Miller says State blocked sale of Host­ess flour

Business Daily (Kenya) - - CORPORATE NEWS - James Kar­iuki jkar­iuki@ke.na­tion­media.com

Listed miller Unga Group lost its ‘Host­ess’ maize flour brand's mar­ket niche af­ter the gov­ern­ment di­rected the firm to with­draw it from su­per­mar­ket shelves fol­low­ing in­tro­duc­tion of a maize sub­sidy that slashed the price of 2-kilo­gramme pack­ets to Sh90.

The com­pany re­vealed that its per­for­mance for the year to June 2018 took a hit af­ter it was forced to pull its pre­mium maize meal brand from su­per­mar­ket shelves last year as the State sought to make the key food item more af­ford­able amid soar­ing food prices.

While re­leas­ing its au­dited fi­nan­cial re­sults for the pe­riod, Com­pany Sec­re­tary Win­niefred Jumba also in­di­cated that all millers were di­rected to price their 2-kilo­gramme pack­ets of flour at Sh90 with­out re­gard to brand­ing.

“The com­pany was not al­lowed to sell ‘Host­ess’, its pre­mium maize flour brand dur­ing the sub­sidy pe­riod lead­ing to loss of loyal cus­tomers. Since our re­sump­tion of ‘Host­ess’ sale, the up­take has been slow but pos­i­tive progress to re­gain mar­ket pres­ence has been made dur­ing the se­cond half of the year,” said Ms Jumba.

At the time, ‘Host­ess’ was re­tail­ing at Sh184 for a 2-kilo­gramme packet.

The miller’s net profit hit Sh783.2 mil­lion com­pared to a Sh7.04 mil­lion loss in­curred in the same pe­riod last year

The spe­cial­ity brand, pop­u­lar among Kenya's mid­dle class, was ab­sent from re­tail­ers’ shelves for eight months up to De­cem­ber 2017 when the direc­tive was lifted with in­creased maize har­vests.

Unga Group re­turned to prof­itabil­ity in the fi­nan­cial year ended June 2018 af­ter mak­ing a loss last year.

The miller’s net profit hit Sh783.2 mil­lion com­pared to a Sh7.04 mil­lion loss in­curred in the same pe­riod last year.

The firm’s rev­enues rose by 2.3 per cent to stand at 19.98 bil­lion.

Mean­while, a sur­vey within lo­cal re­tail shops in­di­cate maize flour prices are slowly fall­ing to be­tween Sh80 to Sh90 de­spite the gov­ern­ment’s direc­tive that the max­i­mum price for a 2-kilo­gramme packet of maize flour should be Sh75.

— FILE

MAR­KET A su­per­mar­ket worker ar­ranges maize flour pack­ets.

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