The
offer accepted by the three Union producers did secure a z| per cent
increase in price on the 1924 rates similar to the offer which I had
made, but this price is not subject to readjustment in the middle of
the year, as it would have been under my offer, but holds good for the
whole year. An increase in selling prices in London of between 3 and 5
per cent has since taken place. Under the price adjustment I offered, a
corresponding benefit in price would have resulted for the Union
producers after June. This will not take place under the terms actually
accepted from the old Syndicate.
In
addition to that, I offered to replace 85 per cent of my sales, whilst
the old Syndicate were able to secure a contract which obliges them to
replace only 60 per cent. So that neither in price nor in quantity is
the business actually done by the Union producers as good as the offer
I had made them, nor as far as profit division is concerned, is it as
good as the business actually done by South West. This shows that the
old Syndicate could never make a competitive offer to South West, and
it would have been a sheer waste of time to ask them, especially as
their policy and the De Beers' policy had been one of continuous
antagonism to South West.
The
79 per cent of -£4,000,000 supplied by the Union producers is equal to
^3,160,000; 5 per cent of this is -£158,000 so that the replacement I
offered, namely, 85 per cent compared to 80 per cent which was
accepted, will result in a loss of ^158,000 of trade. In addition to
that, it is perfectly certain that the price which would have had to be
paid to the Union producers from 1 July onwards, would have been more
than 2-1/2 per cent higher than the price paid for the
January-June period. Or, in other words, for the second six months of
this year, the Union producers would have received at least a 5 per
cent advance on 1924 prices instead of only a 2-1/2 per cent advance,
which they will receive under the arrangement made with the old
Syndicate.
