The Congress of South African Trade Unions, COSATU, has accused food companies of exploiting the poor by increasing bread prices at a time when the cost of wheat has come down.
The federation says the bread manufacturers have maintained higher prices despite the drop in wheat prices over the past few months. COSATU has threatened to march against the high prices of bread. “Cosatu noted that, bread prices have risen over the last few months while other costs have increased. But when the price of wheat comes down by 12 percent there is no commensurate reduction in the price of bread,” the Cosatu statement said. “The bread companies must explain why the bread price is not coming down and why they keep their prices the same. It looks like the collusion that they were fined for in the past has not taught them to stop robbing poor people.”
The federation says consumers are charged at least R12.50 for a loaf of brown bread and R14 for a loaf of white bread in retail shops, while retail companies such as Shoprite, Pick n Pay and Spar who have in-house bakeries, charge as little as R6 a loaf.
Bread is a staple food in poor households
Fikile Zulu is a 62 year-old single parent and a pensioner who stays with her daughter (recently employed) and two grandkids in her home in Alexandra north of Johannesburg. She says she buys a loaf of brown bread (Albany) three times a week and this helps her to make a breakfast and a sandwich for her grandkids who attend a nearby crèche.
Upon hearing the news of the likelihood of the bread price increase in the near future, her soft voice changes with shock as she anticipates the difficulty this will bring since she is unemployed and depends on her pension grant.
“I don’t understand because the bread is already too expensive now. I spend around R13 on a loaf of Albany three times a week. Now if the price will increase this means I’ll have to buy a loaf of bread once or twice a week and this will make my life very difficult,” she says.
Alexandra tuck shops are also panicking about the news that this will affect their businesses badly. Makebu Temesgen is an Ethopian national who runs a spaza shop at the corner of 13th Avenue and Alfred Nzo Street in Alexandra.
“On average I sell close to 20 loaves of bread daily. Both Blue Ribbon and Albany. The unknown brand which is quite cheaper at R7, sells about 15 loaves daily. We don’t make much profit, only 50 cents per loaf. Sometimes people come here short of money, I have to help them,” he said.
Earlier this year the Business Day reported that according to National Treasury bread prices are expected to rise at least 10% as a result of the 34% increase in the import duty on wheat, the reason given being the extended drought, which has plagued the agricultural sector. This is why the Treasury has been reluctant to grant Grain SA’s application for a wheat tariff increase, which it lodged with the International Trade Administration Commission in December.
Reacting to the news, Imraahn Ismail-Mukaddam National Coordinating Committee Member for the South African Food Sovereignty Campaign (SAFSC) said bread is already unaffordable for poor citizens who make up 14.3-million of South Africans who are food insecure. He said the free market and monopoly capital are extracting maximum profit from the most vulnerable.
“They blame the increase in import tariff but the tariff is specifically in place to ensure a price level that has already been factored into the bread prices during previous increases. They are therefore not paying more for wheat than they had previously, so this cannot be used as justification for price increases,” he said.
He added that to make their voice heard they have partnered with grassroots organizations to mobilize around high bread and food prices under the slogan #BREADPRICESMUSTFALL.
In 2007, Tiger Brands was fined R98.8-million by the country’s competition authority after admitting that it colluded with rivals to fix the price of bread. Pioneer Foods was fined R200m in 2010.