Bread price set to increase again

Government is unhappy with the bread price hike after Tiger Brands was found guilty of price fixing

The country's biggest bread producer, Tiger Brands, has warned that the bread price will go up again in the next two months.

Tiger Brands is the biggest baker of bread in the country - it's also the most controversial. A few months ago, the Competition Commission fined the company R99 million for fixing the price of bread illegally. Other bread makers have also been implicated and investigations are continuing.

The company says it doesn't have an option but to hike prices in quick succession this year, mainly due to the escalating costs of wheat and petrol. However, according to the company's own breakdown on a loaf of white bread, baking is by far the major cost factor and not wheat and transportation.

The hefty price hike has been widely criticised. But the company dismisses the public outrage as emotional.

"The price increase is also to maintain employment. So which one is a better devil - to retrench a whole lot of people so that you can push down your labour costs, or cause more poverty and frustration to the poor?” asks Jimmy Manyi, from Tiger Brands.

Government takes dim view of price hikes
Meanwhile, government has slammed the move.

"We are deeply concerned about this latest increase in the price of bread, particularly as it comes after these companies have been found to have engaged in illicit price fixing. So the price of bread as it stands has been determined on the basis of illegal behaviour," says Tshediso Matona, the Director General of the Department of Trade and Industry.

The department wants the Competition Commission to get to the bottom of the matter and has promised to take harsh action if bread companies are found guilty of improper conduct again.

The government has also announced that it is reviewing import tariffs on wheat and flour -- a move that some see as a response to rising bread prices.