Bakers Drop Bread Price by KSh. 5 as Competition Stiffen

By Getrude Mathayo / Published July 23, 2021 | 1:09 pm




KEY POINTS

The price of bread in the in-store bakeries has been cheaper by an average of 5 shillings since April when rival bakers raised their prices.


bread

Kenyans have something to smile about after bakers were forced to reduce prices of bread by 5 shillings amid stiff competition by supermarkets in-store bakeries.

The stiff competition is hurting their profit margins, which has been worsened by the prevailing high global cost of wheat.

The price of bread in the in-store bakeries has been cheaper by an average of 5 shillings since April when rival bakers raised their prices in a fresh attempt to pass the additional cost in the price of wheat to consumers.

Producers such as Festive Bread, Super loaf and Broadways have in the recent past lost revenue in a brief price war with in-house bakeries across Kenya’s supermarkets.

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Currently, A 400-gram loaf of Bread is currently retailing at 50 shillings down from 55 shillings with 800 grams selling at 92 shillings from 100 shillings.

This is the second time that bakers have been forced to review the price downwards since the beginning of the year.

Supermarkets maintained the cost of in-house baked bread at Sh50, offering consumers a cheaper option. There have been about three reviews on the cost of bread since January, but supermarkets maintained the cost of in-house baked bread at Sh50, offering consumers a cheaper option.

Most supermarkets across the country bake their bread, which they sell alongside those from other bakers. Processors attributed the increase the first in four years to the high cost of wheat flour and other ingredients such as cooking oil.

In January 2021, the price had gone up by the same margin, but bakers were forced to beat a retreat after getting stiff competition from supermarkets, which maintained a lower cost on their in-house brands.

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The Finance Bill 2021 proposed the introduction of a 16 percent duty on bread effective July this year should it be adopted, reversing the current trend where the commodity enjoys a zero-rated status.







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