Price of bread may be liberalised

The government is considering liberalising the price of Maltese bread, The Times has learnt.

Sources close to the government say that in view of increased competition and market liberalisation it no longer makes sense to issue price orders for the traditional Maltese hobza, a practice so far carried out by every government in office.

The government previously used to subsidise the price of imported wheat, the raw material from which flour is extracted, and the price of flour was also subjected to a price order.

"This created an artificial situation as prices were not reflecting the prices of grains on the international market," the sources said. "With the liberalisation of the market, the price of flour now reflects the price of wheat on the international market and with the removal of import levies on flour, potential competition for the supply of this product has now become a reality."

The sources said it was now the time to also consider introducing competition in respect of traditional Maltese bread. "The government believes that consumers should be able to choose what type of Maltese bread they want to buy.

If they want to pay more for a particular type of bread sold from a particular bakery then why should they be denied this because of a price order which does not allow bakers to compete?" the sources said, adding that competition "could, in turn, also lead to a decrease in the price of bread". The sources stressed, however, that the Office of Fair Competition will have a crucial role to play in any liberalised market and will have to ensure that the prices of bread reflect fair competition on the market.

"No cartels must take place between members of the Bakers' Association," the sources said, adding that "those who agree not to compete among themselves or to agree to damage their competitors would be going against the Competition Act".

The price of other types of locally produced bread, such as fancy bread, sliced bread, panini, bziezen and ftajjar have already been liberalised.