Meat processors to cut production if price increase rejected

MANILA, Philippines — Some meat processors could be forced to cut production if the petition to increase prices of their processed and canned products amid rising costs of raw materials and tight supply is not approved by the government, an industry group said.

In a Viber message to The STAR, Philippine Association of Meat Processors Inc. (PAMPI) vice president Jerome Ong confirmed that the group has submitted its request to the Department of Trade and Industry (DTI) for a five to nine percent increase on its processed and canned meat loaf, luncheon meat and corned beef products.

“This is because of the scarcity of raw materials, particularly MDM (mechanically deboned meat) chicken and beef as well as tin cans and other packaging materials,” Ong said, adding this is caused by the continued countrywide bans on major sources of MDM.

“Our production cost has already increased by 25 to 30 percent, yet we are only asking for a minimal adjustment, as we want to avoid additional burden to consumers,” Ong said.

“We are really hoping that the DTI allows us to adjust,” he said.

Ong said several PAMPI members have indicated that they have no choice but to cut back on production if the petition to increase the price is not approved, which will result in layoffs.

“Right now, some processors are reporting material shortages of 10-15 percent of what they need but this will just explode to much higher numbers when we all can no longer afford to buy materials – maybe as much as 50 percent shortage,” Ong said.

With the ban on poultry imports from a number of countries due to outbreaks of the H5N8 highly pathogenic avian influenza (HPAI), Ong said that remaining countries that are open can only supply about 40 to 45 percent of the requirement of processors, as prices from these countries have already skyrocketed.

At present, poultry imports from the United Kingdom, Germany and the Netherlands are temporarily banned from entering the country, comprising about 60 percent of local processors’ MDM chicken supply.

On top of this, bans are also imposed on countries such as Denmark, France, Sweden, Russia, Poland and Czech Republic.

“Unemployment threat is directly proportionate to the reduction in production output, so if our output is reduced by 50 percent, manpower could be cut by 50 percent too,” Ong said.

“That is no joke. If 100,000 of our workers are involved, that’s a job loss of 50,000,” he added.

Ong said the request for a minimal increase in the prices of their products will allow processors to give consumers more affordable options.

“Pork, chicken and fish have become too expensive for the masses, and processed meats provide them with an affordable option,” Ong said.

“We want to continue doing that, but we need a little help, hence this request to the DTI for a minimal increase so that we can survive and continue to serve,” he added.

Apart from the petition to increase prices of processed products, Ong said PAMPI has also submitted several proposals to the Department of Agriculture (DA) to reconsider countrywide bans and instead implement zonal bans, meaning bans are limited to zones within countries that have not eradicated bird flu.

“Discussions are ongoing, but we hope they can resolve the issue soon,” Ong said.

The Meat Importers and Traders Association (MITA) earlier submitted similar proposals to the DA to implement zonal bans instead of imposing countrywide restrictions.

Agriculture groups, however, have opposed the proposal, saying it could add more problems to the local agriculture industry already plagued by African swine fever (ASF).

“We are against any lifting of ban on countries that have bird flu. We do not want another ASF outbreak in the making,” Samahang Industriya ng Agrikultura (SINAG) chairman Rosendo So told The STAR earlier.

“If you’ve seen what happened with ASF, if this happens to our local produce of chicken – because it’s not only chicken that will be hit, even layer chickens, quail and ducks – this will be a wider problem if bird flu enters the country,” So said in Filipino.