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Bakers turn to the courts
The Financial Gazette (Zimbabwe)
June 22, 2006

BAKERIES might seek a court order to suspend the gazetted prices of bread in the wake of the arrests of their merchandisers and the confiscation of over-priced bread that has spurned serious shortages of the product.

Industry sources said the National Bakers Association (NBA) is seeking legal advice before mounting a court challenge that might signal the breakdown in price negotiations between bakeries and the state.

Members of the NBA hiked the price of bread by at least 52 percent this month, citing exponential costs of flour and diesel among other things.

A standard loaf of bread is now selling for $130 000 against the gazetted price of $85 000.

President Robert Mugabe’s populist government, fighting its worst economic crisis, has responded by issuing tickets worth millions of dollars to non-compliant retailers, seizing bread and arresting their merchandisers.

Instead of pushing the price of bread down, the state’s heavy-handed response has caused nation wide shortages, giving rise to a thriving parallel market of the product.

"Bakeries have found themselves in a catch-22 situation whereby the company laws do not allow directors to operate at a loss," said a representative of the BAZ.

"At the same time, there is the government gazette with unrealistic prices. All we want to do is to prove to the courts that there is no way we can sell at these unviable prices," added the source.

At least 50 bakeries have closed shop since the beginning of the seven-year-long economic crisis that has reduced the one-thriving Zimbabwean economy from being a breadbasket into a basket case.

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