BREAD manufacturers have warned government of a “total collapse” of the bakery sector due to government-sanctioned price controls which have left the industry “bleeding more than any other industry” in the coun
try’s ailing economy.
In a letter to Industry and International Trade permanent secretary Christian Katsande, the National Bakers Association (NBA) said it was “a sad story” that throughout the year bread had been kept at uneconomic prices gazetted by government when other sectors were allowed to adjust prices upwards fortnightly if not weekly due to the current hyperinflationary environment.
They said the current hyperinflationary environment called for monthly price reviews “to keep the industry viable”.
The letter, dated November 7 and signed by all leading bakers in the country, indicated that the bakers felt let down by government, prompting them to act in a manner that had resulted in clashes with regulatory authorities.
“Now and again we wait for price adjustments, which never come, up to a point where we are forced to (make) unilateral increases to just break even and avoid collapse,” the bakers charged in the letter, copied to stakeholders, police commissioner Augustine Chihuri as well as five cabinet ministers and the deputy Minister of Industry and International Trade.
The bakers include Lobels, Bakers Inn, Superbake, Victoria, Mangoma, Koshen and Auflan bakeries as well as bakery departments of major supermarket chains Spar, OK and TM supermarkets.
Attempts by the bakers to increase prices in response to increasing input costs have often led to hostile reaction by authorities who have unleashed the police, resulting in arbitrary arrests of bakery management.
The wholesale price of bread was recently adjusted upwards to $295 after having been at $85 for most of the year.
Bakers said an ordinary loaf should cost $638. Bakers have responded to the impasse over pricing by reducing the size of the standard loaf. The quality of bread has also degenerated. This move by bakers is seen as an indirect increase in the price of bread.
“As we write this letter we applied for a price of bread of $467 on October 5 and no price review has been awarded,” the NBA said in the letter.
“In the meantime, whilst we were waiting for the response, costs further escalated and the correct retail price of a loaf of bread should now be $638,” the bakers said.
Those that remain operational have streamlined operations.