DUE to the unavailability of some menu items in a number of Jollibee stores, the listed fast-food giant is now seeking to import chicken products under a low-tariff scheme, the Department of Agriculture (DA) said on Wednesday.
In a telephone interview, DA Undersecretary Jose Reano said there are ongoing discussions with Jollibee Foods Corp. (JFC) over the possible importation of chicken under the minimum access volume (MAV).
“They have expressed their intention to import. They want to use MAV, but they have yet to submit their volume requirement,” Reano told The Manila Times.
MAV refers to the minimum volume of farm produce allowed to enter into the Philippines at reduced tariff. For chicken products, the in-quota duty was pegged 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,” the official noted.
“Right now, Kentucky (KFC Corp.) is the only institutional importer of chicken under MAV,” he added.
The importation plan comes on the heels of Typhoon Glenda, which inflicted massive damage in the agriculture sector and affected the supply of chicken in Southern Luzon.
Reano said that one of the affected poultry growers was San Miguel Corp., which currently controls 55 percent of the chicken market. San Miguel also supplies chicken to JFC.
“San Miguel is one of the hardest hit by Glenda. But considering their size, it is still has a relatively minimal effect in their supply chain. They could easily recover and we expect them to be back to normal operations by November,” Reano said.
JFC was supposed to meet with Agriculture Secretary Proceso Alcala on Tuesday but the meeting was cancelled at the last minute.
In a disclosure to the Philippine Stock Exchange on Wednesday, JFC chief executive officer Ernesto Tanmantiong said they are doing their best to restore the availability of products in Jollibee stores as soon as possible.
“We have taken immediate measures to augment our delivery capability to our stores. We have also engaged international experts and invested in additional resources to fix the systems upgrade problem at the soonest possible time,” Tanmantiong said.
The executive said JFC is looking forward to a sustained growth of the business, saying that despite the present product distribution issue, JFC will be able to continue to grow sales in the entire second semester of 2014 by the same rate of growth as in the first semester of2014.
JFC informed its investors last week that the migration to new systems that started on August 1 has resulted in a temporary slowdown in sales order taking, product loading and dispatch of transportation. As a result, the JFC group has not been able to serve consumers to the extent of 6 percent of its normal nationwide sales in the first seven days of August.
The Jollibee Group also said that it has sufficient raw materials, finished products and production capacity to meet consumer demand for the entire month of August and for the months ahead, both for local and imported goods, in line with its sales and product supply planning.
“The products are in the com—pany’s various commissaries, warehouses and logistics center. JFC will also enhance its transportation delivery capability in the months ahead,” it said.