Sardines canners have scored the Department of Trade and Industry (DTI) for crafting a proposed department administrative order (DAO) on products under price monitor, citing the lack of legal foundation and enabling law that will support the Suggested Retail Price (SRP) monitoring function of the agency.
The Canned Sardines Association of the Philippines (CSAP) said, however, that it would be wiser for members to defer any action to the draft DAO “until an effort to establish an enabling law will support the DAO.”
“We believe that the Price Act must be amended or updated. DTI cannot issue a DAO without an enabling law to support it. Penalizing retailers and manufacturers for non-observance of the SRP thru monitoring letters, rebates, and pull-out of products will constitute a prohibited act of price control that is neither price freeze nor price ceiling,” said CSAP executive director Francisco Buencamino.
The group alleged that under the Price Act, there are only two instances when the government can exercise price control—and these are price freeze and price ceiling. There is no mention of SRP in the law.
Under the SRP function of the DTI, the department may sanction or threaten to sanction supermarkets for non-observance of SRP, compelling manufacturers to adjust prices to the SRP even though there is no price freeze or a price ceiling.
“Our manufacturers are compelled to accept “losses” mandated by the enforcement. We, the manufacturers, need a balanced concern of the DTI to protect our rights to earn reasonable profits of doing legitimate business,” the group said in its position paper in the draft DAO submitted to the DTI on June 13, 2022.
The group argued that since the SRP is a list of “suggested” pricing, the Price Act merely makes the SRP recommendatory.
Buencamino revealed that some group members who consulted their legal advisers have cautioned their participation to the proposed guidelines on SRP’s enforcement because our mere participation will be deemed as an ultra vires act of price control.
He underscored a list of factors that the group considers in raising sardines prices like the susceptability of fish prices to catch volume and international demand; increasing freight rates; increasing add-on costs selling to supermarkets; high listing fee to introduce new brands; and constant de-listing of slow-moving brands; and increased government regulation fees in almost all agencies.
The group has also observed that the DTI considers SRP products to be unavailable when the monitoring report cannot find these brands in the supermarket.
“CSAP needs to argue, in its defense, that these brands may not be in supermarkets because these low-cost products cannot afford the “listing fee” requirements of supermarkets. However, these products are indeed present and sold in other market channels that are more affordable to a greater number of our consumers,” CSAP said.
“By our analysis, the proposed basis for delisting/enlisting some brands from SRP exclusion/inclusion is without genuine consultation,” the group added.
As proposed in the draft DAO, the basis for listing provided under Rule IV, Section 1 and Section 2 should be a co- joined decision of both the government and the manufacturers.
CSAP called for the conduct of a workshop on the proposed DAO instead of simply presenting a draft DAO for implementation.