Zimbabwe bakers fined for hikes

Even bread is in short supply in Zimbabwe

The Zimbabwe Government has fined four leading bakeries who doubled the cost of bread, breaking strict price controls.

The companies were fined a total of 20 million Zimbabwe dollars, about $25,000 after this week's price hikes.

In a bid to fight rampant inflation, the price of a loaf of bread is set by law at Z$250 but bakers say this is below the cost of production and on Monday, they started charging up to Z$1,000 for a loaf.

This is the latest sign of Zimbabwe's economic crisis.

There are shortages of many basic commodities, including bread, sugar, petrol and even banknotes.

A manager at one of the companies told BBC News Online that they would appeal against the fines.

"It's ridiculous. It's not possible to trade at the gazetted price," he said.

The ongoing crackdown was effected following an outcry from consumers Police spokesperson Cecilia Churu

The price of grain was recently increased by 1200% by the state-owned Grain Marketing Board.

This led to an eightfold increase in the price millers charged bakers for flour.

Annual inflation is currently running at 365%, according to official figures.

Cash shortage

Police spokesperson Inspector Cecilia Churu told the state-owned Herald newspaper that supermarkets had also been fined for breaking price controls.

"The ongoing crackdown was effected following an outcry from consumers," she said.

Banks are restricting withdrawals of banknotes because of the shortages.

The highest denomination note, Z$500, does not even buy a bottle of beer.

Critics of President Robert Mugabe accuse him of ruining the economy, which used to be among the most successful in Africa.

The government blames the economic problems on a plot by western countries opposed to its land reform policy.

Aid

Meanwhile, the Herald is reporting that the government is appealing to international donors for more food aid.

Much of Southern Africa is recovering after bad droughts last year, but Zimbabwe is still being hard hit with millions still needing food aid.

The UN food agency requires a formal request from the government before aid can be provided.