New Coins Must Bring Down Price of Bread – Millers
Dec. 30, 2014 (All Africa Global Media) — THE Grain Millers Association of Zimbabwe has accused retailers of profiteering and insisted that the price of bread needed to come down following the introduction of bonded coins.
A loaf of bread has been retailing for about US$1 with most shops citing the lack of change as the reason but the central bank recently introduced bonded coins in denominations of 1c, 5c 10c, and 25c to help ease the problem.
Zimbabwe has mainly used the US dollar since abandoning its own local currency in 2009 after it had been rendered worthless by hyperinflation.
A member of the grain millers association said the profit margins imposed by retailers which can be anything above ten percent were far too high.
The official said in the United States, which uses the same currency as Zimbabwe, retailers’ mark-ups ranged between 2 and 4,5% while in the UK they averaged 3% and Germany 4%.
“I have used these countries because of similarities of their currency with the USA dollar that we are using,” said the official, who asked not to be named citing possible conflict of interest.
“Bread prices must fall down on account of the new coins,” he added.
“Bakers wholesale their bread to retailers at prices ranging from 80c to 90c per loaf. If we apply the 10% mark-up margin, then a loaf of bread must retail between 88c and 99c.”
He said with the introduction of the bonded coins, the few extra cents must be given back to the consumer after the retailer retains their 10% margin.
“It’s only fair,” he said. “The bakers are producing one million loaves a day, at a rate of 1c change per loaf, it translates to 30,000,000 cents per month of change that must be given back to consumers.
“A whooping $300 000.00 per month is daylight robbery and the retailers are clearly smiling all the way to the bank.”
The Grain Millers’ Association members said they have already met the Reserve Bank Governor of Zimbabwe (RBZ) governor over the issue.
“He (RBZ governor) is of the view that there should be fair pricing in the context of existing free pricing models and not necessary price controls,” said the miller.
“His concern is on the plight of consumers to be charged the correct price and that they should receive the actual change in coins.”
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