Bread price hike: Govt intervenes

Minister Bimha

Minister Bimha

Livingstone Marufu and Michael Tome
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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  • aberbaer

    You can’t price control forever. Fix the root problem.

  • Masaisai

    What is lacking in Zimbabwe is a robust, active and effective consumer awareness. Zimbabwe devalued the US dollar to the point where it makes no sense to the owners of the currency, the USA. And the most lucrative business environment on the entire continent at present is found in Zimbabwe. Where else is a loaf of bread sold for 1USD in an economy where the USD is the dominant trading currency? And still bread is voraciously consumed as a basic commodity? We have cheapened the USD to a level that is now biting us. A standard loaf of bread should not be sold for more than 20 US cents if the true value of the US dollar is taken into account. The bottom line is someone is making serious profit and the tail end of the commercial line while the consumer suffers.

  • No to Price hikes

    But how were they justifying adjustment of the price of bread by a hefty 25% margin. I mean from 80cents per standard white loaf of bread at a Bakers Inn outlet to a dizzy $1 per unit, when every thing including imported commodities like petroleum products such as petrol, diesel etc remained at old prices. This is extremely ridiculous and cannot be explained/justified socioeconomically but perhaps politically. Thanks responsible authorities for the timely intervention.

    • Market Efficiency

      There is a concept called a price umbrella, if the market is efficient who ever increases prices beyond what the consumer assigns value to, then the consumer switches to alternate products or substitutes or other players come in, so there is ever no god reason for price controls with the exception of a monopoly.

  • yowe

    So will they meet every sector?? Prices for almost everything have gone up.

  • Tambai Mese Mujairane

    Maybe this is sanctions by the West.Fuel in this country is expensive(thanks to Government tax), we still have 3 tier prices(USD Cash, RTGS – Which Hon Chinamasa admitted that was overprinted, thereby devauling it, and the money transfers over the phone), this is wt is killing it. If any of these businesses have to buy forex for their business, they are in a fix, hence these increases.

    Prices cant be fixed(Gono tried it, USSR tried it, Mao tried it, all failed), fix the fundamentals, reign in Government expenditure, not just lip service. Withdraw the bond notes.