On Tuesday, talks between the Bakers Association and the government resumed, where the price of Maltese loaves was discussed. In the meeting between Minister for Competitiveness Censu Galea and members of the association, bakers declared they are no longer ready to cover additional expenses following the rise in the price of paraffin and flour. They are demanding the government to issue a written guarantee to refund the additional expense of Lm 0.02c (2 cents) per loaf baked.
Bakers are claiming the cost to produce one loaf of bread has risen by at least Lm 0.02c (2 cents) following the increase in the prices of both flour and paraffin. This has led bakers to threat to raise the price of loaves independently, in spite of the fact that the Maltese loaf price is controlled by the government.
Bakers have insisted that it is becoming harder to continue covering additional costs. Last August, following a rise in the price flour sacks by 56c, bakers negotiated a Lm0.01c (1 cent) increase in the price of the large Maltese traditional loaf. The new price of the loaf was set at Lm0.17c (17cents).
On the other hand flour importers Federated Millers plc stated that the government should no longer intervene in the setting of flour prices and claimed that the government should have liberalized the concerned market on Malta’s accession to the European Union (EU). “The price order is obsolete," a spokesman for the millers said, adding that “the price of flour is set according to the supply and demand for wheat on the international market”.
Timesofmalta.com also explained how the Federated Millers had written to the government in September, and subsequently in October, stating the price of flour would have to increased by November. "The government did not do anything except tell us that we would be breaking the price order by raising the price of flour," the spokesman said.
Federated Millers is made up of seven millers. Before Malta’s accession to the EU wheat was bought from the government-owned company, Medigrain, which was dissolved prior to Malta joining the bloc. To do well for variation in the price of wheat, the government used to subsidize millers through the Price Stabilization Fund.
See also:
Price of Maltese bread loaves increases by one cent
By Ruth Davies
Aug 3, 2004, 19:26 CET
Price order on Maltese bread might be dropped
By Ruth Davies
Aug 31, 2004, 14:56 CET
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