Lebanon’s Union of Bakeries Syndicate announced a decision to sell bread exclusively from bakeries, halting the distribution across the country as of Monday.
The decision came in response to Economy Minister Raoul Nehme, who refused calls to raise the price of the bread packs sold in shops in the wake of the sharp fall of the local currency against the US dollar.
While the Union attributed its decision to the rising dollar exchange rate and the scarcity of liquidity in the market, which incurs high production costs, its new decision will lead to the suspension of bread delivery to villages, rural and remote areas and those who do not have vehicles or other means of transport.
Moreover, this escalation came at a time when the government is taking measures to confront the coronavirus epidemic, including restricting the circulation of cars on specific days according to their plate numbers, which also hinders the possibility of daily movement.
The Union also announced that it was “not responsible for the overcrowding in front of bakeries” and the threat of infections this would entail.
In comments to Asharq Al-Awsat, Ali Ibrahim, the head of the Union of Bakeries Syndicates, said the decision came due to the “deteriorating situation and as the (exchange rate of the) dollar is getting out of hand.”
“There is no law that forces us to distribute bread,’’ Ibrahim said, adding that distribution represented 90 percent of their sales, explaining that they sell the pack for LBP 1,100, while people pay LBP 1,500 at the shop.
“We resort to selling straight from bakeries at the official price, with the economy minister refusing to put two prices, between bakeries and shops,” he said.
Former Economy Minister Raed Khoury, who worked on this issue during his tenure, confirmed that with the rise of the dollar exchange rate, profits of bakeries might have declined, but they certainly did not deteriorate to an extent of causing losses to their owners.
“We had started to work on a study on the cost of a loaf of bread, and it certainly needs some amendment today with the exchange rate of the dollar… But some points must be taken into account, including the decline in oil prices and the fact that the value of the salaries of employees decreased with the rise of the dollar,” he explained.
Khoury noted that bakeries, which used to make good profits, now must accept lower revenues to overcome this stage until the prices are corrected based on the results of the studies.
