The current 40 percent tariff on imported mechanically deboned meat (MDM) under Customs Memorandum Circular (CMC) 131-2019 has pushed the production cost of some processed meat companies higher.
We are going to feel the effects maybe starting next month on our production because we still have stocks (purchased under) the old tariff rate.
This was learned on Monday from Frabelle Corp. president Fay Bernardo who said the business has seen production costs lifting higher by 35 percent as a consequence of the tariff imposition.
She particularly said the imposition of a higher tariff on imported meat products has an impact on future production.
Should the MDM tariff be reverted to 5 percent, however, more international companies like Johnsonville will be encouraged to come and invest in the country, Johnsville International Division president Michael Stayer Suprick added.
Frabelle Group of Companies president Francisco Tiu Laurel acknowledged should the government not heed the processed food manufacturers and keep the tariff rate elevated, local consumers can expect price hikes in processed goods prices down the line.
“The consumers have not felt it (now). But if the government will not put it back to 5 percent, then consumers all over the country can expect a price hike of at least 20 percent on the mid-priced to the economical priced hot dogs,” Laurel said.
“We are going to feel the effects maybe starting next month on our production because we still have stocks (purchased under) the old tariff rate. But I believe the government is looking into our association’s request to maintain the five percent chicken MDM only,” he added.
Local industry leaders hope the government soon sign the reversion to the 5-percent tariff and throw away the retroactive 35-percent charged by the Bureau of Customs on importers who have questioned the imposition for the benefit of consumers.