Retailers seek Sh175m pay to lower unga prices
Retrak Chief Executive Wambui Mbarire. She said retailers are still holding maize flour stock of 750 tonnes that were purchased at the high market prices.
Retailers are seeking to be reimbursed Sh175 million that they paid to maize millers for maize flour supplies at high prices before they start selling it at the government subsidized prices.
President Uhuru Kenyatta on Wednesday announced a price cut of maize flour from Sh205 to Sh100 for a 2-kilogram packet after meeting millers and key government officials.
The Head of State said maize flour is out of reach for many Kenyans due to the high prices and suspended levies charged on imported maize including the Railway Development Levy (RDL) and Import Declaration Fee (IDF).
“I note with regret that the cost of a 2 kg pack of maize-meal remains out of reach for many, as it is currently retailing at an average of Sh205,” said President Kenyatta.
“Maize flour shall retail across the entire territory of the Republic of Kenya at the price of Sh100, down from Sh205 for a 2kg packet, until otherwise directed,” he said.
Now, retailers under the Retail Trade Association of Kenya (Retrak), among them leading supermarkets, have demanded to be first compensated for the high cost they incurred to stock maize flour at the previous prices before the subsidy.
Retrak Chief Executive Wambui Mbarire, in a statement, said retailers are still holding maize flour stock of 750 tonnes that were purchased at the high market prices.
“While the new price tags are affixed, our analysis indicates that as of the close of business on July 20, 2022, retailers affiliated with Retrak were holding unsold stocks amounting to more than 750 tonnes,” she said.
Ms Mbarire said retailers have initiated talks with maize suppliers on how they will be compensated before they start selling the product at the subsidized prices.
She said that fast-moving commodities such as maize flour are paid for in advance by retailers or in very thin credit terms which do not exceed 14 days and now want to recover the amounts through rebates or credit notes.
“Consequently, we have commenced engagements with the respective maize meal suppliers to recover more than Sh175 million, which is a cumulative estimate of the higher price earlier paid to them to facilitate deliveries,” she said.
The demand comes at a time many retailers are yet to start selling maize flour at the subsidized rate of Sh100 citing need to clear old stock.
On Thursday, however, some retailers had started selling some of the maize flour brands at the new prices, handing a relief to Kenyans who are currently braving a high cost of living.
“We are optimistic that the engagements will bear fruit, and retailers will recover these amounts as rebates or credit notes to facilitate smooth service delivery to our esteemed customers,” said Ms Mbarire.
The maize flour subsidy comes just a week after the government also announced a fuel subsidy – the first in three months – to keep fuel prices stable for the July-August pricing cycle helping maintain fuel prices are the current level.
