Price Control Prosecutions (5-12-06)

The decision last week to imprison two of the largest bakers in Zimbabwe for
6 months and to hold them in custody while their appeal hearing was
with was a shock to the entire business community. Not only was the
totally out of proportion to the "crime" they

had committed, but the
that the maximum fine for the same offence by the Company they ran was
paltry Z$10 000 (US$5.00) demonstrates the absurdity of the sentence.

Their crime was to sell bread for a price that was above the
price”. In fact the last time the price of bread was formally
controlled by
a Gazette Notice was many months ago at the level of Z$85 per loaf.
are in fact no published regulations which say that the price of bread
should be above this even though price controllers are using Z$295 as
“controlled price”.

There are now over 6000 outstanding court cases against business
managers in
all fields on price controlled related issues. This means that all of
may be subjected to the same treatment. In fact today, the price
officials raided the largest food company in Bulawayo and took a
“warned and
cautioned” statement from the Managers. The issue on this occasion was
price of cooking oil. Today the MD of the largest wholesale group in
country is in Court on the same charges.

Companies are responding to this situation by withdrawing stock from
shelves and avoiding products subject to the price controls. Bakers
either stopped producing bread (which they cannot manufacture and make
profit at the controlled price) and switched to non controlled
Either that or they have slashed the product weight of a loaf of bread
by 40
per cent in order to make it profitable.

It is clear that this stand off cannot continue for much longer without
there being serious consequences. Firms are threatened with closure by
crisis, managers are refusing to continue operations if they threaten
own safety and security.

It is time for the major firms to either stand up to government and
that this harassment must stop, or they should take the State to Court
establish the grounds for this action by the State and to determine
own positions. In the event that the Courts support the State in its
position then the production and distribution of controlled products
the formal sector will become impossible. Such a situation is in the
interests of nobody living in Zimbabwe.

By the way – the price of bread they are trying to enforce is the
of less than one Rand or 13 US cents per loaf. The price of bread in
all our
neighbouring countries is the equivalent of at least R3,50 per loaf.

Eddie Cross
Bulawayo 5th December 2006

Post published in: News

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