Dilemma of Sh90 unga

Business Daily Kenya:  Nicholas Waitathu @PeopleDailyKe A section of retailers are staring at huge losses if they are unable to clear old ...

Business Daily Kenya: 

A woman looks at the price of maize flour in a supermarket following the new Sh90 price given by government for a two-kilogramme packet of flour. In many supermarkets in Nyeri prices remained high despite the government directive. The subsidy programme was launched on Tuesday to cool escalating prices that had hit Sh170 for a 2kg packet. Photo/PAUL WANJIRU

Nicholas Waitathu @PeopleDailyKe

A section of retailers are staring at huge losses if they are unable to clear old maize flour stocks as subsidised supplies start entering the market.

Some outlets, including supermarkets, yesterday confirmed that they could be left holding flour worth millions of shilling even as the Agriculture ministry set the record straight that the Government’s Sh6 billion subsidy programme does not cover old stocks.

Naivas Supermarket Managing Director David Kimani Mukuha told People Daily the retail chain has old stock worth more than Sh2.4 million which the retailer is at dilemma on how to dispense.

“By the time millers and government agreed on the subsidised flour pricing, we had stocks of more than 1,500 bales of 2kg packets. We are staring at a huge loss if we sell the product at subsidised prices,” said Mukuha.

However, Tuskys Supermarket had by yesterday morning stocked the subsidised flour with a limitation of three packets per customer. Attendants confirmed they were expecting more deliveries today.

At Uchumi Supermakets, an official confirmed the retailer had received subsidised consignments. But in Nairobi estates, a spot check revealed outlets were still selling old stocks.

Retail Trade Association of Kenya chief executive Wambui Mbarire said some retailers had old stocks, which they were grappling with as consumers insisted on buying subsidised flour.

“The challenge is how to dispense the old commodity in the midst of the new supplies under the subsidy programme started entering the market,” Mbarire told People Daily.

Mbarire said retailers with old stocks are in discussion with suppliers to arrive at an amicable solution. “Retailers can decide to sell the old stock at Sh90 though it will be at a loss and recovering from the loss will be a challenge,” she said.

On Tuesday, the government launched the subsidised maize flour programme to cool escalating prices that hit Sh170 for a 2kg packet. Under the subsidy programme, the government has partnered with 20 large- scale millers to produce and sell ‘Gok’ marked packets of 2kg for Sh90 and a kilogramme for Sh47.

The programme officially started yesterday but gave some reprieve to outlets with old stocks to clear them by weekend so that starting Monday consumers will only buy subsidised stocks.

Yesterday, Cereal Millers Association (CMA) attributed the shortage of the flour in some outlets to logistical issues. “Our members have had to adjust their distribution schedules and contractual obligations with particular supermarkets,” said CMA chairman Nick Hutchinson in a statement.

He said the flour is already available in a number of retail shops and kiosks countrywide plus in some supermarket stores like Tuskys, Clean Shelf, East Matt, and Uchumi stores.

“We expect all retail chains including Nakumatt and Carrefour to have the stamped stocks tomorrow,” he added. Contacted by People Daily, Agriculture Principal Secretary Richard Lesiyampe clarified that the subsidy programme does not cover the old stocks.

He said supermarkets with old stocks have up to the weekend to clear the commodity otherwise they will not be allowed to sell it at old prices . “It took us about 10 days to negotiate with the millers on the new pricing in order to save the consumers from further agony owing to their depressed purchasing power.

We expect no further arm-twisting of the consumer in the market. In the coming weeks the Government will facilitate availability of more maize to ensure quick production of the maize flour,” Lesiyampe said.

The post Dilemma of Sh90 unga appeared first on Mediamax Network Limited.

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