Liberty Flour ends licensing accord with General Mills

MANILA, Philippines - Liberty Flour Mills (LFM) announced that it has ended its licensing agreement with General Mills Inc. for the production and sale of the Gold Medal flour brand in the Philippines last May after disagreeing with its foreign partner on contract extension terms.

Felix K. Maramba Jr., president and chief executive officer of LFM, said they decided to end the contract after General Mills asked for an eight-percent royalty for a three-year extension period, which according to Maramba was 1.5 percent more than the previous royalty of only 6.5 percent and the period shorter than the usual five-year contract.

“General Mills eventually agreed to a 6.5-percent royalty but for only one year which we at LFM felt was too short. When their licensing agreement started, the royalty was only two percent,” Maramba said.

“We ended negotiations at that stage and officially informed them of our decision on May 14 this year,” Maramba added. “We were thus disappointed to read news reports recently saying it was General Mills that terminated the contract and we believe this should be corrected.”

Aside from the Philippines, the Gold Medal brand is not marketed anywhere else outside of the United States. “We built the brand, nurtured it and continually stroved for excellence as befits reputable companies. That the product consistently ranked number one in the Philippine market is a testament to the superior quality and high quality image LFM projected in our marketing programs. We did not receive any technical support from General Mills during those years and even after,” Maramba added.

Maramba said LFM will now concentrate on marketing its own Maya brand of flour products and mixes. These include Maya Hotcake Mix, Maya Complete Hotcake Mix, Maya Oven Toaster Mixes, Maya Brownie Mixes, Maya Decadence Mixes, Maya Cake Flour, maya All Purpose Flur and Maya Cornstarch.

Dropping the American brand will not affect LFM’s bottomline as it only represents one percent of LFM’s income, Maramba added.

General Mills USA is not associated with General Milling Corp. (GMC) a Cebu-based flour mill.

LFM is one of the Philippines best known flour milling company producing premium flour products such as “El Superior” and LFM Bakers which are the dominant and preferred brands in Metro Manila and Luzon where LFM enjoys a wide marketing reach. 

Aside from flour milling, LFM is also into food processing, animal feeds production, agricultural pesticides and fertilizer business, bakery sciences and culinary instruction and real estate.