"It would be difficult to hold on to prices if government decides after all to increase the tariff on imported tinplates which is the basic material for cans and it will definitely affect our pricing. At the outset we see a four-percent increase in prices of canned meat products," said Francisco Buencamino, executive director of the Philippine Association of Meat Processors of the Philippines Inc. (PAMPI).
PAMPI members, which include the likes of Purefoods-Hormel, Swift Foods Inc. and CDO-Foodsphere Inc., have opposed moves to raise the tariff on imported tinplates since it compromises a major portion of their production costs.
"Since packaging is a major cost component of the food industry, one can expect this cost to be passed on somehow to consumers," said Buencanmino.
An increase in the tariff wall on imported tinplates is being sought by Global Infrastructure Holdings Ltd. of India which acquired the National Steel Corp. (NSC). Global Holdings, the principal holding company of Ispat Industries Ltd., a market leader in India’s steel industry, bagged the contract to rehabilitate NSC but in exchange for its investments, wants protection from foreign suppliers of steel products.
Buencamino said that prices could go up further if the current 10 percent value-added-tax (VAT) will be raised to 12 percent. This measure, being pushed by the Arroyo administration to beef up government coffers, is now being deliberated at the Senate.
"Meat processors are worried that if prices continue to increase this year, there is a risk that the flow of food supply may get interrupted."