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UAE Government to Slash Food Prices

UAE to slash food costs as global prices plunge

DUBAI – The United Arab Emirates said on Tuesday it would move to bring down the cost of basic food items charged by retailers because they were no longer appropriate following a slump in world commodity prices.

The second-largest Arab economy last year signed a series of agreements with supermarket chains to fix the cost of basic food items such as sugar, cooking oil, rice and flour at 2007 levels in an effort to curb inflation at a 20-year peak.

But many of those prices now exceed the global average by 25 percent after oil prices collapsed almost $100 a barrel from a peak last July, said Hashim Saeed Al-Neaimi, the manager of consumer protection at the UAE’s Ministry of Economy.

“We need to match the overall downturn in global food prices,” Neaimi told Reuters.

The ministry planned to sign new deals with retailers to reduce fixed selling prices for foods, which would also cut into retailers’ profit margins, he said.

“Since food prices have gone down globally it is only fair to bring them down here too and this will take effect in about one to two weeks’ time,” Neaimi said…SOURCE

Supermarket Chains Offering Price Reductions in March

Some of the major supermarkets have agreed to sell selected basic foods and other necessities at cost for the month of March, a saving to consumers of up to 30 per cent, according to Government officials.

The consumer protection department at the Ministry of Economy has worked out a programme with participating shops, that will discount up to 1,000 items, as part of Gulf Consumer Protection Day.

“I tried to co-ordinate with all sectors, the private sectors and also the co-ops to try and help the consumer,” said Dr Hashim al Neaimi, the manager of the consumer protection department. “These are strategic items, such as rice, flour, sugar and oil.”

Participating retailers include Abu Dhabi Co-operative Society, which is discounting 235 items, and Lulu Hypermarkets, which is selling about 50 items at the supplier’s price.

These items at Lulu include Brazilian chicken, which has been reduced from Dh9.50 (US$3.40) per kg to Dh8.50 per kg, but also non-food items such as toothbrushes, said V Nandakumar, the corporate communication director at Emke Group, which runs LuLu Hypermarkets.

Discounts range between 10 and 30 per cent, and Lulu may add more items to the list, and possibly continue with the profit-free pricing programme after March 31, he said.

“We are going to make less money than we were making before, but it is something that we felt strongly about,” Mr Nandakumar said.

The consumer protection department has already been working with retailers to freeze or reduce the prices of key foodstuffs after hit a record high of 12 per cent in March last year…SOURCE