Bakers, Millers Bicker Over Flour Price Hike
Bakers under the aegis of Premium Bread Makers Association (PBAN) have disagreed with the claim by flour millers that the price of flour has not been increased in the last one year.
This came as the Association of Master Bakers and Caterers of Nigeria announced on Thursday that bread prices would be increased by 15 per cent nationwide beginning from July 24.
While speaking with Economic Confidential, President PBAN, Emmanuel Onuorah, said that flour millers, in the wake of the devaluation of the naira had implemented another increase in the price of flour.
According to him, increased input costs in recent months had further exacerbated the plight of bakers who were already being burdened by a vast array of macroeconomic challenges.
He stated that many of his members had abandoned the business of breadmaking due to the numerous challenges in the business environment.
Onuorah said, “They are gouging price. They just do whatever they want, they were telling us before now that they source their forex from the black market. Now that the government has taken away the official window we have discovered that they were getting forex from the banks.
“They’re going to implement the increase in the price of flour in tranches. They have added N2,000, with the possibility of adding another N3,000. I don’t know when, but that’s their plan. In the last three months, they have added N10,000 to the price of sugar. 150kg bag of sugar has gone up by N10,000.”
The recent removal of fuel subsidy and devaluation of the naira, he said, had led to significant increase in the overhead costs of bread makers who were being forced to produce below optimal capacity.
He added, “Many of our distributors are using fuel. If they were using N4,000, today if they buy N4,000 fuel it doesn’t go anywhere. So it is affecting distribution. Most of them are leaving this business.”
Onuorah said the leadership of the union had already instructed the members to adjust prices in light of the recent developments in order to keep up with production costs.
“We have started doing it individually without necessarily giving any percentage adjustment. If any bakery does not adjust price, they will close down.
“Mind you, PBAN members are not increasing price, but making marginal adjustments to be able to match escalating costs with revenue, which by the way is disproportionate in terms of revenue.”
Reacting, the Corporate Communications Manager at Flour Mills of Nigeria, Modupe Thani, denied the claim by PBAN that the price of flour had been increased
“The price of four has not gone up, and it hasn’t gone up in recent times. I’m not sure where that story is coming from. I also spoke with my people in-house and they said nothing like that has happened. The price of flour has not been increased for more than one year.”
The General Secretary of the Flour Mills Association of Nigeria, Saliu Olalekan, refused to comment on the matter on the ground that the association would not get involved in matters revolving around the price of the product.
