Report of the Reorganisation Commission for Milk.
- Great Britain. Agricultural Marketing Reorganisation Commission.
- Date:
- 1933
Licence: Public Domain Mark
Credit: Report of the Reorganisation Commission for Milk. Source: Wellcome Collection.
79/252 page 61
![6] One very noticeable feature about the data which have come before us in regard to retail distributive businesses is the extent to which the profit-margin per gallon varies as between one business and another. Also, in the relatively few cases in which we were able to procure the information, there are very marked differences in the percentage-return which the net profits of the milk retail businesses represent on the capital actually employed in such businesses. In this connexion, we would make the general observation that two businesses of equal size, purchasing milk at the same average price and selling it at the same average price, may well show very different results when measured by the rate of net profit per gallon or by the percentage rates which the respective net profits bear to the capital employed. Such a difference may, in part, be due to one business being more efficiently and economically managed than the other ; but, equally, it may be due to circumstances for which those managing the two businesses are not directly responsible, such as, for example, the relative proximity or density of the population served, and the strength and character of the competition. Our enquiries have led. us to the general conclusion that the larger distributive businesses have made very satisfactory profits. Though, in the majority of these cases, the profits earned could hardly be described as exorbitant, we have calculated that a somewhat higher price—representing an increase of not less than id. per gallon and possibly more—could have been paid to the producer for milk intended for liquid consumption while still leaving the distributive business with a reasonable rate of profit on the capital invested in its undertaking. In certain other cases, however, it was clear that the distributors could have afforded to increase the price paid to the producer to a still greater extent. The variations in expenses, when expressed in pence per gallon, disclosed by the accounts and returns have occupied our attention. We have found that, in the case of large distributors, the cost of pasteurizing and bottling show a considerable measure of uniformity —falling between 2d. and 3d. per gallon—but that the costs of distribution to customers and general overhead expenses vary widely —between 3d. and 73d. per gallon. 47. Costly Services.—It seems to us that the service rendered to the customer by a large proportion of distributors is unnecessarily costly, not because, under existing conditions, the service is carried out inefficiently—which is far from the case—but because of the special demands made by the customer. Such demands include the delivery of milk in half-pint bottles, two deliveries a day, and deliveries at special times. The distributor is compelled to provide these services in order to retain his connexion. Another factor involving increased cost is the existence of a number of retailers operating in the same district, at any rate in](https://iiif.wellcomecollection.org/image/b32177380_0079.jp2/full/800%2C/0/default.jpg)
