Bakeries close down(14-12-06)

HARARE - Bakeries have started laying off hundreds of contract workers and are losing at least $5,8 million

a day as the wrangle between the government and bakers over statutory price controls on bread continued this week with no solution in sight.

The bakers argue they are incurring heavy losses and risk going out of business soon after using up the current flour stocks. Burombo Mudumo, the National Bakers Association chairman, said this week bakers were losing $5,8 million every day because of the mandatory price controls on bread being enforced by government. Mudumo, who had been jailed before being released on bail pending appeal for illegally hiking bread prices, told The Zimbabwean: “It’s not possible to produce bread at $520 and sell it at $295. A business that does that will close down sooner or later.”

He said he his association had written to the ministry of Industry and International Trade seeking a raise in the price of bread to $700.

A production manager at a city bakery, who refused to be named, said: “We are incurring heavy losses every day and we cannot continue producing bread under the prevailing circumstances. As a result, we are down-sizing our operations and doing away with contract workers.”

Since the beginning of this year, the price of flour has gone up every month by between 20 and 50 percent.

While the Cabinet was expected to discuss the matter next week, Mudumo said bakeries were producing and selling bread at a huge loss. He said millers and bakers were eagerly waiting for the government’s response to an appeal for a review of the price so that all parties could get a better deal. – Own correspondent

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