Small bakers have accused the country’s biggest miller National Foods of giving big players favourable pricing of flour thereby creating an uneven playing field.
The industry is currently dominated by three giants (Lobels, Bakers Inn and Proton) controlling 95% of the market while smaller bakeries control 5%.
Business Times is informed that National Foods has been selling a 50kg of flour for around ZWL$3,150 while selling the same 50kg to another player for about ZWL$2,000.
The flour in local currency has been elusive thereby affecting operations of small players in the confectionery industry.
Players who spoke to Business Times on condition of anonymity said a big player was getting favourable treatment from National Foods also adding that there has been deliberate charging of flour in USD to stifle small scale players.
“There is a push to reduce the price of bread but there is a need to look at the challenges small scale players are facing.
Flour charged in local currency is not available for small players and to make matters worse is that availability of the product is guaranteed once you pay in US$. This will, therefore, mean reducing bread price will only be cost-effective on players like Bakers Inn,” the players said.
National Foods managing director Mike Lashbrooke said the miller was
selling its entire product in local currency and there have not been
any limited supplies.
“The allegations are not correct and flour sells in local currency. We
have no limited supplies. The flour price will track whatever rate we
access foreign currency at on the auction as advised by Grain Millers
Association of Zimbabwe (GMAZ) late last week.
If you can provide the names of the disgruntled bakeries we will happily supply them with flour,” Lashbrooke said.
Zimbabwe has been facing challenges in wheat availability of late but there have been concerted efforts by the government to allay fears of bread shortages through implementing stop gap measures which have to date yielded little results.
Lashbrooke said there is enough wheat on the part of National Foods
where there is just over one-month usage in stock in its silos while a
full pipeline of imported wheat is expected for delivery.
“As National Foods we have booked adequate imported wheat to
last until the local crop is harvested in October or November.”
Small bakers say reducing bread prices will hit them further considering that the flour in local currency has not been made available meaning their cost of production will jump because of the USD flour.
In addition, GMAZ has directed bakeries to reduce their bread price
citing a reduction in flour price.
In a statement last week, GMAZ said the cost of bread flour had been reduced to ZWL$2,136 per 50kg with effect from July 3 from ZWL$3150.
Bakers were committed to reducing the price of bread from the wholesale price of ZWL$59 and retail price of ZWL$66.