Local bakers decided to continue the price freeze on budget bread Pinoy Tasty and Pinoy Pandesal to keep affordable breads at arm’s reach for every Filipino family, while the country is still in a state of crisis.
Philippine Baking Industry Group (Philbaking) president Johnlu Koa said the practice has been a tradition by its members composed of Classic Bakers, Creative Bakers (Walter), The French Baker, Gardenia Bakeries, Julie’s Bakeshop, Marby, MLM (Fortune), Tiffany and Uncle George, notwithstanding the increasing cost of imported flour.
“We are absorbing the increased cost for as long as we can. We are selling at marginal profits, enough to keep manufacturing going and to keep our workers,” Koa said.
Budget bread makers have been absorbing the added cost when it should be imposing at least P3.50 per loaf as the price of imported flour continues to fluctuate upwards, he said.
The rule of thumb is bread prices should increase by P1 per pack or loaf for every P50 increase in flour prices. At this point, the impact of imported flour price hike is already at 10 percent of the current P35 per loaf for Pinoy Tasty and Pinoy Pandesal, which retails at P21.50 per bag of 10 pieces.
While Philbaking is taking the brunt of the rising prices of raw materials, it said that eventually there’s no salvation for bakers who continue to be on the losing end.
“If we keep this rate of unprofitability, we might as well close our bakeries. We’ve been keeping marginal profits and the price of Pinoy breads has not moved in 5 years,” Koa said.
To maintain the current pricing of Pinoy breads, he disclosed that the group will be increasing the price of their own brands by 3 to 5 percent to partially cover the increases in basic ingredients like flour, sugar, vegetable oil, and milk.
“The nice thing about the pandemic is what we call economic compassion. We had no discussions on extending the price freeze, everything had been spontaneous. We just voted unanimously,” he added.
The group members, he said, can only hold their prices till end-December 2021. After that, they have to manage margins and will make an announcement after the holidays.
Meanwhile, the Department of Trade and Industry welcomed the good news from the bread industry, which came at the perfect time as the government continues to bring the prices of basic necessities and prime commodities down to reasonable levels.
The budget bread project is a collaboration between the DTI and the bakers’ group, which underscores the industry’s corporate social responsibility to provide accessible and affordable bakery products to the consumers. This project triggered the proliferation of many other reasonably-priced loaves and breads in the market.
Pinoy Tasty and Pinoy Pandesal are available across the entire Luzon and key cities in the Visayas region to sufficiently supply the demands and bread requirements of the Filipino masses.
Philbaking is an association of medium-to-large bakeries that supply mostly to supermarket chains and convenience stores. It was created to address the skyrocketing flour prices affecting our industry sales.