Zimbabwe: Bread Price Hike - Govt Intervenes

Photo: The Herald
19 December 2017

The Ministry of Industry, Commerce and Enterprise Development has ordered bakers to revert to old prices after an unjustified increase over the weekend. This follows Bakers Inn's announcement of bread increase to $1 from $0,90 for a standard loaf and family loaf price increase to $1,10 from $1. Addressing journalists yesterday, Minister of Industry, Commerce and Enterprise Development Dr Mike Bimha said all bread prices will return to old prices today after dialogue between his ministry and bakers.

Minister Bimha was speaking after a meeting with stakeholders in the baking industry over the unwarranted bread price increases. "The bakers will revert to the old prices with effect from tomorrow (today), 19 December 2017," he said. "National Competitiveness Commission will immediately engage with the bakers to facilitate swift resolution of the challenges faced by the industry.

"The purpose of this meeting was to dialogue with different stakeholders on the prices of bread and to agree on the way forward." Reserve Bank of Zimbabwe (RBZ), Confederation of Zimbabwe Industries (CZI), Grain Millers Association of Zimbabwe (GMAZ), Bakers Association of Zimbabwe (BAZ), Confederation of Zimbabwe Retailers Association (CZR), Zimbabwe National Chamber of Commerce (ZNCC), Consumer Council of Zimbabwe (CCZ) and the National Competitiveness Commission and Competition and Tariff Commission (CTC) were some of the stakeholders that attended the meeting.

Dr Bimha said the dialogue was not ending with bakers, but Government will continue engaging critical stakeholders in the entire value chain, especially the packaging sector. "My ministry is also working on price escalations for other essential products and similar consultations are continuing," he said. "The ministry is appealing to all players in the value chain to be part of the solution, for instance the packaging sector."

Dr Bimha said there was need to cross-examine all industry constraints in an effort to improve the manufacturing sector. "We need to interrogate these constraints as they present to us and that is the work that is going to take place from now onwards to engage the various stakeholders," he said.

"The players will make their presentation to NCC and explain the various constraints, not just in terms of increasing, but also issues of viability as an industry and we will have to come up with long term plans to deal with these issues." GMAZ, a body which represents suppliers of flour to bakers, said it was surprised with the increase given that the price of floor to bakeries had not changed.

Three weeks ago, Government set maximum wholesale and retail prices of maize meal, rice, salt and flour. In that published list, bakers flour had been set at a maximum price to bakers of $32 per 50kg bag. The bakers did not object to the price as it was the same price that had been maintained by milling industry for the past five years.

Three biggest bakers namely Bakers Inn, Proton and Lobel's, which control more than 80 percent of the bread market, buy at much lower prices than $32 per 50kg bag. The increase cannot be attributed to any increase in the cost of flour. President Emmerson Mnangagwa has since appealed to retailers not to increase prices of basic goods.

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