Millers mull dumping local manufacturers

HARARE - Millers are considering dumping local producers of packaging material in favour of foreign manufacturers, after the indigenous players significantly increased their prices, with some demanding payment in US dollars.

In a statement, the Grain Millers Association of Zimbabwe (GMAZ), said if the local manufactures fail to take heed of the call to review the prices downwards, they will lobby the government to supply them with foreign currency and buy the packaging outside the country.

This comes after millers and manufactures met in Harare recently to find a lasting solution that will be fair to both consumers and suppliers.

GMAZ media and public relations manager Garikai Chaunza said the milling industry cannot be compelled to pay for the packaging material in foreign currency as it cannot charge its products in forex. 

“The milling industry will support local packaging companies should they rescind their decision to sell in foreign currency and revise downwards their local prices payable in RTGS. However, should this fail, local millers will lobby government for foreign currency allocation and procure the packaging materials from foreign suppliers’ duty and VAT (value added tax) fee, whose prices are way much lower than those of local manufacturers,” Chaunza said.

He however, said so far three major packaging companies have since cooperated with the millers’ request and that GMAZ will give these firms full support.

“Negotiations with three big packaging companies are being concluded so that the prices of rice, maize meal and flour remain stable,” he said.

The current negotiations comes after packaging material manufacturers increased prices of their products by over 500 percent, which in turn saw a surge in the prices of maize meal, flour and bread.

In some supermarkets, a 10kg packet of maize meal which was going for $5,50 has significantly increased to between $9 and $9,20.

In terms of the new pricing system for the packaging, the plastic for a loaf of bread was increased from three cents to 22 cents, while that for a five kilogrammes (kg) a packet of maize meal was increased from 20 cents to 37 cents, 10kg from 37 cents to 60 cents, 20kg from 40 cents to 89 cents, while a 50kg container was increased from 56 cents to $1,20.

According to GMAZ, polypropylene which was initially being sold at $1,34 in bond note or RTGS is now US$2, 76, while laminating plastic which was $2 per 5kg is now costing $6 per kg.

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