DTI sets probe of 16 flour millers, 12 bakers

The Department of Trade and Industry is investigating 16 flour millers and 12 baking firms for possible collusion or profiteering.

These companies, according to the DTI, failed to reduce their selling prices despite the significant drop in the world market prices of wheat.

In a briefing, Trade Undersecretary Victorio Mario A. Dimagiba said flour prices could be reduced by P45 to P110 per 25-kilogram bag given the continued decline in global wheat prices.

The price of wheat stood at $194 per metric ton as of May this year, down from the $246 per MT a year ago and $204 per MT in January.

The price of a 450-gram loaf bread can be slashed by 69 centavos to P1.38, while that of the 600-gram pack can be cut by 75 centavos to P1.83. Such price reductions should have already been reflected in April, Dimagiba said.

“When world market prices move, retail prices in the domestic market naturally move with it. With the sharp declines in the price of wheat, we were expecting lower retail prices for flour which should result in lower prices of bread and noodles. However, based on our regular monitoring, the prices of the said commodities have not gone down. We cannot help but wonder if some form of ’teaming up’ is happening within the industry,” Dimagiba said.

At present, the prices of class 1 flour range from P760 to P910 per 25-kg bag; class 2 flour, P803 to P880 per bag, and premium flour, P910 to P920 per bag.

Dimagiba said the DTI had sent two letters to the 16 flour millers and 12 bakers. However, only two millers replied—Philippine Foremost Milling Corp. and Atlantic Grains Corp.

In the baking industry, only Gardenia Bakeries Phils. Inc. submitted the requested sales data.

A final letter will be sent next week and if the concerned will continue to ignore the DTI’s call, Dimagiba said the DTI would ask the National Bureau of In vestigation to look into possible collusion and profiteering.

Ric M. Pinca, executive director of the Philippine Association of Flour Millers (Pafmil) said the DTI should further strengthen its price monitoring efforts.

“It is very obvious that (the DTI’s) monitoring reports do not reflect actual market prices at least for wheat flour. Prices of locally milled flour are aligned with world wheat prices and compete for the local market against lower quality and subsidized imported flour from Turkey Indonesia Vietnam India and Sri Lanka,” Pinca said in a text message.

“The market reflects the intense level of competition for flour. With competition from foreign suppliers and growing number of local mills, one has to be aggressive to survive,” he added.