Flour on CAA’s face as Prima, Serendib increase price

Wednesday, 20 April 2011 00:24 - - {{hitsCtrl.values.hits}}

By Shezna Shums

Despite a warning by the Consumer Affairs Authority (CAA), Prima and Serendib increased the price of flour with effect from yesterday without the prior approval of the CAA.

Serendib Flour Mills has increased the price of a kilo of flour by Rs. 4.12 while Prima Ceylon Limited has hiked the price of flour by Rs. 4.10.

Speaking to the Daily FT, Sathak Abdul Kadar of Serendib Flour Mills Ltd. said “We have increased the price of a kilo of flour by Rs. 4.12, as Prima has increased the price of flour by Rs. 4.10.”

“Now we are waiting for action to be taken and are also waiting to be summoned to discuss this issue with the relevant authorities,” he explained, further adding that Serendib Flour Mills had sent a letter to the Consumer Affairs Authority informing it of their move to increase the flour price. He added that Serandib Flour Mills had not requested CAA’s prior approval for the price hike.

“We did not get approval but we are increasing the price, to be on a level playing field,” Kadar said.

Previously too the company had increased flour prices, and this had been done without any permission from the CAA.

“We are waiting to have discussions with the relevant authorities on flour prices within the next few days,” he stressed.

Rumy Marzook, Chairman, CAA said that the two companies had increased the price of flour without permission from the CAA which was in violation of Section 18 of the Consumer Affairs Act. “I have advised the legal department to take appropriate steps to prosecute the two companies,” he added. He further stated that this could not be done within a few hours, but would be done according to the law.

All Ceylon Bakery Owners’ Association has sent a letter to the Ministry of Internal Trade and Cooperatives yesterday requesting a meeting with the minister to discuss the current issue. The Association had however not received a response yet.

Meanwhile it is learnt that Minister Johnston Fernando is presently out of the country.

All Ceylon Bakery Owners’ Association Chairman, N.K. Jayawardena also quipped that no decision had been made to increase the prices of flour based products. However he said that such an increase did not necessarily have to be approved by the Ministry.

Generally when the price of bread increased the Association had noticed a slight decline in the demand for bread Jayawardena said. However he did not rule out the possibility of the prices of flour based products increasing following the hike in flour price.

Jayawardena observed that there had always been a decline in bread purchases whenever the price of bread increased following an increase in the price of flour or LP gas.

According to the CAA there is price supervision and intervention on price increases of certain specified essential commodities .This is basically implemented through Section 18 of the Consumer Affairs Authority Act. No. 9 of 2003, which became operative from 17 March 2003

Prima sells a kilo of wheat flour for Rs.84 and with the new increase in price, it will cost over Rs.88.