Over 300 bakers and shopkeepers arrested over bread price hikes

By Lance Guma
23 June 2006

Over 300 bakers and shopkeepers in Harare were arrested this week over accusations they are overcharging on the price of bread. According to the state owned Herald newspaper the bakeries increased the price of bread from the gazetted Z$85,000 to between Z$130,000 and Z$160,000 depending on the type of loaf. Police officials say the clampdown on those ‘over-charging’ started on the 16th June. The Herald even ran an editorial entitled ‘Balanced pricing formula for bread vital’ which industry experts described as wishful thinking in a collapsed economy.

Most bakers have remained defiant on the new prices saying they cannot produce at a loss. The bakers say they have to cover increased costs of inputs, including imported flour. Most shops in the city had no bread on the shelves. Analysts predict the loss of at least 20 000 jobs if bakers are forced to produce under current conditions. The government says the bakers are profiteering but at the same time is ignoring the 1200 percent inflation most of them have to work under. This is made worse by the perennial shortage of wheat and that most producers are having to import some of the inputs, at a time with massive foreign currency shortages.

The National Bakers Association is quoted by Reuters News Agency as saying, ‘It is important for the consumers to understand that a loaf (of bread) is not about flour,’ adding that it took some 22 ingredients to produce commercial bread. The price of fuel doubled this week and for Zimbabweans who saw a hike in commuter fares, the bread price increase just added to their woes. Baking industry expert Eddie Cross says the government clampdown will backfire because by indirectly forcing bakeries to stop producing they are creating shortages that will force the bread to go up further. He says there are already reports that some towns have bread retailing over Z$200,000 a loaf.

He explained that only National Foods was attempting to sell flour to the bakers at a price of Z$3,5 million per 50 kg which is close to the gazetted Z$2,5 million. The problem however is that National Foods is not getting the wheat and that mostly Zanu PF functionaries were getting this scarce product from the GMB and selling it on the black market. So the bakeries are getting the flour at almost double the price. Cross told Newsreel that in Masvingo one of the arrested bakers refused to pay the fines being demanded and instead opted to be taken to court. The presiding magistrate is said to have thrown out the case, saying the accused baker had no case to answer.

The police are said to have arrested managers and innocent employees who do not own the bakeries. Although most of the arrested bakers and shopkeepers are paying the fines, legal experts advise that it’s not necessary to do so.

Meanwhile the Zimonline news agency reports that a serious grain shortage has forced three major milling companies to switch off their milling plants. Sources said the Grain marketing Board had failed to deliver grain to millers and they had nothing to mill for the past two weeks. It’s also reported that small milling firms are the ones supplying retail shops because they were sourcing their grain on the parallel market.