Wholesalers are hard put to deny accusations by suppliers of food relief hampers that they are out to profit from poverty by hiking prices in the course of the lockdown, SESUPO RANTSIMAKO reports
Suppliers in Francistown say wholesalers are taking advantage of increased demand driven by bulk purchases of COVID-19 food relief hampers to hike prices.
Some of the suppliers have told The Botswana Gazette that wholesalers have ignored the government’s caveat against raising food prices because they are eager to profit from poverty.
The suppliers contracted by City Council of Francistown consist of supermarkets, general dealers and fresh produces. They showed this publication receipts for 12.5kg maize-meal increasing from P61.00 to P68.00, a 10kg bread flour from P74.00 to P89.00 and 10kg sorghum meal from P60 to P68 in a matter of two weeks. A crate of 20 pints of milk went from P135 to P156 while 5kg Tastic Rice went from P72 to P79.
This is in spite of a warning by the Minister of Investment, Trade and Industry, Peggy Serame, to businesses against hiking prices of essential goods and basic food items in the advent of COVID-19. In her warning, the minister said action would be taken against businesses that ignored her.
Wholesalers are nevertheless hiking prices, according to suppliers who complain that they are squeezed for mark-ups. The products affected are mainly staples like maize-meal, bread flour and rice.
One supplier said: “The challenge we are facing is that while the wholesalers keep on hiking prices, our initial prices remain stagnant for the entire period of food relief. We have noticed that the high demand has significantly affected the supply chain. Sometimes we have to wait several days before we get what we want from the wholesalers because they import from South Africa.”
But at Botswana’s biggest chain supermarket, Choppies, Group CEO Ramachandran Ottapathu says they have not experienced any major increase in business or supply chain disruption.
On the other hand, Finance Director at Sefalana, Mohamed Osman, says the wholesale has experienced a rise in demand that started long before the lockdown because of panic bulk buying that continued until a day before the lockdown.
According to Osman, this resulted in many homes having adequate food for at least a week because demand rose again a week into the lockdown. “We then had a surge in food donations by various institutions, which again resulted in an increase in demand in week three and four,” he said. “Demand was particularly high for maize meal, sorghum meal, milk and other essential food items.”
According to Osman, the Sefalana Group had anticipated the increase in demand and stockpiled its warehouse before the lockdown. “In fact, we increased production at our maize and sorghum milling plants to help meet the requirements of the consumers and the food relief donors,” he told The Gazette.
“To maintain our original prices, we secured large South African currency at favourable rates in advance of the lockdown to help keep overall cost down. This has helped us avoid having to pass on the price increases to customers. Besides that, we introduced a number of combo deals that give customers best value for money.”