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29 March 2024

Restaurants warned against hiking rates

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By Staff

UAE authorities have sent a strong warning to restaurants not to raise their prices without a prior official consent, saying they would not tolerate any plan to form blocs against consumers.

The ministry of economy said it would send inspectors to restaurants seeking to raise prices to check their operational costs, annual profits and cost so of labour before giving its consent to their request.

The ministry issued the warning after a joint meeting between its consumer protection department and the Abu Dhabi Department of Economic Development, according to press reports.

“You are not allowed to raise your prices without a prior written consent from the higher committee for the consumers protection…any application for a price rise by restaurants must include reasons for this rise, its percentage and date. Restaurants must provide documents verifying their requests,” it said.

A senior ministry official criticized restaurants for rushing to raise meal prices when there is an increase in petrol and other raw materials, which could push up their costs.

“We have not heard about one single restaurant owner who raised meal prices because of the increase in the price of raw materials then cut the meal price after raw materials prices return to previous levels,” said Hashem Al Nuaimi, director of the consumers protection department at the ministry of economy.

“We already have an experience with these restaurants when there was a sharp increase in global prices in 2008 before they plunged as a result of the global financial crisis…plans by some restaurants to increase their prices now raise many questions…I think restaurants should embark on a restructuring of their business to cut costs and then to raise prices as a last option.”