XN000022-1974-03-05 — Page 6

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5.

Tuesday, March 5, 1974

DC & I can ensure that wholesalers take delivery of rice

purchased from importers, and these figures are watched very closely to

prevent speculative stock piling by wholesalers.

To this end the department

is able to restrict credit offered by importers to wholesalers.

It may be seen therefore that the rice control schene is basically

a schemo to ensure supplies of rice to meet Hong Kong's consumption demand

and is not a price control mechanism. Nevertheless, the Government has

a responsibility in a controlled system of this kind to ensure that the

interests of the general public are properly looked after and that companies participating at various levels of transaction in rice sales are not able

to manipulate the control procedures for speculative purposes.

UNDERCOVER PAYMENTS

The department has been seriously concerned about reports of

price and supply speculation, For many months visits by officers of

the department have been paid to importers' premises to witness sales and

to retail outlets to examine prices. The three main retailers' associations

have been asked many times to report to the department any instances of

undercover payment demands by wholesalers or any other supply arrangements

not considered normal or reasonable.

The department has been willing, and is willing, to investigate

any such complaint and if proved has the ability to take action against

the wholesaler concerned.

But it has received no co-operation from retailers

and the retail associations have made no complaint

or anonymous

verbal, written

to the department about what they now allege is a widespread

practice of undercover additional payments for rice deliveries from wholesalers.

/DC & I