The South African Food Sovereignty Campaign and the Consumer Action
Network have accused food manufacturers and retailers of artificially
inflating the price of bread in the country.
In what it calls “blatant profiteering”, the groups said in an open
letter to the ministers of finance and trade and industry that bread
makers in SA were blaming rising bread prices on an increase in the
tariffs on imported wheat.
However, grain farmer association, Grain SA, has stated that the new
import tariff on wheat is not expected to result in higher bread prices.
Grain SA has also questioned why the price of bread has not fallen
since January 2015 in line with the low international wheat prices.
GrainSA said that the price of wheat last year was at a record low
and manufacturers did not pass this on to their customers – while
millers and manufacturers claim that the price of bread is ultimately
set by the major chains and not by them.
Research compiled by Viccy Baker of Retail Price Watch shows how bread prices have increased over the past 12 months.
According to Baker, bread prices have already risen significantly in
2016, when looking at the average price of 700g brown loaves of bread
across four brands.
Bread prices – 2015 vs 2016
||Q1 2015 vs Q1 2016
||April 2016 vs Q1 2015
Sunbake (made by Foodcorp) increased its price from
the first quarter of 2015 to the first quarter of 2016 by 7.4%, with a
further jump of 5.4% in April. A loaf that cost an average of R8.94 in
the first quarter of 2015 now costs R10.12.
Sasko (Pioneer Foods) increased its price in Q1 2016
from Q1 2015 by 7.1%, and then again by 2.8% in April. A loaf that cost
an average R9.30 in the first quarter of 2015 now costs R10.24.
Blue Ribbon (Premier Foods) increased its price by
5% over the same two periods, but the price in April was 8.38% higher
than in the first quarter of 2016. A loaf that cost R9.66 in the first
quarter of 2015 now costs 10.99.
Albany (Tiger Brands) the most costly of the four
for a standard loaf, increased from the first quarter of 2015 to the
first quarter of 2016 by 7.5%. By contrast, the average price dropped by
2% in April. A loaf that cost R10.46 in the first quarter of 2015 now
costs an average R11.02.
“Brown bread is something of a commodity, and many consumers tend to
buy the cheapest they can find on the shelves. As a result, the lower
priced brands are quickly exhausted and people who can least afford it,
are forced to pay higher prices,” Baker said.
“GrainSA says there is no reason why increased import tariffs on
wheat should raise the price of bread. Millers say they have little
influence over the price of bread. According to the SA Institute of
Chartered Accountants, the government zero rates VAT on brown bread ‘to
benefit the poor’. Yet the price keeps on rising.”