Flap over flour

Tuesday, 19 April 2011 00:33 - - {{hitsCtrl.values.hits}}

By Shezna Shums

The All Ceylon Bakery Owners’ Association said that they had been informed by Serendib Flour Mills Company that the price of a kilo of flour would be increased by Rs. 3 from 15 April and following threats of legal action against the company for the unauthorised price hike by the Consumer Affairs Authority, release of flour to the market at the revised price was being withheld.

The Serendib Flour Mills Company CEO, Sathak Abdul Kadar contacted by the Daily FT for a comment said that he would be able to comment on the situation only today (19).

The Consumer Affairs Authority Chairman, Rumy Marzook said that legal action would be taken against the company if the price of flour is increased by Rs. 3 per kilo without the approval of the CAA.

“The company in question is alleged to have raised the price of a kilo of flour without the authority of the CAA. So far we have not given any permission for this price revision,” said Chairman, CAA, Rumy Marzook. He further stated that the Legal Department of the CAA would take appropriate steps in this direction.

Further inquiries revealed that the CAA was looking into this matter with a view to taking legal action against the company if the price of flour as alleged had been increased. Price revisions/ increases could normally be done only after a request for same is approved by the CAA. However in this instance no such request has been made to the CAA by the company. The Ministry of Internal Trade and Cooperatives too confirmed that legal action will be taken against the company if it had unlawfully raised the price of flour. “Before a company makes a price increase, it has to obtain the permission of the CAA,” said Media Spokesperson, Nipuk Ekanayake. “We have not given permission for this increase,” he added.

Meanwhile the All Ceylon Bakery Owners’ Association, President, N.K. Jayawardena said that the price of flour based products have so far not been increased and that currently there were no plans to increase prices.” The amount of flour supplied by this company is not creating a huge impact on us, he explained. “However if Prima were to increase its prices then it will create a problem for us and we will be compelled to increase our prices. The prices of our products are the same and there has been no change,” he stressed.

The All Ceylon Bakery Owners’ Association has a total membership of 1000 bakery owners.

Some of the products that require CAA’s permission for price revisions are flour, chicken, LP gas, full cream milk powder and cement.