Crackdown on business managers continues over price increases

By Lance Guma
09 February 2007

Two directors from the country’s biggest millers, Blue Ribbon and National Foods, were arrested Thursday on charges of increasing the price of flour. Blue Ribbon chief executive Michael Manga and Ian Kind from National Foods were detained at Rhodesville police station before their release Friday. Manga is the Chairman of the Millers Association of Zimbabwe and deputy chairman of the Price Stabilisation Committee. They were due to appear in court Friday facing charges under controversial price control legislation, but police received instructions from senior figures in government to release them. Harare based lawyer Innocent Chagonda is representing them. Police have also indicated they are looking for Blue Ribbons marketing director Monalisa Pfende.

Charges against the two executives are that they increased the price of a two-kilogramme packet of self-raising flour from Z$1 904 to Z$2 600, and a 5kg packet from Z$4 487 to Z$6 500, without the authority of the Ministry of Industry and International Trade. It’s also alleged Manga and Kind agreed to increase the prices of self-raising and baker’s flour from Z$610 000 per tonne to Z$900 000 per tonne.

Bulawayo businessman Eddie Cross condemned the arrests saying National Foods and Blue Ribbon were key food companies whose resources, distribution and manufacturing networks helped feed the country. He says the companies have struggled and done all they can to overcome the economic challenges to serve their customers. Cross says it was shocking to hear that two reputable business executives were being held in the miserable conditions of the holding cells, alongside common criminals. He says it was especially worrying for Kind to be in such an environment given his age, heart problems and diabetic condition.

Cross also criticized the business leadership in the country for walking on eggs and avoiding criticism of the government. Zimbabwe National Chamber of Commerce President Marah Hativagone also condemned the arrests, describing the action as extreme, but said the ZNCC was not in a position to protect businesses, ‘which hike prices unjustifiably.’ In the past police have arrested Lobels chief executive Burombo Mudumo, operations manager, Lemmy Chikomo and Saltrama Plastics managing director Edward Madza for allegedly effecting price increases without government approval.

Analysts accuse the government of double standards saying they freely increase prices on things like television licence fees and yet expect the private sector to somehow absorb price increases in their operations.