Milk prices should go down – DTI

MANILA, Philippines - Suggested retail prices (SRP) for milk products should go down by 34 to 50 percent due to declining prices of raw materials, the Department of Trade and Industry (DTI) said.

In a statement issued over the weekend, the DTI said its computations showed an almost 34 percent or P35.14 reduction in the SRP of condensed milk, 41 percent or P22.72 decline for evaporated milk and 50 percent or P25.56 decrease for powdered milk.

The DTI presented the computations – which took into account the 67-percent decline in the world prices of imported skimmed milk, a major component of milk products – during meetings held with manufacturers.

“Nestle (Philippines) responded that they are now in the process of doing their own computations and are expecting to have the results next week,” the DTI said, noting that a meeting will be held with the firm again this week.

Snow Mountain, manufacturer of milk brands Birch Tree and Angel, said it will keep its selling prices within SRPs, citing other price components of its products have increased.

Royal FrieslandCampina, behind the Alaska, Milkmaid and Alpine brands, shared a similar stance. However, it said it is willing to slash prices if other firms will do so as well.

The DTI, meanwhile, did not receive any feedback from Fonterra, so the firm is being asked to explain why it should maintain current SRPs.

Lower price caps for other goods such as bread and noodles are also expected amid the drop in other price components.

Based on DTI’s computations, pandesal prices should be reduced given the P286.51 decline in the price of LPG (liquefied petroleum gas) in January this year from last year.

Bakers said they have two options as a response to the DTI’s call to decrease prices: either to cut the price of pandesal by P0.15 or make each piece heavier by two grams.

Community bakers are set to meet with the DTI again this week after discussing the developments with their members.

As for noodles, the DTI’s computations showed there should be a P0.20 decrease per pack.

Noodle manufacturer Nissin Monde said it will come up with its own computations.

While manufacturers have not committed to decrease SRPs, citing the impact of port congestion, the DTI is optimistic that they will be adjusting the 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 (Republic Act) 7581,” the DTI said.