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Pack Bread Price In Peril? #469929
08/10/13 05:01 AM
08/10/13 05:01 AM
Joined: Oct 1999
Posts: 77,931
oregon, spr
Marty Offline OP

Marty  Offline OP

Baker Says New Law Protects ADM, Punishes Bakers

Yesterday at the House of Representatives, there were 13 bills tabled – and none of them made the news. That's because the majority were legislative housekeeping matters, and one of them looked like a non-descript revenue measure, but one baker says, it could force up the price of your pack bread!

It's called the Customs and Excise Duties Amendment Bill – and it imposes a hundred percent duty tariff on imported flour – up from 25%.

The background to the bill is that in February all restrictions on imported flour were lifted – and merchants started bringing in flour from Mexico. So bakers started buying that flour at 69 dollars a sack, twelve dollars cheaper per sack than it is sold locally.

That was good for them, but it drove down ADM's sales, and so yesterday, the House Passed a revenue measure to impose a heavy tariff on imported flour – which will make it much more expensive than the locally produced flour.

As the Prime Minister explained when he tabled it for a second reading, the bill is to protect ADM Belize Mills, which produces Belize's Flour:

Hon. Dean Barrow - Prime Minister of Belize
"We've taken imported flour off the restricted list and so there's no longer a need for permit to import for but we are taking up the duty, in order to protect the local flour industry. Now, there are some who might say - perhaps the local flour industry ought not to be protected any longer, then we're looking at the questions of jobs, investment- vis-à-vis the fact that if you do decide you're not going to worry about the local flour manufacturing you can then bring in the imported flour more cheaper. There's always a question of the consumer versus the employment and the company, as of this juncture we feel that it is better to preserve the local flour manufacturing - so this is by way of giving them the sort of protection that would mean that the imported flour would not drive them out of business."

And while that was passed by the House yesterday – today one baker told us it will have far reaching effects on his industry – which comes right down to that pack of bread you bought for one dollars and 75 cents this evening.

Abner Perez, who has bakeries in Belmopan and San Pedro says that protecting ADM means punishing Belize's Bakers:

Abner Perez - Owner, Casa Pan Dulce Bakery
"Right now we've been getting a special flour from Mexico that is almost at $69.00 a bag to produce the 16 oz loaf bread which is price controlled from way back at a $1.50 per loaf of bread to retail at $1.75. That was way back when the sack of flour was selling at $56.00 - and today it is at $81.00. So do the math, if we are consuming so many bags of flour at $69.00 and we are subjected to buying $81.00 - that's a big blow for us, to the baking industry. I have consulted with several of the people that have been in the industry, especially those that are producing the loaf breads at 16oz and one of those bakers suggested to me today that they are seriously considering quitting making loaf breads and just making other breads but they will be cutting their staff to almost half. According to a statistics in the bakery industry - the last time we did a spot check, combining all the bakers - directly employed about 1000 people. I have over 60 employees and I'm not the largest baker in this country, it's not looking for me and it's not looking good for the baking industry."

Jules Vasquez
"However, the bottom line is that you all want to buy imported flour when we have good, high quality flour produced at ADM in Belize."

Abner Perez
"Personally from my view, I am committed to buying Belizean and if I have to somewhere cheaper because of hard times then I will do so but I want to roll out another fact that the price for wheat right now is selling on the current market at an all time low and it is going down lower and yet they are going to tell me that we're going to get tied down to buy flour from the Mills at $81.00. The mills must come down drastically with that prices of flour - I'm not talking about $5.00, I'm talking nothing less than $10.00. Believe you, me the mills will still be making money."

The manager of ADM Belize Mills could not comment – but the CEO in the Ministry of Trade Mike Singh told us that the 25% tariff on flour imported Mexico was a violation of CARICOM regulations because items imported from outside CARICOM should be in a higher tariff bracket. He says had government not acted, cheap Mexican imports would have put ADM out of business.

As for the world wheat prices trending down, Singh said that ADM Belize Mills contracts to buy months in advance – so that they can lock into a price for stability. So, currently, the local price would not reflect immediate changes.

Channel 7

Re: Pack Bread Price In Peril? [Re: Marty] #469936
08/10/13 05:35 AM
08/10/13 05:35 AM
Joined: Oct 1999
Posts: 77,931
oregon, spr
Marty Offline OP

Marty  Offline OP

Cheaper Mexican flour or Belize ADM flour?

The Customs and Excise Duties Amendment Bill was one of the thirteen bills tabled at the House of Representatives on Wednesday. The bill essentially increases the import duty on flour from twenty-five percent to one hundred percent. Earlier in the year, when bakers were allowed to import freely, they enjoyed a substantial cost reduction on flour from Mexico than from flour produced at ADM Belize Mills. Andre Perez, a Baker from Belmopan, believes that the price of bread and other wheat products could go up since the Mexican product is now more expensive. The baker also says that the government is saving the jobs of thirty Belize ADM employees, which pales in comparison to over a thousand individuals who work at bakeries across the country.

Andre Perez, Baker

“The bill that passed is just clearing up that since I think February or March, anybody could import flour…in other words you didn’t need a permit from supplies control to bring in import flour from Mexico or Guatemala. However, the duty on it was somewhere around twenty percent; twenty-four percent plus two percent environmental tax. But what the nation did not notice is that what passed there included also the raising of the duty. It went up to one hundred percent plus two percent environmental tax. So essentially making it no sense to go across the border with the prices that we are getting because it is talking about more expensive flour than what we are getting here in Belize.”


Andre Perez

“Tell me why it was necessary for you all, the bakers, to go to look for imported flour. What’s the situation with ADM and their local flour?”

Andre Perez

“The problem is the price. The price of flour right now is at an all time high—somewhere around eighty-six dollars. We only gone down like five dollars. But it has gone up for the past few years from fifty-six dollars all the way to eighty-one. Our point on this side is that we have been producing the loaf bread, the price controlled loaf bread at a dollar fifty wholesale to retail at one seventy-five. Now you do the maths when producing with a sack of flour, fifty six and now paying at eighty-one. That prompted us to look other ways and if the market was open to import, well that’s what we did because we were bringing in flour at a lot less price than what we are paying here in Belize.”


“But now you will be forced to go to back ADM?”

Andre Perez

“Yes we do.”


“And what will be the impact of that on the cost of bread?”

Andre Perez

“We’ll obviously we have some choices that we are looking at and as I am speaking to you, we have gotten in contact with most of the larger producing bakers and we are trying to take a position on this and we are shortly having a meeting to discuss it. But we have options on the table; however, it is not something that we are hiding and we will come out swinging or something. What we are saying is that all the information, statistics, we have provided not only to the people of the association, but to government. The Bureau of Standards has all the information in terms of prices of wheat, what it costs right now which is at an all time low and continues to go down. And we have shown that to the government already…that the prices that is being sold here in Belize is not fair; it should be lower. And its effect is purchasing flour elsewhere that is cheaper—Mexico and Guatemala. So what we are saying is that we cannot survive. We cannot survive this. Essentially we have no choice, but buy flour at eighty-one dollars. Whether any kind of reductions or rebates, it doesn’t make any sense; we need a substantial decrease in flour and they can to it. And the government has the statistics showing them that yes eighty-one dollars is way too high and we need to get prices lower down. That’s one option we are showing for the government to look at that or else, we as an association cannot survive producing bread at buying one sack of flour at eighty-one and selling for one-fifty. We have to look at an increase in price. And the price control will have to do it because we have to survive.”


“Has there been any attempt at this discussion with ADM about the prices; maybe looking at lowering the price?”

Andre Perez

“We are making attempts right now as I speak to you; we are trying to do something here, but we are looking at all the options. It is not something that we are trying to be radicals or rebels or anything. What we are doing is to try and find a solution to this. And we have done, personally me as a businessman, I have done my best to liaise and negotiate as much as possible with the milling company as well as with government.”


“If there is no negotiation by ADM, if the price remains the same at eighty-one dollars per sack, if there is no move by government to help to subsidize or something in some way, you will have to look at cutting employees.”

Andre Perez

“For sure, looking at options as cutting employees—I’m said to say but it is a reality or if we come to an agreement with bakers, which we are trying to organize it by next week, we have to look at raising prices.”

The bakers will hold a meeting very soon to consider their options. One of the main issues is whether or not consumers would see the local flour mill close down and have an exclusive dependency on foreign or imported flour. 

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