DTI probes suspected collusion between flour millers, bakers

Sixteen local flour millers and 12 giant bakeries are now being investigated by the Department of Trade and Industry (DTI) after they failed to reduce bread prices despite the reduction in the price of wheat in the world market by 28.33% from January to April this year.

Trade Undersecretary Victor Dimagiba said the DTI is actually looking at a possible connivance between the flour millers and bakers.

“Silently, we in DTI had initiated an investigation and probing why prices of flour, bread and noodles are not going down. We had suspected maybe some form of teaming up among the millers and the bakers,” Dimagiba said.

“Nag-start na kaming mag-imbestiga at ask them na baka kayo’y nagsasabwatan bakit di kayo nagbabago ng presyo?” he added.

The price of premium flour in the market today runs from P910 to P920 per bag.

According to the DTI's computation, Dimagagiba said the price should only range between P800 to P845 per bag.

Class 1 flour is now being sold at P760 to P910 per bag. The DTI believes it should only be sold at P715 to P839 a bag.

Class 2 flour costs P803 to P880 per bag in the market when the DTI computation showed that it should only be sold at P732 to P825.

Dimagiba said that if flour millers and bakers were following the appropriate flour price, pan de sal would be cheaper by 3 to 6 centavos per piece.

A small of loaf of tasty bread will be cheaper by P0.38 centavos and those weighing 650 grams will be reduced by P0.56 centavos if the DTI's suggested prices are followed, the official said.

The DTI has already sent letters to the flour millers and bakers to ask for their explanation.

One has promised to follow the DTI pricing and the other justified their steady price.

The rest have yet to reply to the DTI query.

“I will be writing a final demand letter, a third letter to all who did not respond. We have also requested the bureau of customs for the import documents of all flour millers. And we have also requested the investigation arm of the department of justice, the national bureau of investigation to also evaluate the documents that we will submit and analyze whether there is basis to file any cases under the price act,” Dimagiba said.

Henry Ah, one of those who received the DTI communiqué and part of the Filipino-Chinese Bakers Association said, he will soon send a written explanation about the non-movement of their product prices.

He strongly denied the suspected collusion between flour millers and bakers.

“Kami (bakers)? Kung tutuusin kaaway pa nga namin yun (flour millers) parati eh… Everytime, when we sit down with dti we have to compute everything. Including the packaging materials,” Ah said.

Bakers he said, have been waiting for a price reduction of flour for so long now.

Once flour price gets down, bakers can immediately reduce their bread prices also.”

“The price are still the same since last year. We bakers have been long waiting for this reduction of the price of the flour. If the flour mill, or our local price will reduce. Whatever they can reduce, around 50 pesos per bag, we can reduce for the big jumbo loaf around 650 grams, we can reduce P1 or a 450 grams, we can reduce also around 50 cents,” he assured.

The Philippine Association of Flour Millers in a text message has denied that there’s overpricing in the market.

What the DTI should do, the group said, is to “strengthen its price monitoring efforts.”

“It is very obvious that their monitoring reports do not reflect actual market prices at least for wheat flour.”

The local flour miller’s prices are “aligned with world wheat prices,” the association stated. -NB, GMA News