DTI probes flour millers, bakers for profiteering

MANILA, Philippines – The Department of Trade and Industry (DTI) is closely monitoring  16 flour millers and 12 bakers  for possible profiteering and violation of the Price Act.

Based on DTI’s computation, flour prices should have gone down by as much as P110 ($2.43) per bag based on declining prices of wheat at $194 per metric ton (mt) from $326 per mt.

But flour still fetches P910 ($20.14) per bag ex-mill, which is practically unchanged from two years ago.

At P800 ($17.70) per bag of flour as the ideal price, Dimagiba said the price of a 600-gram loaf should have dropped by P1.83 per bag, and 450-gram loaf, by P1.38 as early as April.

Between January and April, the price of wheat in the world market dropped 29% but prices of flour and bread remained stagnant, DTI Undersecretary Victor Dimagiba said in a press conference on Thursday, June 11.

The flour millers and bakers have until June 20 to explain and submit data for their failure to substantiate their costs despite decline in raw materials’ costs.

If they fail to comply, the DTI  would recommend to the National Bureau of Investigation the filing of criminal cases of profiteering and violation of the Price Act against the flour millers and bakers.

If found guilty, the millers and bakers can face a fine of up to P1 million ($22,108.94) and 6 months imprisonment.

The DTI will send on Monday, June 15 its final warning to the millers and bakers who ignored two letters from the DTI requesting them to lower their prices.

Of the 16 flour milling companies, only two responded to the DTI.

A new flour mill, Atlantic Grains Corporation informed DTI it would comply with the request to lower its prices.

The Philippine Foremost Milling Corporation justified its costs citing other factors like peso devaluation; severely lower extraction rates due to lower quality wheat kernels; customer specification requirements of end products; credit considerations; operational costs; and higher logistics costs.

Of the 12 bakers, Gardenia Bakeries Philippines so far submitted data but the documents were incomplete. – Rappler.com

$1 = P44.19

Baker’s image via Shutterstock