The Department of Trade and Industry conducted meetings this week with the manufacturers of milk and instant noodles and the community bakers to discuss DTI’s expectation of decreases on their suggested retail prices (SRPs) for basic milk products – evaporated, condensed, powdered, pandesal and instant noodles in chicken and beef flavors.
In separate meetings, all three (3) milk manufacturers – Snow Mountain, Nestle Phils. and Alaska agreed to DTI’s report that the world price of imported skimmed milk have gone down to 67%.
During the meetings, DTI showed the milk manufacturers its computations on the impacts of the price decreases of imported skimmed milk as a major component on the prices of milk products. The report shows among others, the computations for an almost 50% or P25.56 decrease on the SRPs for powdered milk; almost 41% or P22.72 on the SRPs for evaporated milk; almost 34% or P35.14 for condensed milk.
With these computations, DTI prompted the milk manufacturers to decrease their SRPs on their milk products that are under the basic necessities category.
Nestle responded that they are now in the process of doing their own computations and expects to have the results next week. Nestle said they’ll meet with DTI again next week for another discussion. On the other hand, Snow Mountain said that they would like to be on status quo – where they will remain their prices within SRPs and that they will not increase their prices at this time. Snow Mountain stressed that other price components of their products have increased, thus, their SRPs will remain the same. Freezeland has a similar stance with Snow Mountain and stated that they cannot decrease their SRPs at this time. But it asked about Nestle’s response to DTI and said that if others will decrease their prices then they will follow suit.
DTI did not receive any feedback from Fonterra. As a follow-up to its invitation for a meeting, DTI sent a letter to Fonterra requesting for its justifications on why they should maintain its current SRPs.
The Snow Mountain’s milk brands are Birch Tree (powdered, 150g) and Angel (evaporated, 410ml); Nestle’s are Bear Brand (powdered, 150g) and Nido Fortified (powdered, 160g); Freezeland’s are Alaska (condensed, 300ml; evaporated, 370ml; powdered, 150g), Milkmaid (condensed, 300ml), Alpine (evaporated, 370 ml).
The community bakers explained that when LPG prices were increased, they did not increase their prices on pandesal. However, they were a bit surprised when DTI showed its computations on why pandesal prices should go down when there was already a drop of LPG prices up to P286.51 from January 2014 up to January 2015. The community bakers said that they will discuss this development to their members and will meet again with DTI next week.
Initially, the bakers said that they can have two (2) options in responding to DTI’s call to decrease prices. One is to decrease the price of a piece of pandesal by P0.15 or add a weight of 2 grams to a piece.
DTI also met with Nissin Monde, makers of Lucky Me instant noodles in chicken and beef flavors. Again, DTI showed its computations to them which show that there should be a P0.20 decrease per pack. Nissin Monde said that they’ll have their own computations.
DTI met with media this afternoon who were waiting for meeting updates. DTI underscored that manufacturers are saying that they cannot decrease their SRPs because of the impacts of port congestion to their businesses, DTI responds that these expenses, which they say are due to port congestion can be claimed as deductible expenses for tax purposes or as input VAT with proper documentation.
DTI is still optimistic that manufacturers of basic milk, bread and instant noodles can and will decrease their SRPs for their products. If they will not follow DTI’s heed, then they will go through the DTI process of justifying their costs, to which DTI will be guided by the Price Act or RA 7581.
DTI reminds the industry that the Price Act is valid and constitutional where profiteering is specified as an illegal act of price manipulation. It also commits to continue its intensified price monitoring activities on basic and prime goods. DTI also commits to sustain its open communication with the industries to assist them in practicing fair business and to ensure consumer welfare.
DTI will also look at the possibility of Pinoy Tasty’s price rollback.
Source: Consumer Protection Group, Department of Trade and Industry
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