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By Angus Shaw

BEER deliveries resumed Friday after the government backed down on a price freeze on local lager brands and allowed producers to raise prices of some other goods.

Stores and bars were calculating a new retail price for beer as the government conceded it was being sold at a loss six weeks after an official edict that ordered price cuts of around 50 percent on all goods and services in a measure to tame rampant official inflation of 4,500 percent, the highest in the world.

The price cuts have left shelves bare of cornmeal, bread, meat, cooking oil and other basics. Businesses argued they were being told to sell their goods below the cost of producing them.

Beer disappeared earlier this week.

In a statement on a new range of increased prices Friday, the industry ministry acknowledged it cost about the same amount to produce the standard bottle of beer without taking into account wholesale distribution, transportation costs and the retailer's permitted margin of profit.

The statement raised the price of bread by about 30 percent and the cornmeal staple by about 10 percent. Beef went up by between 10 and 50 percent depending on the quality.

The biggest increase of about 300 percent went to cement manufacturers who had pointed out that the government price decreed on June 26 covered only the cost of the cement bag and not its contents.

"These prices have been arrived at after comprehensive interrogation of the pricing formula used by the relevant industry sector and are intended to improve the supply of goods on the market," state media reported Industry Minister Obert Mpofu as saying Friday.

Many factories prepared Friday to shut down for the whole of next week, coinciding with a two-day national holiday Monday and Tuesday honoring guerrillas who fought in the bush war that led to independence in 1980.

Executives said acute shortages of gasoline, crippled commuter transport services that led to worker absenteeism, shortages of hard currency and materials as well as daily power and water outages influenced businesses to take a longer break.

A least 7,000 executives, business managers and traders have been arrested since June 26 for defying the price cuts and alleged profiteering.

The government holds a one-fifth stake in Delta Corp., one of the nation's biggest corporate conglomerates and owners of the National Breweries, the only beer maker.

Delta managers said brewing of beer was shut down this week until a viable price was agreed with the government.

Delta, seen to have massive corporate clout, could have withstood a lengthy closure of its brewing operations, managers said.

The government was faced with a long absence of beer, starting with a symbolic holiday celebrating independence from colonial-era white rule, in a nation of mainly beer drinkers. - AP

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