The Association of Master Bakers and Caterers of Nigeria has assured the public that it will not increase the price of bread nationwide.
Mr Jacob Adejorin, South-West Vice Chairman of the association, gave the assurance in an interview with the News Agency of Nigeria (NAN) in Lagos on Thursday.
“We have been receiving calls from different parts of the country based on radio, television and newspapers’ reports that bread makers will increase price of bread and also embark on a nationwide strike from Sept. 24.
“We Master Bakers are disassociating ourselves from such plan. Although, we acknowledge the concerns of stakeholders about the high cost of production inputs that is reducing profit margin and crippling businesses of bakers nationwide.
“In spite of these challenges, we are assuring the public that price of bread from us will not increase and we will continue to ensure highest standard in our production process,” he said.
Adejorin, who is also the Lagos State Chairman of the association, urged the Federal Government to review the issues inhibiting the growth of bakery industry and create a conducive environment for businesses to thrive.
NAN reports that the Premium Breadmakers Association of Nigeria (PBAN) had on Sept. 11 warned that price of bread may rise by 90 per cent due to increase in basic baking ingredients in the country.
Speaking on the issue, Mr Emmanuel Onuorah, Publicity Secretary of PBAN, told NAN that it was true the association intended to increase bread price but debunked the reports about the proposed strike.
“We do not have trade dispute with the Federal and State Governments; neither are we at loggerheads with anyone.
“We are not going on strike. We are not shutting down production,’’ he said.
Onuorah noted that the challenges faced by bakers was due to the incessant increase in the prices of baking ingredients that had rendered most premium bakeries comatose and operating at a loss.
According to him, between 2015 and 2018, the price of flour increased from N6,500 to N11,500 per 50 kilogram bag, while sugar had 77 per cent rise in price within the same period.
He said that salt, margarine, yeast, preservatives and improvers used in enhancing the quality of bread had recorded 84 per cent, 67 per cent, 112 per cent, 45 per cent and 160 per cent increases, respectively.
Onuorah added that the price of diesel, which most factory used to power their generators for production also increased by 57 per cent, while the price of bread had only witnessed 11 per cent rise within the period.
“Most bakers are running on negative margins as we have been subsidising bread for Nigerians and we cannot afford to do that any longer.
“Most of us got loans with double-digit interest rates from financial institutions to fund our bakery projects and are finding it extremely difficult to meet our loan repayment obligations,” he said.
Onuorah urged the Federal Government to review downward the 15 per cent levy on wheat grain imports to help drive down the price of flour, which constitute about 75 per cent of baking ingredients.
“We believe that a reduction in the 15 per cent levy on wheat grain by the government, will lead to a substantial reduction in the price of flour by millers,” he said.
Onuorah also urged the government and the Federal Inland Revenue Service (FIRS) to clear the ambiguity in the tax law on whether premium bread was part of “basic food items’’, exempted from Value Added Tax (VAT).
“To our understanding, Part 1, Paragraph 2 of the first Schedule of the Value Added Tax Act exempts certain goods including ‘basic food items’ from VAT.
“However, the Act does not define basic food items.
“In reality however, producers of premium bread over time, had been made to pay VAT, penalised or threatened for not paying VAT on bread.
“We, therefore, demand that the Federal Government and the FIRS look into this as a matter of urgency in order to clarify this ambiguity,” he said.
Onuorah said that over 700,000 people were employed directly and indirectly in the premium bread sub-sector, adding that addressing the critical challenges would ensure sustainable food production and economic growth.
NAN reports that currently, a loaf of bread containing 20 and 25 slices costs N250 and N300 respectively, while the jumbo size (not sliced) sells for N450 or N500. (NAN)