Bread shortages loom in Zimbabwe on the back of monopolies
Harare, Zimbabwe (PANA) - Bread shortages may loom in Zimbabwe after scarcity of the basic commodity started to emerge last week in what government blames on monopolies.
At the 19th cabinet briefing held on June 4, Industry and Commerce minister Mangaliso Ndlovu revealed that his ministry had noticed that there was an increase in monopolies in the market and as such instructed the Competition and Tariff Commission to take action.
“Lobels indicated to me on Wednesday that they were not getting flour and I asked them ordinarily where do they get it from because how can it just be Lobels who is not getting flour whereas everyone else is getting? Unless it is there sector issues or wars you never know. So I do not know because I did not get the same from Bakers Inn, I did not get the same from Proton,” Ndlovu told PANA in a phone interview on Friday.
“That is the reason why we want GMB (Grain Marketing Board) to be heavily involved because the big players use these kinds of advantages to wheel off competition and it is not right. So I do not think it is necessarily an issue of shortages because there is wheat. I think there are other issues that they will not easily spell out that is how I took it.”
According to the National Bakers Association of Zimbabwe (NBAZ) market survey of 2017, the three biggest players on the market, namely, Bakers Inn, Proton and Lobels control 95 percent of the bread market.
All of these companies depend on flour from mainly National Foods Limited and Blue Ribbon Foods, the two biggest milling companies in the country, with the former having the larger market share in Zimbabwe.
National Foods Limited is a subsidiary of foods manufacturer and distributor National Foods Holdings Limited which is owned by Innscor Africa Limited, a focused group of light manufacturing businesses in Zimbabwe.
Innscor Africa Limited shares seven of its largest shareholders with Simbisa Brands Limited, a fast food company, which owns Bakers Inn.
The shareholders are ZMD Investments (Pvt) Ltd, HM Barbour (Pvt) Ltd, Old Mutual Investment Group Zimbabwe (Pvt) Ltd, Sarcor Investments Pvt Ltd, Pharaoh Ltd, Mining Industry Pension Fund, and Music Ventures Pvt Ltd.
Simbisa used to be a wholly owned subsidiary of Innscor Africa Limited until the former branched off to form its own standalone company in October 2015.
As such, Bakers Inn may enjoy preferential treatment from National Foods Limited in terms of receiving flour which is competed for together with Lobels and Proton.
Both Lobels and Proton are locally owned entities which do not have the same capital support in terms of shareholding as compared to Bakers Inn.
Lobels is part of bakery and confectionery company Lobels Holdings Limited, which is owned by local private equity firm Takura Capital, a firm that is financially backed by the United Kingdom investment firm, CDC Investment.
Meanwhile, Proton is a family owned company that is headquartered in Marondera, a small town outside Harare.
“I think I have made myself clear about the war we are declaring on monopolies. They are not good for the economy. National Foods is a sister company to Bakers Inn so they have the largest stock from private players of wheat and it obviously means that they can control who gets but I don’t know if that is the case to be honest,” Ndlovu said.
Bread in Zimbabwe has a daily demand of 1,891,505 loaves, according to NBAZ.
Since Zimbabwe's wheat production only meets half the required amount of 400,000 metric tonnes per year, the rest is imported.
But, in light of severe foreign currency shortage importing the cereal crop has been challenging since last year.
-0- PANA TZ/AR 14June2019
