Unga Ltd’s #ticker:UNGA top-selling maize flour Hostess is back on the shelves after an eight-month absence. The return follows millers’ fresh purchase of local grain from farmers and heralds end of subsidised flour.
The brand, popular with the middle class, hit the shelves this week after customers had been forced to use cheaper alternatives following a sharp decline of maize stocks in the country that saw the miller halt its processing.
A two-kilogramme packet is currently retailing at Sh154 in supermarkets around Nairobi from Sh148 in May.
“We have resumed milling of Hostess and we are using the maize that we are procuring from farmers and traders,” said Nick Hutchinson, chief executive officer of Unga.
Unga in July said it had stopped processing Hostess because of the subsidised maize from government, which required millers to sell flour at Sh90 for a two kilogramme packet under the programme.
“Because of the subsidy programme, government wanted us to focus on the mass market with available stocks of market and not the specialty one, that is why we stopped milling Hostess,” he said
Millers have started buying maize from farmers as they prepare to exit subsidy at the end of this month.
They get subsidy maize from government at Sh2,300 per 90 kilogramme bag but they are procuring the same quantity from farmers at Sh3,000, meaning expensive brands cannot compete.