Jollibee asking permit to import chicken - DA

by Aladin S. Diega, BusinessMirror

Posted at Aug 14 2014 09:25 AM | Updated as of Aug 14 2014 05:59 PM

MANILA -- To address the limited chicken supply in some of its branches, listed fast-food giant Jollibee Foods Corp. (JFC) has asked the government for a permit to import chicken products under a low-tariff scheme, the Department of Agriculture (DA) said on Wednesday.

“There is an ongoing discussion with Jollibee over possible importation of chicken under the Minimum Access Volume [MAV],” Agriculture Undersecretary Jose Reaño told reporters on Wednesday.

Reaño added the company “has expressed  its  intention” to import, using the MAV, under the World Trade Organization.

“They have yet to submit their volume requirement,” Reaño said.

MAV is the volume of agricultural produce allowed to enter the country at reduced tariffs. For chicken products, the in-quota duty is at 40 percent, while out-quota shipments pay higher rates of 70 percent.

“It will be the first time that JFC will source its chicken outside the Philippines after shifting to local producers over three years ago,” Reaño added.

“Right now, Kentucky [KFC Corp.] is the only institutional importer of chicken under MAV,” he added.

Reaño spoke nearly a week after JFC reported having closed some of its stores for having “limited menu.”

The company said in a statement on August 8, “as a result of a limited availability of its products,” it had to “temporarily close down” 72 of its total 2,244 stores nationwide. The company, however, did not say when operations will return to normal.

In its income statement on August 13, JFC blamed “migration” to a new system that affected the dispatch of its products from the commissaries and warehouses to the stores.

The company said it has sufficient raw materials to meet consumer demands for the entire month of August.

Days later, the DA announced that Typhoon Glenda resulted in considerable damage to the agriculture sector and affected the supply of chicken in Southern Luzon.

Reaño said that one of the affected poultry growers include San Miguel Corp., which currently controls 55 percent of the chicken market. San Miguel also supplies chicken to JFC, Reaño said.

“San Miguel is one of the hardest hit by Glenda. But considering their size, it still has a relatively minimal effect in their supply chain. They could easily recovery and we expect them to be back in normal operations by November,” Reaño said.

The DA said that JFC executives were scheduled to meet with Agriculture Secretary Proceso J. Alcala on Tuesday.

However, the meeting was canceled, with the DA not saying if Alcala or JFC representatives asked for the postponement of the discussion. -- With VG Cabuag