Published by the government of Zimbabwe
Christina Mungoshi and Joseph Madzimure
10 October 2008
Harare — Innscor Africa Ltd, Zimbabwe's second biggest conglomerate by market value has closed its fast-foods retail units citing uneconomic pricing.
The group has not been operating bread and confectionery maker, Bakers Inn, Pizza Inn, ice-cream producer Creamy Inn and Chicken Inn since last Sunday.
Electronic gadget retailer, TV Sales and Hire is also closed to the public, and stick-up notices at the entrance read: "Closed for stock take." The stock take is now five days old.
Innscor Africa stopped operating the units after the National Incomes and Pricing Commission ordered a wholesale slash in the prices of its products late last week.
Innscor was one of the several retailers selling products using the Real Time Gross Settlement foreign currency transfer rate, an incredibly fixed rate of exchange for the green back.
The popular two-piecer, a breakfast or lunch meal with two pieces of chicken plus some French fries cost more than $1,4 million but was slashed to $5 000 last week.
It means one needed to visit the bank at least 70 consecutive days withdrawing the maximum $20 000 every day to be able to purchase this product.
In rand terms, the two-piecer cost an estimated R2 300 at last week's street market rate of R1 to Z$6 000. The same product cost less than R50 in South Africa.
Officials at the food outlets said there were shortages of raw materials like potatoes needed for producing French fries amongst others.
Innscor's fast foods director Mr Givemore Munyanyi said that the company is still waiting for NIPC approval to open its food outlet.
Mr Munyanyi said: "We have contacted the NIPC to come up with a common pricing formula in foreign currency, to keep the business running, but nothing has materialised yet.
"We are still going to meet the NIPC until we reach a common ground, and some shops like Spar Borrowdale have already started trading in foreign currency," he said.
"We have closed our food outlets not only because we are waiting for NIPC to approve prices, but we do not have stock."
Mr Munyanyi said that suppliers needed cash upfront before releasing their products.
Innscor Africa Limited said it will resume operations after price negotiations with the National Income and Pricing Commis- sion.
The company has been licensed by the Reserve Bank of Zimbabwe to charge the goods in foreign currency as a survival strategy in the face of cash shortages and the need for restocking.
Innscor's fast food division has been closed waiting for the NIPC to approve their prices.
The RBZ has cancelled the RTGS system, as a form of payment due to misuse of the system by some individuals.
A survey conducted by the Herald Business yesterday revealed that Innscor outlets in Harare have been closed for almost a week
Among the outlets closed are Nandos along Nelson Mandela Avenue, and Bakers Inn along Fourth Street and Jason Moyo.
"We are currently sorting out one or two things to make sure that the company will charge its products in foreign currency.
"We have been licensed to sell our products in foreign currency, so there is need to train our staff and we need to do some stocktaking so that we may adjust our prices in line with the foreign currency price."
"We need some chickens, potatoes, tomatoes, and some spices, which need to be imported," he said.
Innscor has a market value of US$477 million.
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