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Millers, retailers agree on price caps

BY LULU BRENDA HARRIS

Grain millers and retailers have agreed to sell basic commodities at recommended prices with agreed markups, to cushion consumers from the skyrocketing prices of basic commodities.  

This development is expected to provide relief to low earning households, some who ‘survive on one meal a day’ due to unaffordability of commodities.

Failure to adhere to the agreed mark up would see retailers who do not comply blacklisted and goods withdrawn.

The agreed mark ups for the five key products, which are a necessity in each household – mealie meal is 10 percent, rice 17 percent, self-raising flour 17 percent, salt 10 percent and sugar beans 17 percent.

Retailers are expected to charge these agreed mark ups then top up with two percent electronic tax and one percent bank charges on any of these products sourced from the millers.

Under this agreement, price monitors working with representatives from the Consumer Council of Zimbabwe (CCZ) and Confederation of Zimbabwe Retailers (CZR) will from Monday start going round retail shops checking if prices of these five basic products are sold at the agreed price.

In recent months, retailers have failed to stick to stipulated prices as they have exorbitantly charged high prices while government has dithered on price controls, as they come with dire consequences for the market.

This is why millers have seen fit to regulate themselves with retailers before government can effect price controls.

“We have a consumer and political sentiment that is currently flying around mainly on the cost of maize meal, sugar, salt, sugar beans and self-raising flour. We can’t reach consumers without retailers so we have to try by all means to avoid incidences of 2005 and 2006, when price controls were effected by the government, who as a third party told us what our products must cost,” said chairman of the Grain Millers Association Tafadzwa Musarara at a meeting of millers and retailers in Bulawayo Thursday.

The essence of the meeting, Musara noted, was for both millers and retailers to understand each other from a staple food distribution perspective.

“We as a milling industry account for the production of staple food in Zimbabwe and we have responsibility to mill 400 000 tonnes of flour every year, one million tonnes of maize mill every year, 120 000 tonnes of rice every year, perhaps 60 000 tonnes of salt packing every year and maybe 40 000 tonnes of sugar every year.

“These products are compulsory to any household pantry especially the low income households. Mealie meal is the second sought commodity after water in a household and has no cheaper substitute,” he noted.

Musarara highlighted that the MOU was not pushing for price controls but the idea was so retailers could from the maximum price that was provided mark up according to recommended price.

“When CCZ representatives go around shops, they conclude a brand costs this much but do not name the shop and when report of the bread basket is calculated it is our product that is stated. Then we owe authorities an explanation of how mealie-meal is RTGS14 yet we would have sold it to retailers at RTGS$10.50.

“We are in business as equally as you are, if you feel these margins are unreasonable we have to pump up volumes. Ours is a volumes game and we heading into the drought period where we have to bring in nearly 300 000 tonnes of wheat and 700 000 tonnes of maize,” he said.

The chairman pleaded with business not to take advantage of current economic situation but be responsible.

“I don’t think it was government’s intention to open silo shops but was a response to a situation. So we are in the same boat. Government will never be broke before you are broke. That’s the truth so we need to manage sentiment and do what is responsible for consumers in manner that leaves us viable,” Musarara noted.

CZR president, Denford Mutashu, said retailers were committing not to overcharge consumers or profiteer on those basic products.

“We will go across the country conscientizing retailers and wholesalers but it’s not cast in stone for those retailers in rural areas as we have to accommodate them in terms of additional margins that will arise from additional costs they incur in the event that millers have not transported the products on their doorsteps,” he said.

CCZ Chairman Phillip Bvumbe, weighed in to say price hikes were reasons why consumers needed a Consumer Protection Bill, which had gone in Parliament for a third reading.

“In the new bill there is an aspect of self-regulatory where if the grain millers blacklists someone they have option to report to the commission. If that person does not comply there is a provision in the new Consumer Protection Bill, where the commission can issue a directive to the blacklisted individual to revert back to the original price, if they don’t there are criminal sanctions within the bill,” he said.

“That’s why you find the issue of us working as a cluster is very critical. We encourage this initiative because it will be duplicated in other sectors of the economy but one critical aspect that is very important is the restoration of the dignity so that our people who were surviving on one meal a day access basic goods.”

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