Middle-east Arab News Opinion | Asharq Al-awsat

Rising costs threaten to shut down Saudi bakeries | ASHARQ AL-AWSAT English Archive 2005 -2017
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Jeddah, Asharq Al-Awsat – Saudi bakery owners have threatened to suspend production due to increasing financial costs following the implementation of a Labour Ministry decision to impose taxes on any increase in employment, in addition to governmental oversight banning any raising of the price of baked goods. The above two issues represent significant pressure factors on owners of domestic bakeries, despite continued government support regarding the price of bread, and Saudi bakery owners have informed the National Committee for Bakers of their concerns.

For his part, National Committee for Bakers President, Fayez Hamada, informed Asharq Al-Awsat that a large number of bakery owners have already taken the decision to halt production and would no longer be supplying the market with bread due to increased costs. Fayez stressed that the bakery owners’ demands confirm the importance of obtaining a waiver on new employment tax, particularly as the price of bread in Saudi Arabia has been held at one riyal for over 40 years despite rising operations costs, including the cost of fuel and labour.

Hamada emphasized that the bakery sector is facing a number of challenges, due to the high cost of operating private bakeries that rely on labour. He also stated that these traditional bakeries would be most affected by the new-wave of bakeries that rely on technology and which are therefore able to save on labour costs. He informed Asharq Al-Awsat that the National Committee for Bakers has received a number of complaints by bakery owners across Saudi Arabia and is working to relay their demands to the higher authorities in order to guarantee the production of bakery goods and the availability of bread to Saudi consumes.

Hamada stressed that Saudi bakery owners are facing a number of challenges, not least rising fuel prices, particularly kerosene. He added that the National Committee for Bakers had submitted these complaints to the Ministry of Municipal and Rural Affairs to contain this crisis over rising costs.

Saudi Arabia announced it had secured its wheat requirements until mid-2013 after the fourth shipment of wheat – comprising 575,000 tons – was imported from Europe, Australia and North and South America.

It was revealed that the latest shipment of wheat to Saudi Arabia arrived in a total of 10 ships; with 5 ships carrying 300,000 tons of wheat and arriving in Jeddah Islamic port, whilst King Abdulaziz Port in Dammam received 275,000 tons.