Rising+bread+prices+immoral+following+bread+price+fixing,+FAWU


 * FAWU News Release, 15 January 2008**

=“Rising bread prices are immoral following scandalous bread price fixing”=

Just before the wound heals from the negative effects of scandalous bread price fixing conduct by the big four players, we are now witnessing an immoral raise in bread prices ‘couched’ in cloth of Chicago Trade Board determined rising wheat prices.

This development just echo’s FAWU’s call for a wider and deeper investigation within and beyond the bread industry. This is because the big four baking companies (i.e. Tiger Brand’s Albany, Pioneer Food’s, Sasko, Food Corp’s Sunbake and Premier’s Blue Ribbon) are vertically integrated to their milling operations, These are still retaining big four status in the milling industry, including wheat products such as flour which is an essential ingredient/ input to bread baking.

Just to give some facts and figures we wish to tell the nation the following:

On the demand side:

In their 2006 July general household survey the statistics S.A established that 283, 177 households had a monthly income of less than R50.00 per capita and 2.79 million households at less than R250.00, yet a family in urban areas spent R72.75 per month on bread consumption on current prices. The 40c or 50c a bread loaf increment will have a devastating impact on these families.

This bleak picture is worsened by high rates of unemployment and poverty as well as high-income inequality, with South Africa considered one of the five unequal societies, in terms of income distribution in the world.

On the supply side:

Since deregulation from 1997 the milling and baking industries have been promoting technology that enables them to use less flour in bread whilst maintaining appearance of old standard loaf size.

The standard loaf mass has decreased from 800 grams in the 1990’s to 700 grams by 2002 and 600 grams more recently while the appearance remained the same and prices increased over the years. This is one aspect the deeper and wider investigation must cover.

Another untold story in how the milling and baking industries suppressed domestic production of wheat grain by maintaining grain grading regulations that favour high rise leaves instead of higher yielding wheat varieties, which was abandoned recently when we latter was used again in South Africa to avoid using imported grain. The recently announced price raise is the consequence of that previous practice.

Given the above, FAWU calls on moratorium on this bread price increase and for a deeper and wider investigation by the Competition Commission on the structure and practices in the wheat grain storage, milling and banking value chain.

We further call for the setting up of National Food Regulator and Nationalization of the wheat grain to bread and maize grain to maize – meal industries.

We still reiterate our call for the resignation of the Chief Executive of the three other big four companies to join Nick Davies, CEO of Tiger Brands, for their role in immoral bread price fixing scandal.

We urge communities and civil society organizations, including Trade Unions and faith – based organizations, to join FAWU in the rolling mass action against skyrocketing food prices.


 * For more information kindly contact Katishi Masemola (General Secretary)**

By e-mail

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