Bakers to cut prices of bread Tuesday

MANILA, Philippines - Bread prices will go down by Tuesday next week to reflect the recent decrease in flour prices, industry leaders said in a press conference Wednesday. Bakers will slash 50 centavos off each 600-gram loaf while a pack of ten pieces of pandesal will be 25 centavos cheaper, Philippine Baking Industry Group President Simplicio P. Umali, Jr. told reporters. As a result, a loaf of bread will cost P55.50, from the previous P56, while a pack of premium pan de sal will be priced at P34.75 from P35 in supermarkets. Mr. Umali, also president of market leader Gardenia Bakeries Philippines, Inc., said the rollback will be followed by competitors, noting that Gardenia accounts for 65% of bread sales in supermarkets. Small neighborhood bakeries, meanwhile, will increase the size of pan de sal to 33 grams from 30 grams instead of rolling back prices as a per-piece decrease will only amount to 2.5 centavos, Chito Chavez, vice-president of the Philippine Federation of Bakers, said. Mr. Umali said the decrease in prices was delayed because bakers had to consume their inventory of higher-priced flour first. "If flour prices will go down further, we will definitely pass this on to consumers," he added. The Philippine Association of Flour Millers said last month that prices of hard flour, the type used for pandesal and loaf bread, were cut to P925-940 from P957 per 25-kilogram sack. Bakers, Mr. Umali added, were not satisfied with the recent flour price decrease and had wanted a more substantial rollback of more than P20. The bread industry groups will also continue to call on the government to eliminate tariffs on imported flour to introduce competition in the market. The tariff on imported flour currently stands at 7%, while a lower 5% tariff is slapped on flour from within Southeast Asia. "Congress is back in session so an executive order [slashing tariffs] may not be released. We’ll have to wait for now," Mr. Umali said. Flour millers had opposed this move, saying it will hurt the local flour industry and result in foregone tariff collections. — Jessica Anne D. Hermosa, BusinessWorld