Inflation fuels demand for subsidies
(KHAMEIS AL HEFAITY)
The Emirates Society for Consumer Protection has urged the government to subsidise basic food items in order to curb rising prices, which are expected to rise by 40 per cent this year.Food prices in the UAE, which pegs its currency to the dollar, rose by 30 per cent last year and are expected to be on the upward spiral this year too.
However, the market is apprehensive about the financial feasibility of such an ambitious demand. Representatives of the retail sector conveyed their helplessness to secure the demand from consumer protection groups.
Abu Dhabi Co-operative Society feels introducing subsidies is not a feasible idea. Bejoy Thomas, marketing manager of Adcoops, said: “There is a lot of oil money in the country but that’s one side of the coin. If you look at the other, the government is already subsiding oil, so it is losing money anyway. In a no-tax economy, subsidies usually do not exist but if the government wants to help the retailers it will be good for the consumers but I don’t see it happening.”
At the same time the Compliance Division at the Dubai Department of Economic Development (DED) is organising awareness programmes in co-ordination with the Ministry of Economy as part of the third Gulf Consumer Protection Day.This move will help improve consumer awareness, eliminate fake goods and ensure high quality standards for products in the country.
DED has put up posters and stand-alone banners and is distributing brochures in English and Arabic at Deira City Centre, Mall of the Emirates and Dubai Festival City in addition to major petrol stations in the emirate. The brochures provide people with advice to prevent exploitation and fraud and to ensure optimal transactions of goods and services.
“In line with the Government of Dubai’s commitment to enhance and upgrade the level of businesses and services, DED co-ordinates with the Ministry of Economy and other concerned local and federal government bodies to spread awareness of consumer rights and to protect the consumers in every possible way to ensure their satisfaction and loyalty,” said Mohamed Hilal Al Muroushedi, director of Compliance Division at DED.
Thomas said: “Consumers should be aware, that’s first and foremost. I would also like to stress the difference between local and private retailers here. They [foreign] retailers want to make money and leave but we have a social cause. The milk lobby tried its best to increase prices last year but we did not let that happen with the help of authorities.”
In response to the objective of creating consumer awareness, Thomas said: “There have been external pressures but we have not increased food prices in the last month. We have not been accepting any increases unless approved by the Ministry of Economy. We are selling basic commodities at cost price or even lower than that. There was so much talk about Tilda rice price going up but we did not do that.
“We make money out of the volumes we sell not on margins. Our trading profits are less than 20 per cent of our total net profit.“We are looking for alternate markets for commodities. For example, we are importing eggs from Australia to make up for the shortfall. In fact, suppliers are trying to get together to import goods from all over the world to keep prices in control,” Thomas added, confirming the role of co-operative societies in the country.
The Union Co-operative Society has been praised by Minister of Economy Sultan bin Saeed Al Mansouri for its steps to counter price rise. He commended the society for helping to stabilise prices, as he honoured its President Majed Hamad Al Shamsi.
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