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is designed to slaughter for the needs of Hong Kong Island retailers, Cheung Sha Wan for Kowloon retailers, the Tsuen Wan Slaughterhouse for Tsuen Wan retailers, and the Yuen Long and Tai Po Slaughterhouses for West and East New Territories retailers respectively. The Cheung Sha Wan Abattoir is overloaded, which has forced some Kowloon slaughter out to Tsuen Wan and Yuen Long, which would otherwise be underused. Nonetheless, competition is minimal. No animals are slaughtered in Kennedy Twon for mainland retailers, nor are any animals slaughtered in mainland abattoirs for Hong Kong Island retailers. No animals are slaughtered in Cheung Sha Wan for New Territories retailers. Each abattoir/slaughterhouse serves its own retailers and is effectively severed from direct competition with its neighbours : the only reason why differential costs district by district (in particular the markedly higher live animal transport and slaughter costs on Hong Kong Island) do not lead to differential costs to the consumer is that the Hong sets common prices at all its wholesale markets, effectively subsidising Hong Kong consumers from its mainland income.
1.
At the Appendix to this paper is a graph showing that the average retail price of fresh pork over the last 11 years has been kept marginally below general increases in the cost of living, when set against the general consumer price index.
Controls on the Ng Fung Hong's pricing policy
in the present system
8.
Three factors influence the Hong's policy of setting meat prices at a stable level: the influence of the retailers, the available alternatives to fresh meat, and the requirement of keeping up a stable demand in Hong Kong.
9.
The power of the retailers lies ultimately in the fact that it is they and not the importer who own the animals to be slaughtered, and that it is only retailers who are registered as persons who can present animals for slaughter in the two Urban Council abattoirs. In the New Territories, where theoretically anyone, including importers, can present animals for slaughter, all the private slaughterhouses are in fact owned, in whole or as majority shareholders, by consortia of the meat retailers in the districts concerned. Obviously, in any situation where the price of fresh meat increases in real terms it is the retailers who must face the consumer and risk the losses of business likely to arise. The influence of the retailers, which is both built into the system and backed up by strong and vigorous (and, with almost 100% membership, very representative) Trade Associations, is always exercised in favour of a conservative, and stable Hong pricing policy for business considerations. The Hong in turn finds it profitable and beneficial to suit the retailers by adhering to a conservative and stable pricing policy, because this will enable the retailers to maintain a stable and sure demand for which the Hong plans and executes a steady supply.
Hence, this
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