Atty. Demosthenes B. Donato, ESQ

October 28, 1998 Atty. Demosthenes B. Donato, ESQ Suite 1201, 12/F Herrera Tower 98 Herrera cor. Valero Streets Salcedo Village, Makati City S i r : This refers to your letter dated October 15, 1998, requesting confirmation of your opinion that sale by a manufacturer of feed products to commercial growers of livestock does not constitute "retail trade" as contemplated under the Retail Trade Law. llcd Republic Act No. 1180, as amended, by PD No. 714, otherwise known as the Retail Trade Law, is explicit that sale of producer goods used for industry or business is not treated as retail business. Said law provides: "SECTION 4. As used in this Act, the term " retail business " shall mean any act, occupation or calling of habitually selling direct to the general public merchandise, commodities or goods for consumption, but shall not include : xxx xxx xxx (c) a manufacturer or processor selling to industrial and commercial users or consumers who use the products bought by them to render service to the general public and/or to produce or manufacture goods which are in turn sold by them." (Emphasis supplied) Thus, the Supreme Court, in the case of Marsman & Company, Inc. vs. First Coconut Central Company, Inc. (G.R. No. L-39841, June 20, 1988) ruled: ". . . As such, the sale of producer goods used for industry or business is classified as wholesale transaction . xxx xxx xxx "That the sales to industrial or commercial users do not fall within the scope of the Retail Trade Nationalization Law is further confirmed by Presidential Decree No. 714 promulgated on May 28, 1975 amending said law when the latter provided in its preamble that "Whereas, it is believed to be not within the intendment of said nationalization law to include within its scopes sales made to industrial or commercial users or consumers ; . . ." (Emphasis supplied) On the basis of the foregoing, we confirm your opinion that the sale by a manufacturer of feed products to commercial growers of livestock does not constitute retail trade as contemplated under the Retail Trade Law. Very truly yours, (SGD.) DANILO L. CONCEPCION Associate Commissioner