000 a year. The

effect on the family budget is serious. F.403.-11

190

PRICE STRUCTURE OF THE LOAJ'.

The following data are based solely on bakers' returns furnished to the Commission:­ The 4-lb. loaf as at 31st January, 1925.

Producer Handling charges on wheat (loading, unloading, commission, &c.) Transport wheat and flour .. Milling expenses :Milling profits

Baking expenses Cost of sale and delivery Baking profits

Percentage of retail price.

41.25 4.50 9.50 5.50 2.75 16.75 11.75

8.00

100.00%

It was pointed out that the widely varying conditions of manufacture and distribution, and the different operation of bakers and millers, combined to make an analysis of costs inapplicable to any one business.

KINDS OF BREAD AND FLOUR.

·. Quality,, as well as shape, of bread varied largely. Flour also varied in quality. "Straight run" flour was generally used, which was a mixture of all the different grades of flour produced from the same wheat at different stages­ of the one and the same operation. In Scotland and Northern Ireland a square loaf baked in sets with top and bottom crusts only was largely made, the crumb being exposed on four sides when the loaf is separated from the set. Such a loaf could be made only with a high percentage of strong flour mainly produced from American and Canadian wheats.

CoMPETITION BETWEEN SMALL AND LARGE BAKERS.

The trade ranges from the small master baker, who produces only a few hundred loaves a week, to the loaf factory which produces hundreds of thousands. In distribution, the range is from firms which restrict deliveries­ to within a mile from their bakeries to firms which cover 100 miles daily in their delivery. Therefore, there is no one­ unit of production or distribution that could be regarded as the most economic. High distributing charges and allowances to the selling agent discounted the advantages of mass production. Firms working on the factory system could not replace the small baker who was alleged to be responsible for keeping down the price of bread " often below its legitimate value ". .

UNECONOMIC ORGANIZATIONS OF THE TRADE ; RECOMMENDATIONS.

For reasons noted in the _ preceding paragraph there was a considerable waste of energy and expenditure due· to uneconomic organization (having regard to the trade as a whole), and to overlapping of services. Returns from individual bakers and local associations of bakers showed a wide variation in distributing costs. Overlapping in delivery was strongly evident, and the effects of abnormally high distributing charges and of uneconomic organization. must tend to keep up the price of bread to the consumer in districts concerned. While, however, the Commission realized that, with the allocation to particular bakers of exclusive areas of operation and the establishment of bakeries· producing for each area the most economic quantity of bread, a saving could be possible, it recognized, nevertheless,

that such re-organization might not be practicable in present circi.lmstances. The matter was worthy of investigation by the Food Council in consultation with local bakers' associations.

METHODS OF SALE.

Bread is sold wholesale to public institutions usually by contract, and to canteens and retailers, such as grocers and dairymen, at a discount of about 10 per cent. The wholesaler sometimes possesses retail shops, and in these cases an allowance has to be charged to each shop for the cost of distribution. Some wholesalers make bread only, and others also make cakes, biscuits and "small goods". A large number of firms conduct a partly wholesale­ and a partly retail business. They supply the grocer and other retailers at the usual discount, and also sell over their own counters and deliver from door to door as well. The third class of baker sells bread retail only, and he may either confine himself to sales over the counter, or to deliveries to the customer's door, or he may use both methods. In working-class districts the system of selling over the counter for cash largely prevails. In Scotland the wholesale baking trade has developed mo-re than in England and Wales, and the wholesaler sells to the retailer, who in the main sells over the counter, but may deiiver occasionally. The retailer's margin of profit-is usually less than the margin which the London wholesalers allow, being in most cases fd. per 4-lb. loaf. The trade in Northern Ireland is very largely a wholesale one similar to the &ottish trade, and the allowance to retailers is also as a rule £d. per 4-lb. loaf. Some wholesale factories distribute to grocers over the whole of the six counties, covering a radius of 100 miles. In the towns, however, bread is usually sold by delivery from door to door, a system which the trade considers to be unavoidable. An unusual feature of the trade in Northern Ireland is that a discount of 5 per cent. is allowed to

RECOMMENDATION AS TO DIFFERENTIAL PRICES FOR B READ SoLD OvER THE CouNTER AND BREAD DELIVERED.

In connexion with the distribution of bread it was thought that the baking trade might usefully co-operate to enable the public to receive a cheaper loaf. While recognizing that the trade was entitled to make a fair charge for the extra cost of delivery, the person who obtained the bread from a shop was entitled to a lower price. Therefore, the Food Council might usefully consider whether it would not be an advantage to the consumer to provide for compulsory differentiation in price.

PRICE VARIATIONS IN DIFFERENT DISTRICTS.

The range of the 4-lb. loaf was from 7ld. to 10d. The difference in price was more noticeable as between district and district than in any one district. In Liverpool, for instance, the predominant price was 5d. per 2-lb. loaf, and in Southport 6d. The observation is made " the quality of bread is a matter of greater moment the P.oorer consumer, with whom it is a staple article of diet, than to the more well-to-do consumer, who has a wider chmce of foodstuffs ".

191

PRICE-FIXING AssociATIONs.

In 13 out of 21 towns investjgated, it was found that a uniform price was in operation, and this was reported. to to the fixing of by the local Association of bakers. A witness representing the Incorporated

SoCiety of PrmCipal aJ?-d confrrmed the existence in his section of the trade of a price-fixing

under whwh an ID:timatwn 1s given both to the Press and to the members of the Society that a rise or

fall m prwe was due. He demed that the arrangement constituted a " ring,, and stated that individual members. were free to sell bread at a price less than one " showing a reasonable profit to the t rade generally ". ATTITUDE OF Co-OPERATIVE S ociETIES To P RICE -FI XI NG.

from such societies stated that they were frequently appro ached by master bakers with suggestions

that the pnce of bread should be raised. It appeared to be the case that Co -operative Societies very often kept the price of bread down to the benefit not only of their own members but also of their ri vals' customers.

RECOMMENDATIONS AS TO PRICE-FIXING BY THE TRADE.

The practice possesses certain obvious disadvantages to t he public. It is admitted that prices tend to fluctuate about the point at which there is no profit, but t he tendency would be for ptices to be fixed at a level which would give the efficient producer a living, and, incidentally perhaps, the most efficient producer very substantial profits. The CommiSSion was of opinion that the system required close investigation and continuous supervision by a nermanent .and impartial body, and that these duties should be placed upon the Food Council. j

MILLERS CEASE TO SUPPLY FLOUR TO CHEAP BAKERS.

The case of Messrs. Harding & Sons, a firm of bakers which reduced the price of the '1-lb. loaf one penny below the ruling local price, is dealt with. The bakers used their influence with the millers and flour supplies were withheld from this fum. The Commission caused an examination to be made of the firm's books and found that, lika most bakers, it was using flour bought under a contract at a price considerably below replacement cost, and their true profits

were surprisingly high. The Commission concurred in the censure of the millers expressed by the Linlithgow Committee on these" coercive and dictatorial methods which are not only reprehensible in themselves, but are detrimental to the public interest ". THE NATIONAL SALE NOTE CLAUSE.

The National Sale Note is the recognized form of contract for the supply of fio•lz by millers to bakers. The National Association of Master Bakers approached the National Association of Millers :;o secure the insertion of a clause in the agreement giving the right to a miller to cancel a cont"act if his buyer sold bread at a price showing less than a certain gross profit. The millers apparently did not agree to this course. Tile Commission remarked " we consider that bakers should not be aHowed to place their own interests so decidedly before those of the general publir ". No clause so restrictive of trade should be permitted to be inserted in contracts relating to the supply of foodstuffs.

II. COST OF BREAD PRODUCTION AND DISTRIBUTION. INFORMATION OBTAINED.

Comment is made on the divergences of the estimates of cost, due to the varying sets of conditions. Returns were obtained from 70 bakers. YIELD OF BREAD FROM A SACK OF FLOUR.

Witnesses before the Linlithgow Committee stated that 92 4-lb. loaves were obtained from a 280-lb. sack of flour. The majority of co-operative societies assessed the yield at between 93 and 95 loaves, and Scottish and Irish wholesale bakers estimate the production at from 92 to 97 loaves. Various institutions estimated the production at from 94 to 95! loaves. The National Bakery School, London, stated the figures at 93 or more. A special test was made for the Commission at Aldershot with a typical straight run flour of average strength. The dough was scaled at 4 lb. 2! oz., and an average yield of 95 loaves was obtained. In a hand bakery at Shorncliffe better results were obtained varying between 94 and 96 loaves. The Commission considered that 93 or more 4 lb. loaves should be obtained from a sack of flour of 280 lb. (N.B.-This is equivalent to 99.6 2-lb. loaves from a 150-lb. sack.)

CosTs OF INGREDIENTS.

Apart from flour, which is considered at a later stage, the used are yeast, yeast foods, rice cones, salt, and grease for greasing tins. In some cases milk powder, lard and oil are used, but these are for special bread. The Commission thought that the figure of 3s. qd. per sack of flour for materials other than flour was not unreasonable. LABOUR CosT OF PRODUCTION.

The range varied between 3s. llid. to l Os. per sack, the average over all being 6s. O!d. or I!d. less than the Association's figures. OTHER P RO DUCTION C osTs .

These comprise rent and rates, fuel, light and power, depreciation and repairs to bakery. On all the information beforeit the Commission estimated all other costs than wages as being " in the neighbourhood of 3s . 9d ." per sack. CosT oF D ISTRIBUTI ON.

Figures supplied ranged between 2s. 7£d . and 16s. 4lcl. per sack. ,The cost o£ varied _from baker to baker more than the cost of production. The returns fo r the montn of J an uary, which were exammed by the Commission, indicated an average expenditure of 9s . 6d . per sack. CosTs oF WHOLESALE B AKERS.

The previous apply whose business is ret ail or As reg ards bakers

sixteen returns were exammed. It Is pomted out that , although large fi rms ot th1s kmcl were no doub v m a better position to economize in the purchase of flour, and also had considerab ly lo wer costs of distribution, these sayjngs appeared to be offset by the allowance made to the retailer, which ranged fro m 5s. to 6s. 6d. per sack in London, and in some other towns from 7s. 6d. to 7s. 9!d. per sack.

CoNcLusiONS AS To CosTs.

"Our general conclusions in regard to the .costs incun:ed in t?e and sale of bread (ap.art. from the cost of flour which is dealt with below) are, that m order to give a fau estimate 01 average co sts, as eXIst m present circumstances, the figures supplied by the National Association of Master Bakers need to be modified because they

1.92

minimize output and in certain respects magnify costs. We feel that there is a too general readiness on the part of the trade to accept as for the purpose of our inquiry the conventional output figure of 92 4-lb. loaves per sack of fl.ou!, and consider that an average 93 to 94 lo.aves per. sack is T an estimate. If a figure

of 93.0 loaves IS taken for output and a reductiOn of ls. 3d. IS made m the Natwnal AssoCiatiOn's figures of costs of manufacture and sale, for the reasons we have given, there is an of the average net profit per sack as returned by the Association from ls. 7!d. to about 4s. per sack, a figure which appears to us to be more consonant with the facts."

CosT OF FLoUR.

" In the above calculation flour has been taken at replacement cost. This is in accordance with a common trade practice, and in ordinary circumstances, when pric es are stable over long periods, it is not open to objection. But it is clear that when flour prices are rising (flour being by far the most important ingredient; of the loaf) the presentation of castings in this way conveys an erroneous impression of the actual :financial results of the trade. Every baker ·in common with e very other producer, wishes to purchase his stock of raw material as cheaply as possible. When the

price of flour is rising the tendency is for flour purchases by bakers to be made as far ahead as possible. 1.;v e have been inf?rmed in evidence that bakers frequently purchase from one to three months' supply in normal circumstances, and at times up to four or :five months' supply when the market , appears to render this course advisable. Indeed, we have had evidence that bakers who are convinced that the market will continue to rise, buy as far ahead as six months. When the price of flour seems likely to fall the baker refrains from buying if he has sufficient stock, or buys only to cover his immediate needs, in some cases lowe1ing the quality of his mixture in order to maintain his margin of profit. Thus it seldom happens that a fall in the price of flour leaves the baker with large stocks of flour which he has purchased at high p1ices. I t is apparent, therefore, that a statement of costs in which flour appears at replacement cost will very probably have the effect of minimizing the baker's profits on a risi ng market, and we consider this to be the explanation of the fact that in a number of specimen accounts submitted to us by various trade witnesses the baker appears to be making either a loss or a very small profit. It would be unreasonable to expect the baker to pass on to the consumer the whole benefit of forward purchases of :flour on a rjsing market, and if he did there would be an even wider ral):ge in bread prices than is found to exist at present. But the consumer has a right to expec.t that·the prire of bread shall not be maintained at a high level during the period when the cost of the raw is declining, and, in fact, the force of competjtion does in such circumstances compel bakers to reduce their prices while many of them may be still working on stocks of flour purchased at comparatively high figures. On balance, however, the advantage, as we have shown, rests with the baker, who may be making quite a substantial profit when his costings accounts show him to be suffering a loss."

III. BAKERS' PROFITS. RETURNS OBTAINED FROM THE TRADE • .

The problem was complicated by the difficulty of excluding cakes, pastry, and " smalls " from -the baking of bread. In the returns furnished btead was not separated from other goods. Only 40 trading accounts of retail bakers were sent in, while sixteen returns were received from Co-operative Societies, and six from wholesale bakers. Certain particulars are given, and other data are presented in tabular form, as to average profits and expenses for the years 1923-24 and 1924-25. Differentiation is made between businesses over £300 per week and those under £300 per week. No returns showed a loss on the year's working, and only five returns showed a net profit (including

owners or directors' remuneration and interest on capital) of less than 4 per cent. on turnover; the highest rate of net profit was 21 . 2 per cent. on turnover of about £60 per week, the annual net being £648. The Commission concluded that on the average the largest retail bakers made a net profit of froll_l 7 per cent. to 10 per cent. upon their sales, and many of them made more. In the case of small concerns in which the labour of the baker (and in some cases that of his family) was an important factor, the total net profit accruing from the manufacture and sale of bread and confectionery must represent a. substantially larger proportion to the total turnover. Retail . profits were too high on the general average.

ABOLITION OF NIGHT BAKING.

The Commission expressed the opinion t hat the abolition of night baking, providing that new bread was supplied to consumers at the same hom·s in the morning at which it was at present available, would increase tbe cost of the loaf. In the event of the general abolition of night baking, the increased cost would not exceed a -!d. on the quartern (4 lb.) loaf.

APPENDIX F.2.

SUMMARY OF AN INVESTIGATION INTO AN ALLEGED COMBINE IN THE BREAD BAKING INDUSTRY IN CANADA, 5Trr FEBRUARY, 1931. A preliminary inquiry under the Combines Investigation Act has been made with the obj ec t of securing information concerning the course of bread prices in Canada and their relation to prices of wheat and flour, and of

ascertaining whether combination within the industry has been responsible for enhancing or keeping up the price of bread in the Dominion to t he detriment of the public. Two factors are largely resp onsible for the keen public interest during recent months jn the price of bread ; one, the spectacular drop in the price of wheat in 1929 and 1930; the ot?er, the existing industrial depression. In 1929, Winnipeg wheat prices advanced sharply from a monthly average m June of $1.18 per bushel to a monthly average in July of $1 . 60. Between July, 1929 and December, 1930, the price of wheat dropped from $1.60 to 56 cents per bushel. Bread prices did not come down proportionately in the early months of 1930, but by December,

1930, they came to bear the same relationshi.p to wheat pri:es as in January, 1929. In 1929, wheat from $1.18 in June to $1.60 in July. A proportional advance m bread would been from 7 cents m June to 8. 3 cents in July. The actual total advance in bTead :w-as to 8 cents, and that pnce was reached m October, 1929. There was a lag in bread prices going up. As mi.ght be expected when wheat st arted down th.ere an even greater

partly explained by the slowness. of flour pnces to recede, partly by th.e human tendency m .busmess to pnce reductions until they are unavOidable. In September, 1930, the pr1ce of bread had declined to 7.4 cents; m the subsequent three months the reductions were greater than the t:velve. The impetus to the

in bread prices at this stage comes from many quarters : reductiOns m wheat and flour, protests agamst alleged high bread prices, the widespread newspaper publicity given to these protests, and the cham store and other price competition.

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. . In the period 1?25-30 bread prices were considerably out of line with prices in 1913, and more out of hne m 1930 than m 1925. L1ttle protest was made until1930, partly because the increase in the spread between 1925 a!!d 1930 was and. because times were good.

. The mam lme of. cnt1msm of present day prices of bread usually points to the low prices of pre-war days as evidence the present pnces are unduly high. The salient points in the comparison are these :-

- Wheat. Flour. Bread.

Per bushel. Per barrel. Per pound.

Yearly Average- Cents. $ Cents.

1913

,

88 4.87 4.2 .. . . . . . . . .

1930 .. . . . . . . .. 94 6.41 7.5

December 1930 . . .. . . 56 4.76 6.6

These .figures indicate that while both wheat and flour prices were lower at the end of 1930 than in 1913, bread prices were on a substantially higher level. The higher level of wholesale and retail prices generally is partly for the discrepancy between 1913 and 1930 .

. A comparison bread prices with other retail and wholesale prices shows that bread prices have not declined as rapidly as others smce 1930, when aU three reached their highest level; but it shows that other price levels are still high compared with 1913. Taking 1913 prices as equal to 100 the record shows:-PRICB INDEXES CAN.A.DA,

- Bread Prices. All Food Pricea Retall. Retall Prices, Fuel and Light, Wholesale !'rices.

1913 .. . . . . 100 100 100 100 100

1920, December .. .. 212 202 190 200 217

1929, December . . .. 188 161 160 - 157 150

1930, December . . .. 157 140 148 156 122

Apart from this change in the general price level the main line of explanation of the divergence between 1913 and 1930 bread prices is to be found in factors other than wheat and flour. The fact that something other than flour is responsible for most of ithe increase is shown by a statement of the spread between the wholesale cost of flour used in making a pound of bread and the retail price of bread; in 1913 the spread was 2.3 cents; in 1930 it was 5.1 cents.

The term "spread" does not mean "net profits". It represents the difference between the baker's cost of flour and the retail selling price of his bread and therefore includes all such necessary costs as other ingredients, baking, deiivery and sale, administration expenses, as well as net profits. Between January, 1925, and June; 1930, while wheat and flour prices fluctuated freely, bread prices were maintained at a high level which was generally unchanged. The interval between these dates constitutes a period in which occurred the most striking development of the bread industry in recent years, namely, the acquisition of a large measure of control in the bread making industry by a few flour milling companies.

ANALYSIS OF SAMPLES OF CANADIAN BREAD.

In addition to securing formulae from bakers throughout the Dominion, a chemical analysis of seventeen samples of bread wasmade under the direction of the Dominion Analyst. The comment of the Analyst on these samples was that they did not show a great deal of difference in their nutritive value and that all were palatable. Of the seventeen samples analysed, nine weighed less than 24 oz; the seven cent loaf was the highest in weight while one of the twelve cent loaves was the lowest. As for nutritive value measured in calories, the lowest price loaf exceeded that of some of the highest price loaves. Using the percentage of fat as a criterion, the seven cent loaf is just below the middle; one twelve cent loaf is second from the top and one is fourth from the bottom. From this it is evident that high price is not a guarantee either of high nutritive value in terms of calories per pound, or a high percentage of fats in the loaf.

BREAD CosTs IN CANADA.

Over 450 bakeries representing all the provinces of the Dominion were requested to furnish detailed information showing their costs for 1929 and the first half of 1930. In all 293 returns were received but of these the costs of only 119 have been found to be recorded in such a manner as to permit their inclusion on a comparable basis in a general statement of bread costs for these periods. The average cost of making and selling bread, based on the returns from the 119 bakeries, appear in the following

AvERAGE CosT PER PouND OF BREAD, CANADA.

1929 .

1930

- . (first six months).

Cents. Cents.

Flour . . . . . . . . . . .. 2.43 2.56

Other ingredients . . . . . . . . .. 0.76 0.74

Baking costs . . . . . . . . . . . . 1.17 1.19

Delivery and sale . . . . . . . . .. 1.65 1.66

Administration . . . . . . .. 0.77 0.80 . .

Total costs . . . . . . . . 6.78 6.95

It is to be noted that these costs are averages; of the 119 bakeries, three reported of cents per pound .and upwards and five reported costs under five cents. The great majority come between s1x and eight cents.

;F.403.-12

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CosT oF OTHER INGREDIENTS.

One reason fo: the importance of flour in modern is that nowadays less flour goes into a

baroh of bread than m the earher penod, less flour but more of other mgredients such as sugar and milk.

BAKING COSTS.

Included in this item are three subdivisions and the amounts chargeable to each are :-Wages 0. 70 cents per pound of bread.

Wrappers and wrapping 0 . 16 , , , ,

Other baking costs 0 . 31 , , , ,

Total 1.17

. Since the average includes accounts from some bakers who do not wrap bread at all and others who wrap but little, it should not be taken as indicating the wrapping cost to the baker.

D ELIVE RY AND S ALE CosTs.

The outstanding development in t he cost end of the bread-baking industry in rec ent years has been the rise in selling expenses. The average of 1. 66 cents per pound in 1930 means that the Canadian consumer, buying a pound and a half loaf for say ten cents paid t wo and a half cents to cover the baker's sale and delivery expenses. One explanation of the exceptionally high distribution cost s of the larger bakeries appears to be in their use of high pressure sales methods. They have a productive capacity which in most instances is greater than their market. It is not competition in price which charac terizes the efforts of the larger bakeries to secure business. Price competition

would be effective in keeping costs down ; but the competition in quality and senrice and in sales promotion which has been substituted has just the opposite effect of tending to increase costs and therefore to enhance prices and keep them up. . All the arts of modern salesmanship have been put to use- ext ensive and expensive advertising campaigns, special delivery services, credit, feature breads of fancy shapes or fancy ingredients-all designed to secure volume. Sales effort to secure volume has its economic justification when increased volume makes possible lower costs and lower prices.

One of the bigger items in modern sales costs in Canada is represented by wages and commissions to delivery men, or salesmen as they are now usually designated. The change of designation from delivery men to salesmen is significant. Years ago the practice was to pay a weekly wage to a driver whose duty it was to deliver bread. Summary of delivery and sale costs are :-

Wages and commissions Other delivery costs Advertising Other selling costs

Total

OVERHEAD COSTS.

Per lb. Bread. cents. 1.02 0.50

0 .10 0.03

1.65

The charges for administration and other overhead expenses are divided as follows :-

1929 Management and office expenses Bond or other interest paid .. Other fixed charges including depreciation, taxes, &c.

Per lb. Bread. cents. 0.38 0.07

0.32

0.77

The average of payments made to all employees (exclusive of office staff) total l. 72 cents. per pound of bread and the total costs are 6 . 78 cents, the one approximately a quarter of the other. But an analysis of the 1 . 72 cents shows that only . 70 cents goes to the men who do t he baking and of the rest, 1 .02 cents, a very considerable part is in payment of sales services as distinct fro m delivery ser vices. It is not a high weekly wage that raises t he distribution cost per pound of bread; it is t he excessive duplication of bakery routes and t he requirement that the man who delivers the bread shall spend a large portion of his time selling other things that are more difficult to sell and canvassing for new customers for his firm.

CoMBINATION IN THE BREAD B AKING INDUSTRY.

The price of bread is no t, of course, as fl exible as price of eit her flour _or wheat. Neither is the area as wide as in the case of flour and wheat. As a pen shable bulky commodity, bread must be marketed withm a comparitively short distance ·from the bakery as well as withi n a short time after its pro.duction. Even improvement of roads and the use of trucks widened the n;tarketmg area of producmg plants, the range IS still limited to a fairly restricted territory. Comp etitiOn therefore until.recent years. has been a of more or I.ess local concern. Where prices were low it was presumably because of pnce The ba.kers m each locahty. were seldo m subject to outside control or influence. It is only recently a new srtuatwn has an sen w,hereby the decisions on local prices are not necessarily made locally.. If decisiO ns are by local groups the{' are to prior influence or sub sequent review on the part of m some large cent re. This new mter-Cit y

relationship has come with the advent of the large cham baken es, nearly all of them controlled by one or other of the large flour milling companies. . . . . . .

Some idea of the part the mill -c ontrolled bakeries are takmg m the manufacture of bread m the Dommwn IS given by their total output compared with the estimated consumption of bakers' bread in Canada. On this .b asis 38 per cent. of the bread sold in Canada in 1929 was produced by 76 mrll bakenes. As, howev.er, these bakeries have plants in only 54 communities, t heir output should be measured, not agamst the total productron of bakers' bread for

19o

the Dominion, but against the market for bread of these particular places, making due ailowance for out of town trade. The production for the 54 cities and to·wns represents 93! per cent. of the entire business of the communities in which they operate. The total capacity of 72 of their plants is 892,679,000 pounds a year or nearly treble their output or over 50,000,000 pounds in expess of the 1929 total bread sales reported for the whole Dominion. One effect of this factor of surplus capacity which has a bearing on the present inquiry is that it keeps before the management the constant

necessity of increasing sales and thereby leads to the aggressive sales policies which add so considerably to cost and benefit the general public so little. Most of this expensive sales effort is designed not so much to increase the consumption of bread as to persuade customers of rival concerns to change bakers.

THE CHAIN STORE.

The same tendency toward centralization of industry which is seen in the consolidation of bakeries and their control by flour milling companies is to be observed also in the entrance of the chain store into the bakery business. On the one hand we have flour mills reaching forw ard into bread manufacture and distribution; on the other we have the chain store, primarily a retail distributing organization reaching back into manufacture, the two meeting on the common competitive ground of the bread-baking industry. The price competition which they have introduced durino 1929 and 1930 bas created a serious problem for the larger bakeries. b

CoNCLUSION.

The inquiry disclosed that higher prices have been due not so much to combination as to the costly form of competition in quality service and sa lesmanship. The bakers have become engrossed in a competition which has led them into adding more and more of the expensive ingredients to attract business, into more elaborate delivery and other services, into selling campaigns which have for their chief object persuading potential customers to " change

bakers", a service for which consumers of bread in the end have t o pay. Chain store competition supplemented by the competition of smaller io w cos t bakeries all over the country has made itself felt. The small capital required to operate bakeries and the short time wi thin which they can be brought into operation is a public safeguard of some importance. There is also the corrective influence of the existence of the smaller flour mills and the addit ional possibility of bread beiJJ g baked at home in the event of bakers' prices going beyond what are considered reasonable limits. Apparently the sit uatio n has been taking care of itself and can continue

to take care of itself so long as these factors, actual and potential, remain in existence. If they continue to be as effective as they have been the public as well as the industry will be better off, having such problems solved without the necessity of governmental intervention.

APPENDIX F.3.

THE BAKING INDUSTRY IN CANADA.

(Taken from tr.e Report of the Canadian Royal. Commission on P1·ice Spreads 1935.) THE BAKING INDUSTRY.

(a) The Relation between the Milling and Baking Industries.

Until the end of the War, the baking industry was one of small independent establishments, with small capital operating locally, and on the whole a stable, moderately profitable enterprise. After the War the small baker encountered serious difficulties. It is not intended to imply that the local, independent bakery disappeared during this period. Many of the smaller independents had retired from, or been forced out of operation, but the bulk of the baking business (between one-half to two-thirds) continued in t he bands of the independents o£ moderate and large size. There

has always been a fairly high mortality among small bakeries, as in ali small businesses. The depression bas, to some extent restored the small independent baker, i1.lthough his condit ion is frequently desperate. Hard times brought the establishment of numerous small shop s opened by bakers who were unable to obtain employment with established companies. were frequently very crude and labour costs were cut to a mere

subsistence for the owner-operator. The quant1ty of bread produced by any one of these would be small and their combined output in any locality moderate, but the sale of bread at the lo w prices necessary to disp ose of their product forced the larger plants to keep their prices low to prevent an increase in the number of such establishments. The milling industry today controls a majority of the large baking companies of the country and has a financial

interest in a substantial number of other bakeries. The mill-controlled bakeries alone supply approximately one-third of the domestic demand for baker's bread. Bakeries absorb approximately one-third of the domestic fiour production and the existence of these inter-relationships between mills and bakeries results in the removal from the competitive flour market of a substantial demand for flour.

It bas been suggested to us .that the existing unl?r?fita.b le condition of baking industry iB be attributed to this relationship because of the mducement to the m1llmg mdustry to expann flour sales by expandmg bread sales of controlled bakeries. It is difficult to confirm or disprove this, especially as the development of chain-store bakeries (as distinct from

bakery chains) amid the general confusion of the the of and . effect well-nigh

impossible. On the whole, however, we that n;tlll-control has oeen a .complicatmg and factor. The existing high cost of selling and delivery IS also attnbuted to the competitiOn engendered by the null-controlled bakery consolidations. (b) Mill-Controlled Bakeries.

The largest chain bakery operating i.n Canada, the Canada Limited, :vas organized in

1911. Until 1925, however, bakery chams were not an Important factor m the mdustry .. Smce that year a number have come into existence, most of them controlled by one or other of the big rrullmg comparues. The Lake of the Woods Company operates, through its subsidiaries, the Inter-City Baking Company and the Inter-City Western Bakeries, and their subsidiaries, some eighteen companies with plants in fourteen cities, fro m Quebec

west. The Maple Leaf Milling Company, through its the_ Bread Company, Canadian Bak.er.ies

Limited, and Eastern Bakeries Limited, operate some 38 ?akenes m 33 01t1es across Canada and also controls Dorrumon Bakeries, the plants of which are leased to other comparues.

196

Mills co.ntrols, through its the Consolidated Bakeries, the Northern Bakeries, the

McGavm vompames, the NatiOnal System of Bakmg, and three others, some 40 companies operating in 27 cities. Western F.lour Mills controls, throu.gh the Purity Companies, the General Baking Company the Brusons Compames, and eight others, some 25 bakenes ope1ating in eighteen cities. , '

The is development. In 1929, a Toronto chain store set up its own bakery and

that store has smce kept Its pnces o.ne to two cents per loaf lower than other bakeries. It also brought out a grade two bread at a substantially _lower pnce. In t.he first two years of operation this bakery made substantial profits both on bread and cake. In 1932 It lost rather heavily on bread but made up the losses on cake. In 1933 it had a net loss on both.

In 1929 also, a Montreal bakery commenced operations, producing one grade of bread to sell at ten cents, o: three preva1lmg pnces. When other bakeries met this competition with grade 2 bread at ten cents the. cha.m Its to 8! cents. There followed a period of competitive price cutting in which the chain store mamtamed Its pnce positiOn.

Second .grade is,. in a form of price cutting, for examination of costs of production reveal that

although the drfference m retail pnce IS rrom one to two cents a loaf, the difference in cost is not over one-half cent. . It may be said in defence of the cutting of bread prices by chain stores that they can afford to sell t wo or three ce:J?-ts per loaf below the price delivered from the bakery wagon. Cost of delivery and selling appear to be in the of th:ee cents per and are, course, not incur:ed by the chain store. It is true that bread may be

delivered together w1th other grocenes, but the mcreased total delivery costs of the store are probably not appreciably increased by such delivery and a great deal of bread is sold over the counter. The use of bread as a loss leader, and its sale below cost of production by a retail store in order to attract customers is, howe:rer, unfair, and if it were a com!llon practice be a serious menace to the bakery business, as the baker, producmg only one type of product, IS not able to attract customers by the same methods. His chief product is bread, and he has not a sufficient variety of other products on which a profit might be made to compensate for losses made on bread. ·

A distinction has been made between the sale of bread at retail stores, and particularly chain stores, below the price dellvered from the wagon, which appears reasonable in view of the costs of deli very and selling, and bread used as a loss leader. The former, in the opinion of the Commission, is legitimate business practice; the latter, if it should become general, will require some form of public regulation.

(c) Surplus Capacity in the Baking Industry.

Surplus capacity is unfortunately as characteristic of the baking as of the milling industry. Information is not available to indicate when the condition first came into being. The Report of the Registrar of Combines into the Baking Industry, 1931, shows that a large surplus capacity existed in 1929. The nature of the baking industry makes it impossible to secure such statistics of production and capacity as were obtained for the milling industry, but as a result

of certain investigations we conducted some estimates have been derived which it is believed reflect the actual situation reasonably well. The estimates below refer to the year 1931, as t4is is the latest period for which the Dominion Bureau of Statistics has been able to provide complete reports. No material change has occurred up to 1933, except that the capacity of mill-controlled bakeries has been reduced by approximately 20 million pounds per annum, by the transfer of some of those bakeries back to private control and the disposal of plants by one of the mill-controlled chains. At the same time, total production of mill-controlled bakeries showed a decline of 36 million pounds, half of which might be attributed to the same circumstances.

The total capacity for 92 mill-controlled bakeries' in 1931 was estimated at 1,144 million pounds per annum. The bread actually produced by these plants, however, amounted to only 305 million pounds or 27 per cent. of the actual capacity. The total production of bakers' bread in Canada for that year amounted to 943 million pounds. If it is assumed that the ratio of capacity to production of the mill-controlled bakeries holds for the independents and chain store bakeries, the total capacity of all bakery plants in Canada must be approximately 3,000 million pounds or between three and four times the production. This estimate is probably high and may be taken as the maximum. The method of computation has been questioned on the grounds that it is computed on the basis of 24 hours per day for 304 days per annum, and that the actual capacity of any bakery must be in excess of in, to cope with

the bread requirements of long week-ends. On the other hand, some bakenes have stated that aespite the fact that their plants are actually operating 24 hours a day throughout the week they find themselves able to meet requirements of a long week-end by forcing plant, at risk of a breakd?wn. As furnished. by the mill-con.trolled

bakeries, the estimate of "practwal" capacity of all plants IS that gi:ren above. This may

be taken as the minimum and it may be concluded that the capacity of all bakenes m Canada Is not less than 1,500 million pounds annually. The production of bakers' bread in Canada declined sli¥htly from 1930 level. Figures are available for the whole of Canada, but for Montreal and OntariO and the "'"estern provmces there was a steady declme from 256

million pounds in 1930 to 203 million pounds in 1933 in plants. It is to tell.how much of

decline is due to the transference of trade to other bakenes and how much to home bakmg; possibly about half IS accounted for by an increase in home baking during the depression, was a of. 16 per cent. mill­

controlled plants in 1932 from the 1930 Whereas all Canada the m the same penod was

only 5.5 per cent. The evidence ·and statisti.cs, although mcomplete mdiCate that substantial of the decrease in mill-controlled bakery production in OntariO and Montreal was secured by the store bakenes 1931, but was lost by them during the year. It probable that 1933 a substantial volume of busmess had passed

from the mill-controlled and cham store bakenes mto.the hands of mdependents. From the information available it is impossible to determine the relative importance of the jnfluence exerted on the baking industry by the various already namely, surplus capacjty,. the introduction of chain bakeries, the reappearance of small bakeries and the combmed effect of these possibly

other factors, dming the past four years, resulted m pnce reduct1?ns, mamly m the lowe: grades of bread, exceeded the savings that had been effected in cost thro_ugh wage reductiOns other economies, and eventually m the sale of bread below rost in many centres, both by cham store and other bakeries.

(d) Competition in the Baking Industry.

In addition to over-capacity the difficulties encountered by the baking industry appear to have resulted from "unfair" competition and may be summarized as follows:- ·

(1) The payment of low wages by certain bakers. (2) The use of unsanitary premises and equipment by certain bakers. (3) The sale of bakery products below actual cost. made to :us contemplated the licensing of all.bakers, the fixing of selling prices, the prohibition

of the use of premmms, &c. It will be observed, however, that practiCally al1 of these proposals are designed to insure a greater protection for the bakers' investment with no additional protection to the consumer. The period of intense competition, which app:;trently commenced about 1930, resulted in the production and sale of low grades of bread at prices considerably less than those of the first grade bread (although, in generai, the difference in cost and quality between the various grades was relatively small), and an entirely wrong idea of the worth of bread

was established in the public mind. At present there is no uniformity in the quality of different breads on the market and, except for trade names, the purchaser has no means of distinguishing between them. We have, therefore, included in our recommendations for consumer protection in Chapter VIII. that consumer standards be provided for bread as soon as possible.

The surplus capacity of the baking industry was not created in response to a public demand, nor can it be held to have been developed to provide for future increased demand which might result from increased population. The construction or expansion of a bakery is a matter of months, not years, and may be allowed to accompany rather than precede demand. The real reason for the creation of surplus capacity was competition amongst the bakers themselves for a relatively fixed amount of bread business. The public should not be required to support a consequent excessive

investment which serves no useful purpose.

(e) Selling and Eelivery Costs of Bread.

The heaviest burden placed on the public is the support of the very great duplication in the delivery systems of bakers. It is a common sight, particularly in the large centres, to see as many as six or even more bakers' wagons on the same street during the course of a few hours. Bread is an everyday necessity and should be avaiiable to the public at the lowest possible cost consistent with quality, reasonable service and a fair return to employees and investors. It

cannot be said that the excessive duplication of bread delivery systems is a reasonable service. In addition to the duplication mentioned; the evidence submitted to us indicates that selling and delivery costs have been burdened in recent years with increasing expenditures represented by the use of premiums, rebates, &c.; the introducing of a morning delivery service; the sale of pies, cakes and buns; all of which had the effect of raising the status of the former driver to that of a salesmen and consequently reducing the size of delivery routes. These

expenditures were apparently incurred as a result of the aggressive competition among bakers for the available business. This condition is very fully and clearly set forth in the McGregor Report, (1) from which the following extract is made :-" One effect of this factor of surplus capacity which has a bearing on the present inquiry is that it keeps before the management the constant necessity of increasing sales, and thereby leads to the aggressive sales policies which add -so considerably to cost and benefit the general public so little. Most of this sales effort is designed not so

much to increase the consumption of bread as to persuade customers of rival concerns to " change bakers." This can hardly be called a social benefit. The big ba-kery cannot be held solely responsible for the system. There is little doubt that the demand of the public, or of some portions · of the public, for the development of such sales methods. This desire for change is capitalized by the shrewd sales manager: new varieties of bread are advertised under

" catchy " names as being made by the latest scientific processes and as containing the last word in nutritive value ; new shapes are turned out, bread ready sliced is introduced and special delivery services added, all in an effort to retain old customers and gain new ones from competitors. This is the kind of expensive rompetition to which we have become accustomed in connexion with such articles as motor cars, radios and washing machines, with their constantly changing models, articles on which sales costs are high because of the time, ability and effort usually needed to complete a sale. There is less to be concerned about when this kind of competition is brough to bear upon non-essentials. But it is not desirable that bread, as one of the most important of the necessities of life, should be brought within this category. It does not require such selling efforts; the consumer does not need to be persuaded to buy bread, and should not be called upon to pay for one baker's efforts to persuade the public to buy from him rather than from a competitor."

Distinguished from other objects of distribution are certain essential staples such as bread, milk, gas, water and electricity, for which there is a continuous and regular demand, the sale of which is normally accomplished without the effort or expense involved in other lines of distribution. It is important that the consumer be protected from exploitation in the sale of these essentials by the maintenance of the price at a minimum consistent with adequate wages, reasonable service and a fair return on invested capital. These essentials are relatively more important to those with small incomes and, where income is very ]ow, a small increase in priee may seriously affect the standard of living and leave no margin for the purchasing of smaJl comforts or luxuries.

(/) Recommendations and Conclusions.

Regulation of wages, labour conditions and sanitary standards of bakeries by public authorities will accomplish a great deal to improve the situation in the industry but the two major problems, surplus capacity and its consequence, excessive selling and delivery costs, will have to be solved before the industry can be regarded as satisfactory from a social point of view. No solution based on production quotas. the high to a return on

the present capital should be tolerated. Under such conditiOns the elimmat10n of competitive selling would be profitable to the bakeries with no retur?. to the . It would be better to the existing situation with the

expectation that sooner or later competitiOn would elimmate a number of the less efficient. One avenue of escape might be found in the fostering of baking as a local industry. It has been argued, and there is much to support the view, that the most unit_ of operation in the baking is the bakery of

moderate size, locally owned and operated. Certamly,. ex12enence shows that a of this t!Pe can economically, and that the gains from large-scale productiOn, if any, are largely offset by mcreased delivery and selling charges. (1) Investigation Into an Alleged Combine In the Bread Baking Industry in Canada. Report of RegiBtrar.

198

Later in this Report we recommend the p-rohibition of price discrimination between customers o£ the same status. This should tend to prevent the practice reported of some large bakeries selling in the outside market at prices below those in the market nearer the bakery. The bakery in the small town would therefore, to this extent, be protected against the unfair competition of his large-scale competitor.

It is clear from the evidence that baking is still a freely competitive industry. We are of the opinion that, aside from the necessary regulation of sanitary and labour conditions, the interests of the public can best be served by maintaining conditions not only of free but also fair competition. If all bakeries were forced to compete on a basis of approximate equality, we feel that the " fly-by-night " and " hole-in-the-wall " .bakery, which has done so much harm in the past few years, would be eliminated, and that also the local bakery would have a fair chance to compete

against the mill-controlled corporation bakeries. Finally, we question the social or economic desirability of :milling corporations controJling and operating bakeries. It has been a disorganizing development in both industries and the sooner the mills divest themselves of their controlled bakeries the better it will be for all concerned.

From another section of this report the following extract is taken :-The Definition of Unfair Trade Practices. Unfair competitive practices take many forms, some of which are now prohibited by law. In respect to those, the difficulty up to the present has been that there has been no administrative agency for the enforcement of such laws, and the prohibition has, therefore, not been effective. A business man is never anxious to proceed against his competitor for the violation of rules of business conduct, even though that violation may have been definitely illegal. We therefore recommend that the Trade and Industry Commission should, in the manner and to the extent previously recommended in connexion with consumer protection, supervise the enforcement of existing laws which prohibit certain business practices.

There are, however, other competitive practices, which while not illegal, may be equally unfair. These take many forms, but the majority of them may be brought under the definition of unfair price discrimination; "unfair" because it operates inequitably as between competitors, because the burden of it is often pushed back ·to the wage­ earner or primary producer, without corresponding benefits to the consumer, and because it deprives society of the benefits of fair and equal competition. Unfair price discrimination, or any other similarly unfair business practice, permits the survival of the powerful, rather than of the efficient. The Federal Trade and Industry Commission should be given the duty and power of prohibiting such unfair trade practices.

We, feel, further, that it would be unwise to attempt to write at present into statute law a rigid definition of what constitutes an unfair practice, with a list of such practices. Such a list, if appropriate at the present time, would probably soon be rendered obsolete byehanging conditions. At the same time we recommend that the Act creating the Trade Commission and giving it power to prohibit unfair competition should establish certain principles for the determination of "unfairness." We recognize that there is a very real danger of confusing the economic, legal, and

ethical implications of "unfairness" and we feel that this danger might be removed to some extent if certain general criteria were laid down in the Act. \Ve suggest that practices should be prohibited as unfair which are characterized by bad faith, fraud, misrepresentation or oppression ; which are resorted to for the purpose of destroying competition, or eliminating a competitor ; which facilitate the development of monopoly ; or which destroy fair competitive opportunity and prevent the survival of those who can organize and carry on the production of goods most efficiently. It is in this sense that the word " unfair " should be used in the Act.

Without attempting to restrict the application of this test of " unfairness " by the Commission, we feel that certain practices which we have examined should-very definitely be considered " unfair " under the Act. They are so widespread and generally condemned that their complete prohibition by the Commission is justified. We refer specifically to-

(1) Discriminatory discounts, rebates and allowances. (2) Territorial price discrimination and predatory price-cutting.

Printed and Published for the GOVERNMENT of the CoMMONWEALTH OF AUSTRALIA by L. F . JoHNS TON, Commonwealt h Government P r inter , Canberra.