Millers now say new maize flour prices are illegal
A shopper compares the prices of the different brands of maize flour at a supermarket. FILE
What you need to know:
Cereal Millers Association chairman Diamond Lalji said it was illegal for retailers to increase flour prices.
He said millers were still selling the products without the new 16 per cent tax.
Some retailers in Nairobi are selling a two kilogramme packet of wheat flour at Sh110 from Sh105 last week.
Millers have accused retailers of profiteering from the new Value Added Tax Act, saying the prices of maize flour should not have been increased.
Cereal Millers Association chairman Diamond Lalji said it was illegal for retailers to increase the price of the products, which millers were still selling without the new 16 per cent tax.
“I am surprised that some of the retailers have increased the price of flour. There is no justification for this given that millers are yet to increase their prices,” says Mr Lalji.
Some retailers in Nairobi are selling a two kilogramme packet of wheat flour at Sh110 from Sh105 last week, saying they were responding to adjustments by distributors.
“The distributors are selling us a bale of flour at Sh1,150 currently from a low of Sh1,050 last week. The only way to recover the cost is by passing it to the consumer,” says Helen Wanjiru, a retailer in Nairobi.
Mr Lalji said millers were buying maize at between Sh2,500 and Sh2,800 per 90-kilogramme bag, which was prevailing before the introduction of the 16 per cent levy on September 2.
“We expect to maintain our prices as the buying price of maize remains the same. Retailers should not take advantage of the transition to exploit consumers,” Mr Lalji said.
He said the competitive nature of the market would check against price increases of more than Sh5 per kilogramme of flour.
“Miller want to retain customers. Hiking the price by more than that would definitely see them lose out if their rivals increase by a small margin,” he said.
Mr Lalji says the inflow of maize from the East African Member countries and the onset of harvesting in South Rift have kept the prices of maize stable.
Maize is in the list of the items that have been exempted from VAT, but millers say they will eventually pass the cost to consumers because they can no longer claim refunds on transportation expenses as was the case when the commodity was zero-rated.
