Bread, big business, big players

Bread has become one of the staple foods in Nigeria and one of the most commonly consumed in the pastry industry. As a result, the bakery industry has been experiencing an influx of big players, especially the operators of fast foods; however, this has not reduced the price of bread. On the contrary, price continues to rise.

Bakers who spoke to NEXT on Sunday argue that price cannot be reduced in view of the high cost of production due to Nigeria's peculiar economic environment in contrast with its neighbouring West African countries, where the price of the commodity is much cheaper.

Price of bread

The prices of bread vary according to the size and quality of the loaf and the baker. As such, price ranges from N50 to N500 and above.

The higher prices are associated with the big players, such as Mr. Biggs (of UAC), Valu (of Leventis), Big Treat, Sweet Sensation, UTC bread, Butterfield, and the like.

The Managing Director, Jephson Foods Nig Enterprises, Iwaloye Taofik, speaking on why price remains high, says, "Nigeria's economy is sliding and nothing is improving in the manufacturing and production sector because lack of power supply is increasing the cost of production and almost grinding the economy."

He adds that the high cost of production is forcing small bakers like his company to consider relocating to Ghana where the power supply is more stable.

Yinka Afolabi, another baker, says the high cost of baking ingredients also contributes to the high cost of bread. "Apart from the high cost incurred from generating your own power, baking ingredients such as flour, industrial sugar and yeast are quite expensive.

"Also, although flour is produced in the country, most of the ingredients used in its production such as wheat are not planted in the country but imported and all this have an indirect cost on the bakers."

The chairman, Lagos state chapter of the Association of the Master Bakers and Caterers of Nigeria, Lateef Oguntoyinbo, decries "The incessant increase in the price of flour and baking ingredients is making it difficult for us to operate and that means we have to keep passing the cost to the consumers."

Recent price increase

Some of the big bakers like UAC recently increased the price of its bread from N200 to N220 for the family loaf.

A manager in one of the Mr Biggs' outlet, who did not want to be named, says that the move was to serve customers better, adding: "People are in business to make money and will not like to run at a loss. Prices are increased so the company could maintain its quality and standard of production.".

However, Mr. Afolabi notes that the master bakers have nothing to do with the recent price hike. "We have always alerted the public when we want to increase the prices. There are standard bread sizes which are meant to be sold at agreed prices and the baking pans are usually of equal sizes to reduce confusion. But the big bakeries can also increase their prices at will because they are not members of the association and they produce special bread," he says.

The Competition

Because bread has become a staple food, there is a market for all types of players-big, small or medium bakers.

Mr. Iwaloye notes that every baker faces similar challenges except that the big players are better able to handle the challenges in view of their access to bigger funds.

But the types of bread people buy are based on the class they belong to. Those in the middle class and above would rather buy the big labels where they can trust the quality and baking under high hygienic conditions, while people of lower class go for the popular "Agege bread" and the like.

On the suspicion that some bakers still use banned substances such as potassium bromate and saccharine to cut down production costs, Mr. Afolabi says that the entry of the big players has reduced the use of these substances greatly, even though they are cheaper than the NAFDAC approved ingredients like yeast and sugar.