The nation's bakers have continued to increase their prices - and profits - during the past two years while wheat and other farm products prices have dropped, the Council on Wage and Price Stability reported yesterday.
The study noted that wholesale bread prices have continued to rise since the third quarter of 1974 despite significant dcreases in the costs of the farm staples used in bread production.
While bakers' non-ingredient costs - for labor, fuel and packaging - have been increasing, the council said higher bread prices reflect the increases in wholesale bakers' profit margins.
The study portrayed large, multiregional bakeries as htevillians in the push for profits, indicating that the tendency toward concentration in the industry is the basis for much of the price spiral. The top four brands of bread generally account for 59 to 60 per cent of all consumer bread purchases, it noted.
Although it said that the large companies had significantly higher unit production and distribution costs than smaller firms, the report said the failure of the major bakers to slow down the rate of their price jump resulted in the full restoration of profit margins to 1971 levels. Bakers' profits rose 42 per cent in 1975 while all manufacturers' profits declined 15.1 per cent.
While wheat prices more than doubled between 1973 and 1974 - a period in which bread prices rose 49 per cent - the fall in farm prices in 1975 was not followed by lower bread prices on brands produced by multiregional bakers.
While cooperative and independent bakers began stabilizing prices in 1975 to accompany lower grain prices, multiregional firms increased bread prices 8.1 per cent. Independent bread makers cut prices 1.6 per cent in the same period.
Bread profits of all bakers reached a five-year high in 1975, the study said. The profit rate for the major companies was 13.1 per cent that year compared to 9.9 per cent for all manufacturing sectors. But while the bakers' rate was higher than other industries, it was "not excessive," the study said.
The study concluded that the large bakers may be less efficient in producing and distributing their products than smaller, owner-operated companies. But 91 per cent of the nation's bread products are produced by bakeries owned by supermarket chains, which are those most accessible to most consumers.
A 35-cent loaf of bread provides 23.2 cents for bakers and only 5.5 cents for farmers, the report noted.