SUBSIDISED BREAD.
In September of 1917 the Food Control Department of the Government decided to fix the price of the four-pound loaf at ninepence, giving the flour to the bakers at 44/3 a sack. As the stocks which the bakers had bought had cost much more than this price, the Food Control Department agreed to make up the difference between 44/3 and the invoice price, allowing a maximum discount on the invoice price of 18/ per sack. A maximum allowance for carriage, baking material, and wages was 23/ per sack. When the Baking Society had taken stock of their flour they found that the difference between the discount allowed by the Government and the invoice price of the flour represented a loss to the Society of nearly £7,000. To the delegates at the quarterly meeting the chairman explained that this was due to the fact that the Society had purchased a large quantity of white flour in order to improve the quality of the bread. This flour had cost from 80/ to 90/ a sack, and even with the maximum Government discount allowed they were losing about 30/ a sack.
The general result of the Government’s policy was that bread which, if sold at a price which corresponded with the market price of flour, would have cost one shilling for the four-pound loaf, has been sold at ninepence, the taxpayer paying the difference, which amounted to about £50,000,000 per annum.