Sept 19, Colombo: Sri Lanka' largest association of bakers have announced on Wednesday that they are ready to slash bread prices back to previous levels in support of the government's efforts to help the consumers, Minister of Industry and Commerce Rishad Bathiudeen said.
The bakers, after in-depth discussions with the Minister, also called for liberalization of domestic flour market so that even bigger gains could be passed down to the market.
More than 70 percent of annual flour imports to Sri Lanka are absorbed by the bakery sector which uses a considerable amount for making bread loaves.
President of the All Ceylon Bakery Owners' Association N K Jayawardena, who led a team of leading bakers for discussions, said they will reduce bread prices by Rs 5 island-wide as soon as flour producers and millers slash their supply price by Rs 5.
Two weeks ago the Consumer affairs Authority (CAA) began receiving reports of bread price increase by Rs 5 per loaf. Thereafter wheat flour milling firms too, arbitrarily and unilaterally and without the permission of CAA, increased their supply price by Rs 5 per kilo.
Minister Bathiudeen has issued strict directions to CAA to take immediate legal measures and proceed with court filings against all flour millers and suppliers who hiked their wheat flour price by Rs 5 as it was without any due authorizations. Minister Bathiudeen has urgently called for a report from CAA on the latest developments on wheat flour and instructed the officials to clarify if any urgent amendments to the CAA Act is required to proceed. He has called CAA to commence legal action by latest on 20 September.
"We too like to give bread at a lower price of Rs 60 per loaf to our consumers so that it will help our sales. We are compelled to increase prices mainly due to flour price hike. We will reduce bread prices by Rs 5 island-wide as soon as flour producers and millers slash their supply price by Rs 5" said ACBOA's Jayawardena.
He also requested the government and the Ministry to allow them to import flour on their own, preferably without the prohibitive import taxes. He said that if they can import on their own they can supply bread to the market at a price even lower than Rs. 60.
Minister Bathiudeen welcoming ACBOA's support to consumers said the government and CAA wants to safeguard the consumer.
"We request ACBOA to reverse the price increase as a supportive measure so that consumers are not burdened. We have not allowed flour millers to increase prices. CAA has in fact requested the millers and suppliers to reduce their supply price and not to be monopolistic," the Minister said.
He promised to immediately discuss the bakers' request with higher levels to liberalize the local flour market so that the consumers have a choice on flour.
"I have also called for a report from CAA on the latest developments on flour and we are ready to commence legal action by latest on 20 September on errant parties. The CAA will start raiding any retail or wholesale seller who violates the pre-determined flour sale price in the domestic market," the Minister stressed.
CAA's Gazette (1975/68) published on July 14, 2016 specifies a controlled (market) price for wheat flour at Rs 87 per Kilo. Any flour producer, supplier, distributer, trader or seller cannot exceed this price when selling to the final consumer. Even though producers and suppliers do not directly sell to the consumer, they are required to work backward from this final determined price of Rs 87 to structure and adjust their supply price point-always.