Bakery owners threaten to raise prices of products

Prices of bakery products will be increased in the near future due to the rising production costs, All Ceylon Bakery Owners’ Association (ACBOA) President N.K. Jaywardena told Times Online.

The failure of the budget to address the issues faced by the industry has paved the way for a price hike, he said.

“Our proposal to remove the tax on wheat flour has fallen to deaf ears,” Mr. Jayawardena said while explaining that the prices of bakery products will be increased if the cost of wheat flour keeps increasing.

He added that the proposal to revise taxes on margarine, yeast, palm oil, and butter – which are key ingredients used to produce bakery items have also not been addressed in the budget.

The ACBOA President pointed out that the Value Added Tax (VAT) and Nation Building Tax (NBT) continue to be imposed on all bakery products except for bread which is exempt from NBT. This has resulted in a higher production cost.

Accordingly, he said that steps would be taken to increase the prices of products although the exact figure of the price hike cannot be predicted at present.

However, Minster Rishad Bathiudeen said that this matter would be discussed at the cost of living cabinet sub-committee meeting which would be attended by the Finance Minister.

“If their demands are reasonable we will take measures to respond accordingly” the Minister of Trade of Commerce said.

He pointed out that price changes cannot be made overnight since the government is concerned on the side of the consumers as well.