Tinashe Makichi Business Reporter
All is not well in the bakery sector as deep-seated “wars” over the most essential input – flour – are straining relations between millers, bakers and suppliers.
Bakers are lobbying Government to allow them to import processed flour which they argue is cheaper and of better quality than the product from local millers. The millers on the other end are lobbying Government to stop flour imports arguing that imports have for a long time been driving them out of business.
This bickering between the two lobby groups comes at a time when both parties are making submissions to Government for the Mid-Term Fiscal Policy Review.
Knives have been sharpened and several scenes have happened all in the name of setting the agenda. There has been a lot of strategising and scheming in the sector.
The bread value chain currently consists of millers (who are importing most of the wheat being processed), bakers, suppliers and retailers.
Since 2013 the whole bakery environment has witnessed wide ranging drama either coming from the millers, the bakers themselves while retailers have also had some incidences worth reporting about.
The war taking place in the bakery industry was exposed sometime last year by The Herald Business when diversified group Innscor Africa Limited through its subsidiary National Foods was sucked in what was described as a huge corporate scandal where the company was accused of driving an agenda towards creating a flour milling monopoly.
There was an outcry among bakers who cited that the ban on flour imports was tantamount to the creation of a flour monopoly for National Foods which would be the biggest beneficiary if it was effected.
Sources in the bakery industry are of the view that a scenario where an individual group controls raw material supply while owning a bakery, will end up exposing other bakery companies, who have been surviving on imports for better prices and quality.
There were allegations that there were price disparities between some bakers and National Foods sister company, Bakers Inn.
The Herald Business last week ran a story which said Bulawayo-based Pakistan Company, Bulk Commodities Private Limited was under fire over allegations of supplying substandard flour on the market.
This issue came to light after one of Bulawayo’s fastest growing bread manufacturer, Double Fresh Bakery claim to have lost business after using flour supplied by Bulk Commodities Private Limited.
Further investigations made have however exposed that there might a story behind the story.
Double Fresh managing director Mr Mnothisi Nsingo told this publication that Bulk Commodities Private Limited failed to adhere to proper business principles by supplying substandard and water damaged flour in a period of two months resulting in a massive hit on the company business.
The Herald Business is informed that the commodity supply company has been supplying flour for sometime on the local market and no complaint was received from other bakeries.
Sources in the bakery industry say the Fresh Bakery incident might just be one of those issues likely going to have an influence in the MTP to be presented by the Minister of Finance and Economic Development Patrick Chinamasa.
Therefore we ask the question; who is fooling who? This is not the first time that such incidents have happened in this troublesome sector.
Bulk Commodities director Imran Shahzad told The Herald Business on Friday that the Fresh Bakery incident was just one of those allegations meant to tarnish the image of his company.
He said the company supplies flour to 15 bakeries in Zimbabwe including Lobels Bread and there have been no such complaints as the ones being raised by Double Fresh Bakery.
“We deal in four types of reputable brands from South Africa and each of our clients chooses the one they require. If the product wasn’t fit why did they sign for it and have it cleared from our premises than complaining after it has undergone further processing. I am afraid we can’t be held liable that their bread wasn’t accepted on the market.
“The problem lies solely with their quality controller,” said Mr Shahzad.
A member of Lobels management who could not be named supported Mr Shahzad’s comments saying the company has been getting flour from Bulk commodities and said the recent incident was just one of those agendas likely to have been driven by the companies trying to create a monopoly on the market.
Contacted for comment yesterday, National Bakers Association of Zimbabwe president Givemore Mesoemvura confirmed the Bulawayo incident but highlighted that conflicts between bakers and millers were prevalent in the industry.
He said any move to ban flour imports at the moment must be treated with caution.
“The proposal to ban flour imports is a decision that should be investigated and come up with a point which highlights the people likely to benefit from the move. I believe it is a call for just selfish and individual gains not that it is coming out of national interest,” said Mr Mesoemvura.
“This is borne out of the argument that bakeries who are not linked to millers have been the biggest sufferers where the price structure has not been even while the quality of flour supplied to them has been compromised,” said an industry player who requested anonymity
Retailers have also not been spared of the shenanigans happening in the industry. Last year, TM/Pick n Pay refused to accept Lobels bread on their shelves.
Sources in the market told the Herald Business last year that the decision by TM/Pick n Pay to dismiss Lobels bread was influenced by Bakers Inn which is another subsidiary to Inscor Africa Limited.
The Competition and Tariff Commission last year had to intervene leading to the re-admission of Lobels bread in the shelves. Therefore the bakery industry is fast becoming another problem child where everyone is fighting to have an influential stake in the whole manufacturing matrix.