Bakers have been warned they cannot just agree collectively to raise the price of Maltese bread, even if free market rules prevail, Times of Malta has learnt.
Government sources said that the Malta Competition and Consumer Affairs Authority had written to bakers, informing them that setting a common price for a loaf would infringe upon competition regulations.
Various bakers and supermarkets across the island increased the price of Maltese loaves last month. The increases varied, the newspaper was told.
In some cases, a large Maltese loaf now sells for €1.10, up from 90c. Some had already raised the price by a few cents, and others made no changes at all.
The government cannot intervene
When contacted, a government spokesman acknowledged that there had been an increase, noting this had not been even across the board.
“As you know, the market has been liberalised for a long time, and despite perceptions to the contrary, the government cannot intervene in any way to set the prices or reverse the increases,” he said.
Read: When the price of bread goes up - Michael Briguglio
“The only way we can intervene is if we see that the increase was agreed as a common front between all suppliers, because this will be infringing upon competition rules. This has not been the case so far,” the spokesman was quick to add.
Bakers who spoke to Times of Malta said the increase was due to the steeper price of flour, the main ingredient in bread. But the government spokesman pointed out that the price of flour, despite the latest increase, was still lower than it was five years ago.
“Bakers are at liberty to raise the price of bread but they did it for the wrong reason, because the prices of wheat and flour are still lower than they used to be,” the spokesman said.
He acknowledged that bakers, who had difficult working hours, had experienced increases in their costs, including salaries.
Read: Maltese bread prices set to rise - reports
A spokesman for Federated Mills, a private company supplying most of the flour needed by local bakers, admitted it had recently increased its prices by between five and six per cent. This, he noted, followed a commercial decision and was a reflection of international prices.
Some bakers, including some who now form a commercial chain, import flour directly.
TVM, the national broadcaster, reported last month bakers had agreed to increase the price of a large loaf by 24c and 20c for a small one. This prompted the regulator to warn that such an agreement amounted to a cartel.
Even the GRTU – Malta Chamber of SMEs – which represents some of the bakers, advised members against entering into such an agreement. Since then, they have backed down from their common stand, but most still decided to increase prices.
Many consumers have complained to Times of Malta about the new price of bread, protesting that it is too steep.