Lebanon Businessnews News
 

More subsidized flour for bread production
Cabinet appeases bakeries, avoids strike
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The Cabinet has decided to extend its subsidy on the prices of wheat flour by one month till the end of April. Throughout this period, the amount of subsidized flour for bakeries will be increased to 20,000 tons, up from 18,000 tons per month previously.

This measure succeeded in deterring a strike planned by bakery owners who were complaining that their stocks of subsidized flour were starting to run out due to a surge in demand. The local market's monthly consumption used to be around 21,000 tons. “The increasing number of Syrian refugees led to an increase in monthly consumption to 24,000 tons,” said Riad Al Sayed, Head of the Syndicate of Owners of Bakeries.

Bakeries currently pay $390 for one ton of subsidized wheat flour used for making traditional Arabic bread. The price of unsubsidized wheat flour is $520 per ton.

Many bakery owners have repeatedly said they were against the subsidy policy. Hashem Koussa, Managing Partner at Malco Group, owner of Pain D’or bakeries, said: “This subsidy policy benefits all social classes, both rich and poor, while it should go only to low-income families which need it most.” He said it would be better if the Cabinet supported impoverished families directly, through increasing the family compensations for instance.

Koussa called for ending the subsidy scheme for wheat flour in order to allow for supply and demand to be rebalanced. He said the State’s role should be limited to consumer protection through supervising the quality and quantity of the bread produced.

The Syndicate of Owners of Bakeries had proposed cancelling the subsidy and raising the price of the traditional white bread pack to LL2,000 (up from LL1500 currently) while increasing its weight to 1,100 grams from the current 900 grams.
Reported by Rania Ghanem
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Date Posted: 1/3/2013