FULL TEXT: 'Bread Cartel Should Be Broken'

The National Consumer Rights Association (NACORA) has called for an investigation of the country’s three main bakeries, Lobel’s, Bakers Inn and Proton.

NACORA accuses the three bread producers of colluding to increase the price of bread while at the same time selling poor quality products. Below is the full statement by NACORA:

The pricing of bread is Zimbabwe is extremely uncompetitive. Besides the generally very poor and hostile economic environment and the prevailing culture of speculative, this collusive behaviour is resulting in high and higher prices and very poor products that in the process rob consumers of value for money.

The existence of an illegal bread cartel cannot be ruled out. We believe, upon information and behaviour, that the triumvirate of the big three, namely Lobel’s Bread, Bakers Inn and Proton, with an inner circle of big supermarket cousins, are directly and indirectly jointly manipulating and colluding to fix the price and supply of bread, thereby hurting consumers.

We, therefore, call upon the Competition and Tariff Commission to expeditiously and thoroughly investigate how in particular Lobel’s, Bakers Inn and Proton continue to almost always raise the price of bread at the same time and by the same amount of money despite differences in quality, weight and other cost-driving variables.

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There is clearly under-the-radar mafia-like co-operation and information sharing that result in coordinated and uniform price increases. A more comprehensive investigation is needed this time around.

In addition, the Competition and Tariff Commission should investigate the role of big supermarkets in this pricing cartel.

However you look at it, the supply and pricing of bread are characterised by unfair prices, materially restrictive features and uncompetitive behaviour in contravention of the Competition Act [Chapter 14:28].

Lobel’s Bread, Bakers Inn and Proton, together with large supermarkets that retail Lobel’s, Bakers Inn and Proton bread and their own bread, have substantial or near total control over bread and as a result, there is a high level of market concentration.

This situation is worsened by the fact that some of these actors are vertically integrated allowing them freedom of unlawful conduct.

We, therefore, believe there is both a legal and factual basis to sustain an investigation into allegations of violations of the law.

Bread is central to the food and nutritional security of households and therefore the collusive and unfair pricing of this commodity is deeply hurting to consumers. More competition, and not less is in the public interest.