Inyange Industries, Rwanda’s leading food processing industry, continuously raised prices since February this year, a move that left its distributors frustrated and unable to restock their depots.
According to the distributors that Business Times talked to, the decision comes after the company informed them of its losses.
“Last week, the industry called for a meeting with the distributors, where it announced that it increased prices to cover for operating costs,” said Venuste Rutabingwa, the chairman of Inyange distributors.
After the meeting, he said, distributors were given a new pricelist of all Inyange products and later, the prices were raised three times in a spell of one week, raising suspicion that the company intended to get rid of its distributors.
The pricelist for Inyange distributors, which was obtained from different distributors, shows that on February 21, 2011, a carton of 500ml of juice rose from Rwf3,800 to Rwf4,800 and settled at Rwf5,200 on the same date.
A carton of 500ml of mineral water rose from Rwf1,750 to Rwf2,400 as Tetra Pak juice was increased by Rwf600 to Rwf9,800.
Rutabingwa believes the company could halt distributors’ services and replace them with their own depot points across the country.
“Last week we sent a letter to Inyange’s Managing Director clarifying our grievances. We sought advice from Inyange as to how much we should sell the products, but they said it was up to us, this showed that they no longer want our services,” Rutabingwa said.
The decision by the company has put distributors under intense pressure with fear that they may fail to repay bank loans they acquired to maintain sufficient capital and adequate storage facilities as required by Inyange.
“We are left stranded now,” Rutabingwa said, adding that: “We rent expensive depots, purchased cooling facilities and vehicles to transport the products; all these expenses will be difficult to cover.”
Inyange has 16 large distributors who employ over 400 Rwandans, as well as many small distributors dispersed throughout the country.
Last year in November, Inyange laid off 80 workers in a restructuring exercise to streamline its operations.
When contacted for a comment, Inyange’s Managing Director Rama Kant Pandy said the company will issue a press release on the matter.