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UAE Ministry of Economy confirms commitment of retail and cooperative sectors to fix prices of selected food items

Alshihhi: Ministry to sign additional agreements, continue tours throughout centres and sales outlets
H.E. Mohammed Ahmed bin Abdulaziz Alshihhi, Undersecretary of the UAE Ministry of Economy , has confirmed that all major cooperative societies and retail companies throughout the country have signed Memorandums of Understanding (MoU) with the Ministry committing to maintain the prices of basic food commodities, without prejudice or increases.

H.E. Alshihhi revealed during a press statement delivered yesterday (Sunday, May 18, 2008) that its Department of Consumer Protection continues to visit various establishments to ensure that the MoUs' terms are being enforced and that the price levels of agreed-upon products remain as they were in 2007.

"During the last monitoring period, the MoE did not receive any consumer complaints on price increases for the selected commodities," said H.E. Alshihhi.

Emphasizing the need for closer cooperation between consumers and the MoE through the Department of Consumer Protection, the Ministry is urging the public to report any irregularities in agreed-upon commodity prices to the 60522225 hotline or to the MoE 's website. H.E. Alshihhi assured that appropriate actions will be taken against confirmed violators.

"The Ministry of Economy has prepared several actions and initiatives that will contribute significantly to improved consumer awareness on the status of basic goods and food commodities, including lists of products and prices as committed by all the cooperative societies and retail companies on the web site of the Ministry to be used as guides by consumers," said Alshihhi.

H.E. Alshihhi expressed his pleasure and gratitude towards the cooperative societies and major retail companies that agreed to the price freeze, both for supporting Ministry initiatives in general and showing their eagerness to support the MoUs on selected commodities in particular. He explained that their cooperation in curbing price increases within the local market, particularly those of basic food commodities, contributes significantly to the UAE's development strategy.

H.E. Alshihhi added that the support shown by the cooperative societies and major retail companies for MoE initiatives to stabilize the prices of basic commodities reflects their social responsibility and their vital role in stabilizing commodity prices and maintaining market balance.

He also called on cooperative societies and retail companies that have not yet signed pricing agreements to join the MoE 's initiatives in order to fight monopoly, price increases, and greed, and support positive supply and demand mechanisms while maintaining the stability of the local market.

H.E. Alshihhi emphasized that the MoE will exert extra effort to assist cooperatives and retail companies in facing various market and operational challenges and thus optimize the service market and consequently promote national economic development.

He also noted that the Ministry will continue, in cooperation with concerned parties, to monitor any monopoly or exploitation that may threaten the stability of the market, explaining that maintaining market balance and consumer protection is not the sole responsibility of the MoE , but rather a shared responsibility between federal and civil groups, in their common goal of eliminating negative practices that are detrimental to consumers, the society, and the national economy.

H.E. Alshihhi called on merchants, organizations, and cooperative societies to benefit from amendments to Federal Law No. 18 of 1981 on the organization of commercial dealership that were issued in early June 2006, based on Cabinet Decision no. 1/538 of 2005 concerning the revocation of 15 basic commodities from the commercial dealership register, thus allowing their unconditional importation and consequently significantly contributing to the reduction of price hikes and inflation.

He explained that the MoE encourages cooperative societies to import basic food commodities collectively through cooperative unions, as this move encourages preferential and competitive prices within the market, to the advantage of consumers, cooperatives, and local markets. He noted that the Ministry has removed 27 basic food commodity dealerships since the issuance of the commodity law amendments.

Since the beginning of 2008, the Ministry has promoted the stabilization of the prices of several basic food commodities to 2007 levels; it has specifically signed MoUs with Carrefour to stabilize the prices of 52 basic food commodities; with the Lulu Hypermarkets group to fix the prices of 32 similar products; with Union Cooperative Society covering 16 food commodities; and with Bani Yas cooperative society for the fixed prices of 56 basic food products, as the first phase of its stabilization campaign.

The food commodities covered by these MoUs include the various types of rice; sugar; oil; flour; margarine; tea; salt; dairy products; tomato paste; legumes; chicken; meat; cheese; eggs; water; and bread.

The Ministry of Economy intends to sign similar MoUs in the near future, in a bid to convince other companies and cooperative societies to stabilize the prices of many commodities and food products to 2007 levels.

The MoE has likewise signed a MoU with cement producers that covers the reduction of prices and the increasing of local production to contribute to the stability of the local cement market and the eradication of monopolies and exploitative activities that undermine the local market and the concept of free economy in the UAE.

Other cooperative societies such as the Abu Dhabi Cooperative Society and Al Dhafra Co-Operative Society have responded favorably to the MoE 's invitation to reduce the prices of all basic food commodities and sell them at cost to the public, so as to control price increases and maintain market balance and stability.

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Najlla Abualqasem
Media Department, Ministry of Economy
Tel: 02-6268077
E-mail: Najlla_a@economy.com

© Press Release 2008