Millers attack bakers over flour imports
GRAIN millers have criticised the bakers association, Lobels Bread and its major shareholder, Old Mutual, over what it describes as “falsehoods” being spread by the National Bakers Association of Zimbabwe regarding the removal of wheat flour from the General Import Licence by Government.
The Grain Millers Association of Zimbabwe yesterday noted that two major bread baking companies had already switched to 100 percent Zimbabwean milled flour.
The millers association accused the NBAZ of launching a campaign against the plans to amend the rules of origin for wheat flour as enunciated by the Minister of Finance and Economic Development Minister Patrick Chinamasa in the 2017 National Economic Budget Statement.
The millers alleged that the bakers association, which represents some of the bakers in the country, is deliberately misleading the public through a campaign in the last fortnight against Government’s intervention. The bakers association, it is alleged, has been arguing that the “price of flour had gone up by 19 percent”.
“The NBAZ wants to continue importing flour so that they can blend for ‘quality’ purposes.”
GMAZ said: “The submissions made by the NBAZ are, with respect, false.”
GMAZ said the price of bakers flour has been and still ranges from $26 to $32 per 50kg bag. The range is informed by quantity/payment discounts, promotions, among other things, extended to bakers.
“If the discount is withdrawn due to failure to meet agreed payment obligations or for any other reason or if the promotion ends, that will not constitute as an increase.
“For the record, some bakers have a bad payment record and we are ready to publish the names and particulars of these bakers if they challenge us to do so,” the millers said.
“For argument sake, assuming that there was a price increase of $5 per 50kg bag as alleged by bakers, this will translate to three cents per loaf. Bakers price to retailer’s ranges from 72 cents per loaf to 90 cents per loaf of bread. So even the three cents per loaf is very insignificant to cause bread increase.
“NBAZ have notoriety of threatening price increases as an extortionate means to arm twist Government to give in to their demands. A quick (search on) Google will show that NBAZ has made these threats more than four times since dollarisation in 2008 up to present day but bread has remained at most $1 per loaf nationwide.
“Bakers are free to embark on backward integration by acquiring milling plants, (existing or new) or alternatively own wheat and have it toll milled. Victoria Foods, third largest flour milling company is available for toll milling. These are better alternatives to reduce costs of flour and are consistent with national interest and objectives of localising production,” GMAZ said.
Furthermore, the millers said, two of the country’s leading bakeries — Bakers Inn and Proton — are now procuring 100 percent local flour and their decision to do so is commendable.
The quality of their products remain the country’s best and the consumer’s favourite. This is testimony that, after a more than $34 million retooling exercise carried by local millers, local flour has not only improved but compares favourably with other flour produced internationally.
“Any claims that local wheat flour has to be blended with imported wheat flour on the grounds of its poor quality is misleading and untrue. It is simply a ploy by some bakers who want to profiteer from cheap imports at the expense of our economy. Lobels Bread, for example, has been the biggest wheat flour importer in the country in the past five years but curiously, it has the highest wholesale price of 90 cents per loaf.
“The savings obtained on cheap flour have not been extended to the millions of consumers. It, therefore, begs a question, who is benefiting from these cheap wheat flour imports? “It’s simply a profiteering gimmick that borders on economic sabotage,” GMAZ said.
“Government has given necessary protection to Cairns foods against competing imported products. It is this same protection against imports that have been expected to local millers.”