Millers reject forex sales, cap profit margins

GRAIN millers have maintained a 10 percent mark-up retail price on mealie-meal and other basics and rejected the selling of the products in foreign currency.

Speaking at a joint meeting with retailers and wholesalers in Bulawayo yesterday, Grain Millers' Association of Zimbabwe (GMAZ) president, Mr Tafadzwa Musarara, stressed the need for all stakeholders across the value-chain to work in unison to avoid wanton price increases that may push re-introduction of price controls by Government.

"We have to work together. We came up with a Memorandum of Understanding where we agreed that from time immemorial, the margins for salt has been 10 percent and in our case it should be 10 percent plus two percent intermediary tax plus 1 percent bank charges.

"The margin for-mealie meal was 10 percent, plus two percent (intermediary tax), and 1 percent (bank charges), rice has been a maximum of 20 percent inclusive of the two percent (intermediary tax) and 1 percent bank charges, self raising flour has been 20 percent inclusive of two percent intermediary tax and one percent bank charges, the same with sugar beans," he said.  

Starting next Monday, Mr Musarara said GMAZ will deploy price monitors across the country to monitor prices of basic commodities with a view of protecting consumers from being short-changed by unscrupulous retailers. This follows a Memorandum of Understanding GMAZ signed with Confederation of Zimbabwean Retailers where they agreed on a model pricing system of basic commodities.

"We are not pushing for a price control. We are simply saying from the maximum price that we shall give you (retailers and wholesalers), the maximum you should mark-up should be 10 percent.

"For example, our current price, which of course, prices are going to change soon is a maximum of RTGS$10,50 per 10 kilogrammes of roller meal and therefore, if you put the 10 percent, plus 2 percent (intermediary tax) and 1 percent (bank charges), we don't expect the price of a 10kg roller meal to be more than RTGS$11,85," he said.  

Mr Musarara acknowledged concerns that some retailers particularly in the border towns such as Plumtree were selling in forex. During a question and answer session, some complained that suppliers of packaging material were selling their products in foreign currency.

Mr Musarara said Government was seized with the matter and it was their hope that it would be addressed soon. He said the engagement initiative was aimed at building trust and confidence from a staple food distribution perspective.

"It's important that we try by every means to avoid the incidents of 2005/6 where there were price controls, where millers and retailers were blaming each other on who is increasing the prices, where Government as a third party would come in and tell us what our product must cost," he said.

Mr Musarara noted that when one of the players within the milling value chain committed what Government does not like, the policy interventions were always not in favour of all stakeholders.

"I don't think it was the Government's intention to fund Silo industries and open shops. But I guess it is a response to a situation, so all of us are in the same boat, Government will never get broke before you get broke. We need to do what is responsible, what is good for the consumers and in a manner that leaves us viable," he said.