City residents should prepare themselves for a massive hike in food prices. South African manufacturers and retailers of food and other essential products warned earlier this week that consumers will face much higher prices unless the government urgently finds solutions to the power cuts that are crippling the economy.
CITY residents should prepare themselves for a massive hike in food prices. South African manufacturers and retailers of food and other essential products warned earlier this week that consumers will face much higher prices unless the government urgently finds solutions to the power cuts that are crippling the economy.
Food, consumer goods companies and retailers in the Northern Cape and across the country are cranking up diesel generators and spending more on back-up power supplies, adding to the pressure from soaring costs for raw materials, transportation and packaging.
Kimberley businesses and households are spending between six and 10 hours a day without electricity as state-owned utility Eskom implements some of the harshest blackouts in living memory owing to breakdowns at its coal-fired power plants.
In an open letter to President Cyril Ramaphosa, the chief executives of member companies of the Consumer Goods Council of South Africa pleaded for urgent and decisive action from the government to solve the power crisis.
“While we have maintained our operations and supply chains so far by using emergency power generators, this has been at an unsustainable financial cost,” the council said in the letter, which was also sent to local media.
“It is crippling our businesses, and will in the end mean much higher prices for consumers, who are already under severe financial strain.”
Last year, Ramaphosa promised to expand generation, slash red tape and buy surplus electricity from private producers.
The council, whose members include the country’s biggest supermarket group and food producer Shoprite and Tiger Brands, said if the crisis continues, businesses will not be able to guarantee stable supplies of food, medicines and other essential goods.
Shoprite has said its additional spend on diesel to operate generators amounted to R560 million in the six months to January 1.
Supermarket group Pick n Pay spent R346 million in the 10 months to December 25 to run generators, and is currently spending about R60 million per month.
REUTERS
