(Reprinted by kind permission of Bob Radley)
The first Labour Government raised the ire of the NZ merchants when its newly formed Internal Marketing Division took over the distribution of imported fruit in 1938. This was a big blow to old established fruit importers. This interference in the system caused substantial drops in merchant balance sheets.
With the advent of World War II the role of Internal Marketing Division was expanded.
The IMD ostensibly had as its main wartime function the more equitable distribution of scarce wartime supplies. Because of the Government’s stabilisation policy, it was denied the effective use of price adjustments to help to equate supply to demand according to marketing mechanics..
The IMD had in many cases an unenviable task. Instead of being credited with improving the distribution of scarce goods, it tended to be blamed for the scarcities. Scarcities of goods such as eggs and vegetables affected all consumers. Complaints tended to be very vocal. Traders saw in the extension of Government marketing activities a threat to their own livelihood and freedom, and in most cases lost no opportunity to criticise the actions of the IMD. The Opposition in Parliament, which saw the Division as an attack on private enterprise, criticised it at every turn and advocated its abolition.
Actually the policy of the Division was to disturb normal channels of distribution as little as possible. In most cases it operated through existing merchants, but where improved standards were needed in handling and storage facilities or in accounting for profit margins, distributors were licensed.
By the end of the war, it was sole importer of most tropical fruits and island kumeras, which it distributed through merchants on a commission basis. It performed the same function where needed to make good local shortages of lemons, potatoes and onions.
For locally grown apples, pears and most lemons, it guaranteed to purchase the crop and acted as sole distributor through merchants. Small quantities of these fruits were permitted to be sold direct by growers to consumers.
After the war most of the functions of the Internal Marketing Division were progressively transferred to producer boards. In 1948 there ceased to be a separate division for internal marketing, and in 1953 the Marketing Department was abolished.