TNAG-0453-FCO40-518-Budget-of-Hong-Kong-1974-1975-1975 — Page 168

98.

35

Before elaborating on this theme perhaps I should

say that, whilst there are certain activities that can be unambiguously described as "profiteering", it is, in practice, very difficult to define the term or, at least, to find a widely acceptable definition on which to base proposals for

action.

99.

My honourable Friend Dr. S.Y. Chung, for example,

appears to regard "profiteering" as a situation in which a dealer increases his mark-up, in absolute terms, by more than the increase in the price at which it is supplied to him. If this definition is generally acceptable then, as he claims, there certainly has been "profiteering" in the case of locally slaughtered pork and beef and live poultry. But is there likely to be general support for such a definition?

100.

Using the official figures tabled by my honourable

Friend for what he described as "the worst of these three cases"

namely, beef, and taking average prices at the import, wholesale and retail levels for the years 1972 and 1973 it can be shown that, in 1973, import prices increased by 24%, wholesale prices by 28% and retail prices by 20%. From these figures, there can be no doubt that the percentage mark-up

at the retail level on both the wholesale and the import

price declined. This was also the case in the twelve months

to September 1973 as can be seen from the Economic Background

publication and, although my honourable Friend appears to take

some exception to the relevant table in that publication, Ι would point out that it is simply designed to show, as paragraph 85 makes clear, that retailers were not increasing their

percentage mark-ups.

101.

But, reverting to the question of "profiteering" as such, if my honourable Friend's definition is to be adopted,

then, of course, use must be made of absolute increases in

margins. In 1973, the import price of beef (dressed weight) increased by HK$64 per picul, but the wholesale price (also dressed weight) increased by HK$92 per picul implying, on this definition, "profiteering" to the extent of HK$28 per picul

by the wholesaler. The retail price (saleable weight)

increased by HK$120 per picul implying further "profiteering" of, again, HK$28 per picul by the retailer. But it could be

argued that the wholesaler and the retailer almost certainly

/incurred...