Bakers seek flour price discounts to reduce bread prices

MANILA, Philippines—The Philippine Baking Industry Group (PhilBaking) is seeking a discounted rate for a specific volume of flour to be sold to local bakers, to enable them to maintain the price of the generic Pinoy Tasty.

In an interview with the Philippine Daily Inquirer, Philbaking director Simplicio Umali Jr. said the proposal was submitted to the Philippine Association of Flour Millers in August, but the millers had yet to respond.

“We want to further reduce the price of the Pinoy Tasty, so we asked the millers if they could provide a discounted price for a certain volume of flour to be used by the entire baking industry for the Pinoy Tasty. If they could bring prices lower, maybe we could even cut prices of our branded loaves,” he said.

Since its launch a year ago, he related that the Pinoy Tasty now accounted for 10 percent of the overall loaf bread market.

While the generic Pinoy Tasty had eaten into some of the market for branded loaves, he said its introduction had also helped the industry capture new customers – mainly consumers who used to shun away from bread products due to price concerns.

Right now, the Pinoy Tasty is priced at P38.50 a loaf. When it was launched late in 2010, it sold for P36 a loaf.

Pinoy Tasty is a joint effort of Philbaking, Filipino-Chinese Bakery Association Inc., and Philippine Federation of Bakeries Association Inc.

The “generic’’ loaf will be manufactured by members of these three organizations using standard bread ingredients.

The low price point is attributed to the absence of enriching ingredients such as milk, eggs, margarine, cream, and butter. Also, instead of using white sugar, bakers use the cheaper washed sugar to make the Pinoy Tasty.

In a related development, millers have filed a notice with the Department of Trade and Industry about their plan to hike prices by P10 per 25-kilogram bag, but an actual price increase has not been implemented.

The DTI is still waiting for the millers to submit the latest ex-mill prices to enable it to determine whether a price hike, at this point, is justifiable.

An industry source revealed that the DTI wanted to scrutinize how flour millers priced their products to ascertain that these were priced appropriately.

The DTI declined to comment on the matter.