Bakers are asking the government for a 10-percent price hike for Pinoy Tasty and Pinoy Pandesal to cover increases in flour prices alone, saying they are already selling “at a loss” and are expecting a five-percent decline in sales this year.
“What we are asking is only a 10-percent increase just to cover the doubling of flour prices. We haven’t even considered the increases in the price of other ingredients like sugar, yeast, salt and improvers,” Gardenia Bakeries Phils. Inc. president and former Philippine Baking Industry Group (Philbaking) President Simplicio Umali said.
“When before we were at break-even, now we’re selling at a loss. The Pinoy bread brands are really subsidized by us. We kept telling ourselves that it is okay if we do not make a profit since this is a CSR [corporate social responsibility] project [but] some of our members are already losing money,” he added.
Pinoy Tasty and Pinoy Pandesal account for at least 20 percent of the mass market.
The Department of Trade and Industry (DTI) is set to review within the week Philbaking’s petition to increase the price of Pinoy Pandesal to P27.50 per bag of 10 from P23.50/bag and Pinoy Tasty to P42.50 per loaf from the current P38.50.
Philbaking members composed of Gardenia Bakeries, French Baker, Uncle George, Tiffany, Fortune Bakeshop, and Marby have been selling budget breads for over a decade now.
Umali said the rising inflation rate due to increases in the price of inputs as well as power and fuel impacted the operations of commercial and community bakeries.
“More community bakeries have shut down due to their inability to compete. There was also a big bread company that acquired two smaller commercial bakeries,” he said.
“While the industry continues to be dynamic in the sense that there are many issues and opportunities happening simultaneously, the fact remains that we are very much challenged as of this time,” Umali added.
During the pandemic years of 2020 and 2021, bread sales dropped by 5 percent and 3 percent, respectively. For this year, figures are expected to be down by 5 percent.
Umali, however, said there is potential to rebound in the next two years, estimating an 8 percent growth in 2023 and 11 percent in 2024.
“Because the public is beginning to start buying bread once again. And we are prepared to serve their indulgences despite the higher cost of raw materials. We are slowly getting back from where we used to be,” Umali said.