A local activist in the basic food’s sector has warned that the prices of bread and maize meal are being unrealistically raised by several ‘big corporate monopolies’. This comes after the average price of a 700g loaf of bread increased by 8.9% in January this year, to R11, 43. This is in contrast to R10, 49 just a month prior.

And Imraahn Mukaddam, who serves as coordinator of the South African Food Sovereignty Campaign, said they were noting a disturbing trend in that most of the big food producing companies were using bread and maize as their profit centers.

“If we take for instance Pioneer Foods; their Sasko division where bread and maize is produced; for the 2013/2014 financial year their essential foods division showed a profit of over R860 million. Their CEO alone earns over R15 million without share options,” he said, suggesting blatant profiteering on basic food products.

Despite having been at the forefront of exposing the trend of ‘price-fixing’ in the sector back in 2006, Mukaddam said little has changed since. He claimed the majority of the big corporations were still keeping tabs of each other’s prices, in order to maintain some uniformity in the market. This, according to him, was not driven by increased costs in production but rather “pure greed”.

Some of the companies have attributed the latest increase to a price hikes in fuel and electricity costs amongst others. But Mukaddam was extremely critical of such suggestions.

“What we’ve noticed is that the price of petrol was already R14 a liter and the price of bread had already gone up to accommodate for that. So it’s gone done to R10 and now back to R12.50 a liter, and now they’re using the same shift in fuel price to justify added increases,” he claimed, adding that the price of bread did not come done in conjunction with the drop in petrol price.

One of the companies singled out by Mukaddam for such malpractices, Pioneer Foods, rejected VOC’s advances for an interview. However, the group’s Marketing Executive, Anton Van Zyl issued a written response assuring that they were seeking to offer consumers “competitively priced products of the highest quality”.

He further attributed the price hike to rising costs in production and distribution.

“Although we have seen some short term fuel price reduction – this represents a relatively small element of our total input costs and assists with price restraint. Raw material, energy and labor cost increases as well as the rand weakness are amongst the pressures we face,” read the statement.

He also singled out the costs of importing wheat, and a new import duty as further reasons for the increase.

“With South Africa being a net importer of wheat, effective raw material cost for millers is therefore a combination of the landed cost of local and imported wheat. In addition there has also been an activation of a wheaten import duty effective since October 2014.” He noted.

But Mukaddam was adamant that the big companies were controlling the monopoly from top to bottom, adding value to each step of the chain be it farming, production, or distribution. He said they would be pushing for urgent government intervention in this matter.

The SA Food Sovereignty Campaign will be holding a tribunal from the 7th-9th May in which they will attempt to hold the bread producing companies accountable for alleged ‘price-fixing’.

Those seeking to get into contact with Mukaddam with regards to this issue, may email him at consumerdialogues@gmail.com . VOC (Mubeen Banderker)