A group of bakers vowed to keep bread prices affordable this year, despite the increase in the cost of other commodities such as rice and petroleum that led to a 6.7-percent inflation rate in September.
Members of the Philippine Baking Industry Group made the assurance during a meeting with the Trade Department to allow Filipino consumers to enjoy affordable bakery products during the Christmas season. The group includes mostly producers of Pinoy Tasty and Pinoy Pandesal products.
PhilBaking members said the current price of P35 per loaf of Pinoy Tasty and P21.50 per 10-piece pack of Pinoy Pandesal would remain until the holidays are over.
The group said it decided to maintain prices in response to the Trade Department’s call for manufacturers to refrain from increasing the prices of basic commodities this holiday season.
PhilBaking said despite the rising cost of ingredients, its members continue to absorb the additional cost brought about by the increasing prices of raw materials.
“While other products have gone up, Pinoy Tasty and Pinoy Pandesal will remain at P35 and P21.50, respectively, until end of December,” PhilBaking president Paolo Valderrama said.
Valderrama is a second-generation executive of the country’s second largest bread company, Marby Food Ventures, maker of the Marby bread.
Data show the prices of Pinoy bread have not moved up since April 2016. Flour prices also remain manageable, according to the Philippine Association of Flour Millers Inc.
Pafmil executive director Ricardo Pinca said the increasing capacity of flour millers and the entry of two more players would keep flour prices in the country competitive.
Data from Pafmil showed that despite the high prices of global wheat, Philippine flour prices declined to P670 per 25-kilogram bag this year from a range of P870 to P900 a bag four years ago.
Pinca said while retail prices of flour remained competitive, other inputs to baking rose because of inflation and the devaluation of the peso against the US dollar. Most inputs are imported.
Valderama said while members of PhilBaking agreed to freeze prices this year, they may have to adjust the prices of Pinoy Tasty and Pinoy Pandesal in January 2019.
Pinoy Tasty and Pinoy Pandesal are products of a joint project between the Trade Department and the bakers group as an integral component of the industry’s corporate social responsibility to provide accessible and affordable bakery products to consumers.
The project resulted the proliferation of many other reasonably-priced loaves and breads in the market. Pinoy breads (tasty and pan de sal) are part of the baking industry’s efforts to provide an alternative to premium, branded breads, in cooperation with the Trade Department.
“Based on the major costs, such as flour, sugar, and yeast, there has been an average of 6 percent increase due to the impact of these factors,” he said.
The Trade Department assured consumers that the price of Harinang Pinoy would remain stable until December 2018. Bakers expect a P45 increase in the price of a bag of flour, including Harinang Pinoy, once the price hold-off is lifted by December.
Valderrama said the association members were actively promoting Pinoy breads which also contain vitamins and minerals present in premium breads.
He said the group wants to keep the prices of Pinoy breads affordable, despite the rising inflation rate and fluctuation of foreign exchange.
“Inflation and foreign exchange have been a problem not just for bakery ingredients, but also for all industries. Some players would opt for cost cutting in this situation,” Valderrama said.
“Inflation has a domino effect. Once cost of materials rise, cost of retail prices usually follow. Majority of consumers will get affected and they would adjust their budget and their buying behavior accordingly,” he said.
What is more challenging, he said, is that some suppliers were hoarding ingredients, resulting in sourcing problems for bakers.
“Since they can control prices and also during seasonal times, some ingredient makers would prioritize selling to retailers instead of manufacturers,” he said.
Valderrama said despite these challenges, local bakers had not succumbed to competition including foreign bakeries.
He said existing players were continuing to diversify. “Given the tight competition, each one has to survive,” he said.
Trade Undersecretary Ruth Castelo, who heads the Trade Department’s Consumer Protection Group, said Pinoy breads were among the commodities subjected to price freeze as requested by the agency.