Group seeks bread price cut along with cheaper flour

A CONSUMER group headed by a former trade official is asking the Department of Trade and Industry (DTI) to lower the prices of bread amid a decline in the price of flour.

In a letter dated Dec. 19 and addressed to Trade Undersecretary Teodoro C. Pascua, Laban Konsyumer, Inc. called for an immediate rollback of “no less than P2 per loaf.”

Victorio Mario A. Dimagiba, president of Laban Konsyumer, Inc., said in the letter that DTI should be transparent with its computations in order to justify current prices, which remain unchanged even if the price of the key raw material has been declining since January.

“In the past and using the industry own formula submitted to DTI that for every P40.00 per bag of flour price reduction, it translated to P1.00 reduction per loaf. This justifies our call for a P2.00 rollback in the price of loaf bread,” his letter read, a copy of which was made available to reporters.

Mr. Dimagiba, who previously held the position of Mr. Pascua in the Consumer Protection Group of DTI, noted that the price of El Superior premium flour was P805 per bag as of November from P880 in January. On the other hand, Wellington premium flour as of October was P820 per bag from P850 in January.

“Therefore, we demand for the second time for DTI and the bakers to announce immediately a price rollback of no less than P2.00 per loaf. The price rollback will reduce the baker’s net profit per loaf but will definitely not result in them losing money,” the letter read, referring to an earlier statement addressed to DTI on Dec. 6.

“If further denied, and because DTI agreed with the bakers, we cannot seek relief from the regulator but has to consider taking further action before a third party forum to file our complaint against all parties concerned under relevant provisions of the Price Act, the Competition Act and the Anti- Graft and Corrupt Practices Act.”

Using December 2016 costs, the group presented its computations for a 450-gram loaf of bread, which showed that the bakers would still profit even if the retail prices fell. They used the ex-mill prices for Harinang Pinoy (P580 per bag) and Wellington and El Superior premium flour (P780 per bag).

Ex-mill pertains to the price of a certain product at the factory, which does not include other charges, like delivery or additional taxes.

The computation included the added costs of packaging and labor, among others, which showed that a baker using Harinang Pinoy that is sold at P580 per bag could still obtain a 42% profit or P15.39. This assumes a P37 selling price per loaf and a P21.61 total cost of production.

For Wellington and El Superior premium flour which is sold at P780 per bag, a baker can still generate a profit of P13.26 per loaf at a P37 selling price and P23.74 total production cost.

Mr. Pascua previously said that the price of basic necessities and prime commodities are expected to remain stable until early next year. —