Govt prodded to boost Kadiwa, online channels

THE government should partner with retailers and explore alternative sale channels, such as online and Kadiwa, to directly sell cheaper imported pork to Filipino consumers, industry players said.

Industry players and an economist told the Businessmirror that the government must address the value chain problems hindering consumers to feel the cheaper price of imported pork.

The Businessmirror learned that the Department of Agriculture (DA) called for an emergency meeting last week with meat importers to discuss concerns over prevailing prices in the domestic market.

Two industry groups—meat Importers and Traders Association and Philippine Association of Meat Processors Inc.— alongside other registered meat importers were present at the meeting.

People who attended the meeting told the Businessmirror that the atmosphere was “cordial” and “cooperative” in

nature as both government officials and private stakeholders agreed that there’s a need to resolve value chain problems, especially at the retail side.

Sources told the Businessmirror that one sticking point during the meeting was that imported frozen pork is being sold at the retail level at P100 higher than the price being passed on by meat importers or traders.

Meat importers and traders are selling imported pork liempo to retailers, including supermarkets, at P230 to P240 per kilogram price level, while pork kasim ranges from P140 to P150 per kilogram.

Recruit like-minded retailers

JESUS C. Cham, Meat Importers and Traders association (MITA) president, proposed that the government “recruit like-minded retailers and traders” to be able to lower the prices of pork in the market at a wider scale.

This way, Cham explained, the imported pork would be sold at a very reasonable price level—way below prevailing prices—that is affordable to consumers while ensuring sufficient profit margin across the value chain, especially to retailers. Nonetheless, Cham said the government has already achieved the price level it has set for imported pork. Citing data presented by Da officials during the meeting, imported pork liempo is now sold at an average of P290 per kilogram and kasim, at around P250 per kilogram, he added.

The government is targeting to bring down pork prices below P300 per kilogram, starting with imported pork. however, the scale of the lower prices has not been felt across Metro Manila due to various factors, Cham said.

One of which, he pointed out, is the low purchasing power of consumers that has been worsened by the pandemic coupled with high price mark-up by retailers, especially in the wet market, who are trying to recover losses.

“The pass-on price from importers has come down significantly. There’s still room for consumers to benefit in terms of lower prices but we have to involve the retailers,” he told the Businessmirror.

Issue of management

ECONOMIST Pablito M. Villegas told the Businessmirror that the huge price disconnect between the retail level and the importer/trader level is a “simple” management issue that government could address through various means.

One option is for the government to intensify the rollout of Kadiwa by putting up Kadiwa stores that only sell meat products—both imported and locally produced—in poorer barangays in Metro Manila.

The rollout could be done with the government partnering with logistics or cold chain companies to be able to secure reefer vans that will position the meat products in the selected areas or markets, Villegas explained.

“Selling both imported and fresh pork gives the consumers the power of choice. Let them decide what they will buy based on their preference whether its price or quality,” he said.

Villegas also proposed that the Da engage with the retailers, particularly the wet market vendors, and negotiate a deal with them to ensure that they will sell at a lower price in exchange for an incentive.

Villegas said this could be done through the Da’s P40-million freezer program—the retailers could only benefit from the grant if they agreed to sell imported pork at a level that is lower than prevailing market prices.

another option is for government to explore the use of online market platforms and tapping resellers at the barangay level, Villegas said. Villegas explained that it is only natural for retailers to put a high mark-up price on imported pork to rake in missed profits, especially with its huge discrepancy with locally produced fresh pork.

“It is an aberration. It is the characteristic of a highly imperfect market. The solution in a perfect market condition is not applicable to an imperfect market—to the Philippines due to the greed across the value chain that you cannot moderate,” he said.

“The only option is to saturate the market [with imported pork] and provide support even at the retail level,” he added.