New price set for flour

 THE Independent Consumer and Competition Commission says a new price arrangement has been determined for flour products.

This new price arrangement is a result of the recently competed final report on the flour industry pricing review conducted by the ICCC.

The final report, including the new pricing arrangement and key determinations, was competed and released on Nov 16. Commissioner and chief executive officer Paulus Ain said flour was an important source of food in Papua New Guinea.

“Therefore, the ICCC has undertaken this pricing review to ensure that flour is readily available and affordable,” Ain said.

He said ICCC decided to continue regulating the flour industry using price monitoring mechanism. 

Ain said in the event that there was a deviation between the monitored domestic price and international wheat prices, ICCC may at its discretion require local millers and major importers to provide additional cost information to give explanation on the possible causes of such deviations.

The final report stated that there was sufficient competition in the wholesale and retail markets, but overall the level of competition had not really increased since the last review in 2010.  

“The commission is aware that currently there is only one flour miller that has increased its overall market share and is the dominant supplier of flour in Papua New Guinea,” he said. 

“However, no single supplier had sufficient market power to increase prices without losing market share.”

Ain raised concerns that import tariffs had contributed to the higher cost of flour. 

He said the current tariff on flour products indicated that imports added approximately 14 toea per kilo to the price of flour, costing consumers K19 million per annum. 

“Because imports are an important contributor to competition, the Commission believes that consumers in PNG would be better off if tariffs on flour are completely removed,” Ain said.   

He said the new regulatory period for the new pricing arrangement was five years and would stop on June 30, 2020.