By Eddie Cross
THE decision last week to imprison two of the largest bakers in Zimbabwe for six months and to hold them in custody while their appeal hearing was dealt w
ith was a shock to the entire business community.
Not only was the sentence out of proportion to the “crime” they had committed, but the fact that the maximum fine for the same offence by the company they ran was a paltry $10 000 demonstrates the absurdity of the sentence.
Their crime was to sell bread for a price that was above the “controlled price”. In fact, the last time the price of bread was formally controlled by a Gazette notice was many months ago at the level of $85 per loaf. There are no regulations which say that the price of bread should be above this even though price controllers are using $295 as the “controlled price”.
There are now over 6 000 outstanding court cases against business managers in all fields on price control-related issues. This means that all of them may be subjected to the same treatment. On Tuesday, the price control officials raided the largest food company in Bulawayo and took a “warned and cautioned” statement from the managers. The issue on this occasion was the price of cooking oil. The managing director of the largest wholesale group in the country was on the same day in court on the same charges.
Companies are responding by withdrawing stock from their shelves and avoiding products subject to controls.
Bakers have either stopped producing bread which they cannot manufacture and make a profit at the controlled price and switched to non-controlled products or slashed the weight of a loaf of bread by 40% in order to make it profitable.
It is clear that this standoff cannot continue for much longer without serious consequences. Firms are threatened with closure by the crisis while managers are refusing to continue operations if they threaten their own safety and security.
It is time for the major firms to either stand up to government or take it to court.
In the event that the courts support the government, then the production and distribution of controlled products through the formal sector will become impossible. Such a situation is in the interests of nobody living in Zimbabwe.
By the way — the price of bread they are trying to enforce is the equivalent of less than R1 or US$0,13 per loaf.
The price of bread in all our neighbouring countries is the equivalent of at least R3,50 per loaf.
* Eddie Cross writes from Bulawayo.