Bread (Hansard, 19 December 1974)

§ Mr. Maclennan

Over recent months there have been significant increases in the rates of discount granted by the plant bakers to a number of buyers of their bread. I have been concerned about this, in view of the relationship between retail bread prices, discounts and the subsidy arrangements and its possible effect on the viability of the baking industry. I have therefore decided to amend the Bread 523W Subsidy Scheme so as to bring in additional controls over the discounts which bakers may extend to their customers on subsidised bread.

Bakers will in general be required to adjust their discounts to the rates applying on 3rd September 1974—the date of the last notification to the Price Commission which led to an adjustment in the rate of subsidy—or to 22½ per cent., whichever is the lower. There will be certain limited exceptions, but subject to those any changes in rates, or the establishment of new ones, will need my consent. Bakers will also be required not to make changes in the value of other terms and conditions of sale.

In accordance with the provisions of the Price Code, the larger plant bakers have notified these changes in discount arrangements to the Price Commission. For them, the new arrangements will come into effect as soon as the notification period expires; they will apply to other bakers from Monday 6th January.

Bread is an important item in the voluntary agreement and I have been pleased to note that a large number of retailers have been cutting the price of bread. I have explained to the retail trade that, in permitting a maximum of 22½ per cent., it has been my intention to provide conditions in which price-cutting of bread can continue, although I recognise that some of the deeper promotional cuts may have to be modified.

The arrangements will be kept under review and the Government are continuing discussions with the interests concerned.