BUA CEO, Rabiu, accused food producers of creating artificial shortages to increase prices

Abdul Samad Rabiu, Chairman of BUA Foods Plc, has leveled scathing accusations against competitors in the food industry, accusing them of deliberately creating shortages to raise prices.

In a statement issued on Thursday, Rabiu revealed that his company faced significant challenges in maintaining lower product prices due to the actions of other manufacturers.

Rabiu pointed out that the price of flour has reached exorbitant levels, reaching N70,000 per bag. Although BUA Foods maintained a much lower price of N50,000 for a long period of time, other companies allegedly deliberately pursued a strategy of stopping production to create shortages, thereby causing further price increases.

“When our price reached N50,000, the distributor added N20,000 and sold at N70,000 per bag. At one time, customers were making nearly N20 million per truck loaded with 75 tonnes of flour. Yes, it happened,” said Rabiu.

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The BUA Foods CEO emphasized that the company’s commitment to lowering prices has been hindered by unscrupulous tactics from competitors seeking to profit from shortages. He criticized the practice of artificially limiting supply to raise prices, which he described as a major problem that negatively impacts consumers and the economy as a whole.

“BUA products are the cheapest on the market. And because we have other companies producing similar products, it is very difficult to set low prices. For example, a few months ago, the price of flour reached N70,000 per bag. We held on to our N50,000 for some time to try and force other companies to come down as well. But when they saw that was going to happen, they deliberately stopped production, and prices continued to rise.

“That’s why they suddenly stopped production, causing a shortage. With this scarcity, prices continue to rise. So that’s part of the problem. When we looked at it, we knew it didn’t make sense for us to continue selling at N50,000 when the market was at N70,000. Our production is large, but there are two other companies that are bigger than us.

“However, we are sure that next year we will be bigger than them,” he said.

Rabiu expressed his frustration with the existing industry dynamics, where competitors prioritize short-term profits over long-term consumer interests. He argues that such practices not only harm consumers but also damage the reputation of the food industry as a whole.

The CEO of BUA Foods expressed confidence in his company’s ability to overcome these challenges. He stated that BUA Foods is rapidly expanding its operations and investing in increasing production capacity. Rabiu believes that by significantly increasing its market share, BUA Foods will be better positioned to exert greater influence on prices and reduce the impact of shortage tactics employed by other manufacturers.

Furthermore, Rabiu emphasized the importance of transparency and accountability in the food industry. He called for increased regulation and oversight to prevent anti-competitive practices and ensure fair competition. By promoting equality, Rabiu argues that the industry can better serve consumer needs and contribute to the country’s overall economic development.

Rabiu’s statement highlights the competitive dynamics in the food industry in Nigeria. This raises concerns about potential anti-competitive practices that could harm consumers and increase prices.

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