CONFIDENTIAL
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3. I ALSO CHALLENGED WHETHER APPLICATION OF AVERAGE (RATHER
THAN ACTUAL) MARK -UPS ON PRODUCTION COSTS TO HONG KONG COMPANIES
NOT VISITED BY MILLMAN IN 1968 WAS POSSIBLE UNDER THE CUSTOMS
ACT. AND WHETHER CUSTOMS VALUATION LETTERS WERE CORRECT IN
SAYING THE MARK-UP WAS A RESULT OF A SURVEY WHEN NO SUCH SURVEY
HAD TAKEN PLACE. STITT WILL BE ABLE TO HELP ON THIS.
·
4. WE HAVE NO OBJECTION TO HANDLEMAN BEING INFORMED OF OUR
INTENTIONS WITH STITT. HANDLEMAN'S INVOLVEMENT WAS NOTIFIED
TO US RECENTLY THROUGH MICHEL OF HONG KONG. WE ARE HAPPY TO
ASSIST HANDLEMAN AND BELIEVE HONG KONG CLOTHING INDUSTRY WILL
CO-OPERATE ALSO.
5.
REGARDING YOUR TELEGRAM 35 PARA. 4 OUR RESEARCHES SHOW OF
28 GROUPS OF GARMENTS COSTED, MARK-UP ON PRODUCTION COSTS OF
5 GROUPS IS UNDER 10% SEMICOLON OF 2 GROUPS IS BETWEEN 10 -- 20%
SEMICOLON OF 14 GROUPS IS BETWEEN 21 30% SEMICOLON OF 7 GROUPS IS BETWEEN 31 40%. THE HIGHEST MARK UP IS 39.21% (EXPORT SALE)
'SEMICOLON THE LOWEST IS 3.8% (EXPORT SALE SEMICOLON HIGHEST
LOCAL SALE MARK-UP IS 35.26% SEMICOLON LOWEST LOCAL SALE MARK -UP
IS 22.35%. NO OBJECTION TO THESE FIGURES GOING TO HANDLEMAN.
S
6. MEANWHILE I AM TOLD LOCAL COMPANIES ARE CONTINUING TO SHIP
AND INVOICE AT PRE-MILLMAN PRICES. 1 SHOULD BE INTERESTED
TO LEARN WHAT HAS HAPPENED ON ARRIVAL OF THESE GOODS IN CANADA
IF YOU HAVE ANY INFORMATION.
7.
WE ARE MOST GRATEFUL FOR YOUR CONTINUING INTEREST.
F.C.O. PLEASE PASS TO OTTAWA.
SIR D. TRENCH
[REPEATED AS REQUESTED]
INTERNATIONAL TRADE DISTRIBUTION
H.K.D.
COMMODITIES D. N. AM. & C.D.
TR. FOL. D.
CONFIDENTIAL
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