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NIPC cuts illegal deals with manufacturers

THE National Incomes and Pricing Commission (NIPC) is illegally cutting deals with manufacturers to allow them to sell their commodities above the gazetted prices. Businessdigest can reveal that the NIPC, which is empowered to control prices of all products and services, has been doing side deals with bakeries to allow them to sell bread at higher prices which are not gazetted by the commission. The NIPC’s prices list approved on February 9 states that a loaf of bread should cost $200 000 but the commission privately allowed bakeries to sell at $3,3 million.

Companies in this deal include Lobels, Kinbran, Mitchell, Proton and Superbake. The list also includes smaller bakeries.

The NIPC has also allowed millers to sell maize-meal at prices way above those gazetted. The commission privately allowed millers to sell a 10kg bag of mealie-meal for $9 million even though the approved price is $152 400.

“The prices on the list are not the ones that the producers are charging, we are aware of that because we had an agreement with them but the agreement is only confined to bread and mealie-meal,” said an NIPC commissioner.

Bread and mealie-meal are all controlled products whose prices have to be approved by NIPC in consultation with the cabinet.

The cabinet did not approve the prices for mealie-meal and bread. In fact the applications for the price reviews on the two products will only be tabled in cabinet next week.

National Bakers’ Association, Vincent Mangoma, admitted that the association had a private agreement with NIPC to sell bread at $3,3 million per loaf.

Mangoma said the association was aware that the understanding with NIPC was illegal.

“The government has not gazzetted a new price because of political tension but as long as no one makes any noise they (government) will not do anything about it,” said
Mangoma.

“We as the National Bakers’ Association have made several applications to the ministry of Industry and International Trade through the NIPC and they have said to us ‘fine you can move from this price to that price while the application is still pending’,” said Mangoma.

“It is not an agreement but some form of understanding between the NIPC and us but the commission has said the prices we charge should not exceed $4 million but if the application is approved in cabinet then the price may be pushed up to $7 million.”

Businessdigest understands that the NIPC told the bakeries to charge $3,3 million but warned that they should be careful about it.

The NIPC’s official line to government is that the millers and bakeries are over-charging.

NIPC chairman, Godwills Masimirembwa said the commission had struck a “gentleman’s agreement” with millers and bakeries.

Masimirembwa said millers and bakers were only given a dispensation while their applications are pending approval from cabinet.

It is however understood that the “gentleman’s agreement” also applies to sugar which is one of the controlled products. Questions are now being asked on how many companies have managed to do such deals with the NIPC.

The disparity between the NIPC’s prices and those that are being charged by big corporates seem to suggest that there could have been more private deals.

For instance three chicken pieces at Innscor’s Chicken Inn are going for $49,5 million but the NIPC approved price is $13,8 million.

The news of such private deals is likely to trigger discontent among companies that are already bleeding due to price controls. The companies accuse the NIPC of failing to approve prices on time.–Jesilyn Dendere

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