No rise in price of bread

The price of Maltese bread is to remain unchanged after the government yesterday announced that following negotiations with the Bakers Cooperative it had decided to subsidise the price of flour used in the production of Maltese bread.

"This subsidy will ensure that bread will continue to be sold at the present prices and no increases will be effected," the government said in a statement.

Large loaves will therefore continue to be sold at 19c and small ones at 12c. The government has decided on the subsidy measure, which will make good for rising costs, rather than let bakers push up the price of bread.

The decision was partly influenced by the fact that a higher price would have had an impact on the retail price index and this might in turn have affected plans to introduce the euro in 2008.

The bakers too preferred the subsidy rather than a price increase because according to them each price hike has been followed by a drop in demand.

A report on bakers' costs drawn up by the Consumer and Competition Division showed bakers' demands were justified because of the hikes in the price of diesel, oven fuel, flour and the utilities surcharge.