Time to Break the Bread Cartel

The pricing of bread in Zimbabwe is extremely uncompetitive. Besides the generally very poor and hostile economic environment and the prevailing culture of speculative pricing, this collusive behavior 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 behavior, that the triumvirate of the big three, namely, Lobel’s Bread, Baker’s 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, Baker’s 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 cot driving variables. There is clearly under-the-radar mafia-like cooperation 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 the pricing cartel.

However, you look at it, the supply and pricing of brad is characterized by unfair trade practices, materially restrictive features and uncompetitive behavior in contravention of the Competition Act [Chapter 14:18]. Lobel’s Bread, Baker’s Inn and Proton, together with large supermarkets that retail Lobel’s Bread, Baker’s 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.

Source: National Consumer Rights Association (NACORA)

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