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Price cap cost Dh60m during Ramadan

Monday, Aug 13, 2012

Dubai: UAE retailers have collectively taken at least a Dh60 million hit to their profits during Ramadan by agreeing to the government’s price caps on 1,600 products, a senior official told Gulf News.

Dr Hashim Al Nuaimi, director of the Consumer Protection Department at the Ministry of Economy (MoE), said over 360 retailers across UAE have agreed to freeze prices of selected commodities and have accepted to bear the costs involved in the effort, which the MoE has estimated at Dh60 million.

His comments came during a tour of the Emirates Cooperative in Al Twar, as part of a series of trips to monitor prices and make sure outlets are abiding by the consumer protection law.

The campaign to freeze prices major commodities was launched by the MoE at different outlets across the country.

Hard to convince

Al Nuaimi said convincing retailers to put a cap on prices of certain products was a hard task.

He added: “We are trying to create a competitive atmosphere among outlets and encourage them to retain prices at the same level even if there are fluctuations in raw material costs locally and globally. “We are committed to strengthening the framework for communication and dialogue with all retail outlets in the UAE.”

He added: “Some retailers have agreed to lower prices to the wholesale level, while others will cut prices by up to 50 per cent.”

Al Nuaimi told Gulf News that he was very satisfied with the response from retailers and pointed out that the number of stores violating rules this year is very small.

“The Ministry is seeking to extend the process of capping prices to more products,” he said.

Major outlets involved

Outlets joining the ministry’s initiative include Carrefour, Cooperative Societies, Lulu Hypermarket and Spinneys, which together account for 75 per cent of the retail market share in the country in their segments, Al Nuaimi said.

Prices of staple foods such as rice, flour, meat, tea, bottled water and pasta, as well as household goods such as washing liquid, have been frozen at their current levels.

Farid Ali, General Manager of Emirates Cooperative, said the caps have been placed on prices of 470 products across their outlets, including essential goods like rice, sugar, milk, flour, eggs and chicken.

“We sell these commodities at prices less than the cost value.”

“The price cape has cost Emirates CO-OP a total of Dh8 million during Ramadan alone while it has been estimated of over Dh25 million along 2012.”

“This initiative is an ideal model that has had a positive impact on the performance of consumer markets,” Ali said.

It is important to have constant coordination between the ministry, the government, retail outlets and consumers to be prepared for any variable that may affect prices and market stability, he added.

By Zaher Bitar Senior Reporter

Gulf News 2012. All rights reserved.

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