Concern on prices of bread

THE disconnect between inflation on bread and wheat is partially because some bread industry producers have not passed on price decreases.

"Inflation is generally measured on the most popular brand in store," Ian Visser, chief executive of Premier Foods, said yesterday.

According to Stats SA, the wheat price almost tripled from December 2006 to January 2008 and the price of bread increased on that.

Since then wheat prices came down, but bread prices have not.

Supermarkets are currently being investigated by the Competition Commission for their role in food prices.

The commission has fined various milling and bread producers millions of rand for anti-competitive behaviour.

Premier Foods, which manufactures and distributes Blue Ribbon bread, was the first milling company to co-operate with the Competition Commission in its investigation into price-fixing and collusion in the industry.

Visser said Stats SA uses the most popular bread brand as a basis for measurement against which to work out inflation on bread.

He said indications on the shelf currently shows that prices are in some cases already lower than last measured by Stats SA.