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DTI tells four millers, bakers to slash bread prices or face NBI probe

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DTI tells four millers, bakers to slash bread prices or face NBI probe

By: - Reporter / @amyremoINQ
/ 08:44 PM June 24, 2015

The Department of Trade and Industry slammed on Wednesday some of the country’s flour millers and baking firms for refusing to slash the prices of their respective products in light of the continued decline of wheat prices in the global market.

Trade Undersecretary Victorio Mario A. Dimagiba said in a briefing on Wednesday that it has asked the National Bureau of Investigation to determine if flour millers and bakers have been colluding to keep bread prices up.

Dimagiba said that given the 30 percent decline in wheat prices in the first five months of this year, flour prices should have already gone down to about P715 to P845 per 25-kilogram bag. Currently, flour prices can cost up to P930 a bag.

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Consequently, this supposed decline in flour prices must also translate into a reduction of branded bread products by about P1 to as much P1.95, a move that would significantly benefit the end-consumers Dimagiba added.

According to Dimagiba, the DTI has already written thrice to 16 flour millers and 12 baking firms, and received mostly vague answers, some of which had justified why companies have not been reducing their prices.

Dimagiba quoted the letter of Wellington Flour Mills as stating that while the world prices of wheat had gone down, other factors should be considered such as the foreign exchange rate, sales on credit terms, cost of money, freight, labor and other costs.

Universal Robina Corp. was reportedly vague when it stated that it has reduced gradually the prices of flour products in various areas nationwide. This response prompted DTI to request for the ex-mill prices of all their flour products per brand and class.

San Miguel Mills said that while flour prices have been going down in several parts of the country, domestic freight costs including trucking, shipping and warehousing, have gone up during the past months.

RFM Corp., in contrast, issued a memorandum as early as February this year regarding adjustments in dealers’ prices. Prices of its hard flour ranged from P760 to P820 per bag, while prices of soft flour ranged form P670 to P910 per bag.

According to Dimagiba, the DTI will seek the help of the National Bureau of Investigation on this matter as they will turn over to the agency this Friday all pertinent documents for further review and investigation on possible collusion or profiteering.

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TAGS: bread, bread prices, Business, Consumer Issues, Consumer protection, Department of Trade and Industry, flour, National Bureau of Investigation, profiteering, rfm corp., San Miguel Mills, Universal Robina Corp., Victorio Mario A. Dimagiba, Wellington Flour Mills, wheat
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